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India, Iran sign nine MoUs to strengthen bilateral relations

India, Iran sign nine MoUs to strengthen bilateral relations

India and Iran signed nine agreements in order to further the bilateral cooperation between the two sides during the visit of Iran’s President Rouhani to Delhi. The agreements and MoUs were signed following the talks between Indian Prime Minister Narendra Modi and Iranian President.

The documents that were signed include:

  • Agreement for the avoidance of double taxation and prevention of Fiscal Evasion with respect to taxes on Income,
  • Exemption from Visa requirement for holders of Diplomatic Passports,
  • Lease Contract for Shahid Beheshti Port- Phase 1 of Chabahar for 18 months,
  • MoU on Cooperation in the field of Traditional Systems of Medicine
  • MoU on the establishment of an Expert Group on Trade Remedy Measures to promote cooperation in areas of mutual interest
  • MoU on Cooperation in the field of Agriculture and Allied Sectors
  • MoU on Cooperation in the field of Health and Medicine
  • MoU on Postal Cooperation

Analysis:

Iran’s President Hassan Rouhani has this week been repaying the trip Prime Minister Narendra Modi took to Tehran in 2016 with a visit to India. Rouhani’s arrival in New Delhi represented a continuation of India’s robust outreach to West Asia, and interestingly comes on the heels of the Modi government’s much-celebrated engagement with one of Iran’s biggest enemies in the region, Israel.

Independent India and Iran established diplomatic relations on 15 March 1950. During much of the Cold War period, relations between India and Iran suffered due to different political interests—non-aligned India fostered strong military links with the Soviet Union while Iran enjoyed close ties with the United States. Following the 1979 revolution, relations between Iran and India strengthened momentarily.

However, Iran's continued support for Pakistan and India's close relations with Iraq during the Iran–Iraq War impeded further development of Indo–Iranian ties. In the 1990s, India and Iran supported the Northern Alliance in Afghanistan against the Taliban regime. They continue to collaborate in supporting the broad-based anti-Taliban government led by Ashraf Ghani and backed by the United States. The two countries signed a defence cooperation agreement in December 2002.

Even though the two countries share some common strategic interests, India and Iran differ significantly on key foreign policy issues. India has expressed strong opposition against Iran's nuclear programme and whilst both nations continue to oppose the Taliban, India supports the presence of NATO forces in Afghanistan unlike Iran.

Iran is the second largest supplier of crude oil to India, supplying more than 425,000 barrels of oil per day, and consequently India is one of the largest foreign investors in Iran's oil and gas industry.

A highway between Zaranj and Delaram (Zaranj-Delaram Highway) is being built with financial support from India. The Chabahar port has also been jointly financed by Iran and India. India plans to invest 20 billion US dollars towards development of Chabahar port. India is helping develop the Chabahar Port, which will give it access to the oil and gas resources in Iran and the Central Asian states. By so doing, India hopes to compete with the Chinese, who are building Gwadar Port, in Pakistani Baluchistan. Iran plans to use Chabahar for trans-shipment to Afghanistan and Central Asia, while keeping the port of Bandar Abbas as a major hub mainly for trade with Russia and Europe. India, Iran and Afghanistan have signed an agreement to give Indian goods, heading for Central Asia and Afghanistan, preferential treatment and tariff reductions at Chabahar.

It is interesting to note that Iranian people see India with a positive view. According to a BBC World Service Poll conducted at the end of 2005, 71% of Iranians viewed India's influence positively, with 21% viewing it negatively, the most favorable rating of India for any country in the world. However, Iranian continued support to Pakistan sometimes strains the good relation with India.

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