Following confirmation from the United Nations that Tehran had complied with a deal to curb its nuclear ambitions, it was announced that global economic sanctions on Iran were no longer in force. The International Atomic Energy Agency confirmed that Iran had complied with the terms of a deal signed in Vienna last year. The prior sanctions had kept a tight lid on Iran’s potential to sell its vast resources of oil and natural gas. With these sanctions lifted, Iran is expected to increase its export of 1.1 million barrels of oil per day by 500,000 soon, followed by a further 500,000 thereafter. Russian investment firm Renaissance Capital has described Iran as “the last remaining sizeable global economy cut off from international capital to reopen”. On Sunday, Iranian President Hassan Rouhani said that 150 companies from 50 countries had recently visited Iran for investment. For a nation that used to be Iran’s second largest crude oil client after China, before the sanction was imposed, the nuclear deal has given India significant strategic autonomy. Suffice to say, India has vital trade and other important strategic links with both Iran and the West. For starters, Iran has offered its natural gas at a rate that is less than half at which India currently imports natural gas from the international spot market. If the deal goes through India will see a major decline in its Rs 80,000 crore subsidy for nitrogenous fertiliser. Nonetheless, the Indian government has sought a lower price for its gas. On the geo-strategic front, India is geared to invest heavily in the strategic Chabhar port off Iran’s southeastern coast. The port, experts argue, will open up a sea-land access route from India to Afghanistan, bypassing Pakistan. Union Shipping Minister Nitin Gadkari said last year that India is ready to invest more than $15.2 billion to build projects in Iran including taking up full-scale development of Chabahar Port if Tehran offers better terms including cheaper gas.
Strategic experts have also argued that the port will also open India up to the International North-South Transport Corridor—a multi-modal trade transport network that could connect it with Russia, Iran, Europe, and Central Asia. However, it is imperative to remember that these deals are still being negotiated. It would be presumptuous to arrive at any conclusion now. Both India and Iran have an annual bilateral trade of about $14billion. The balance of trade, however, is skewed against India. With the sanctions lifted, India can now resume its oil imports. India reportedly owes Iran $6.5 billion for crude oil purchases, the payment of which has so far been held up due to the sanctions. But Iran has cut India some slack after Tehran announced that there was no “emergency and urgency” in getting back this sum. However, New Delhi does have a cause for concern. There could now be fierce competition for natural resources as Western companies will now rush to Tehran seeking greener pastures. According to recent figures, Iran was India’s second largest supplier of oil but now has slipped to the sixth position. The nuclear deal has opened the floodgates to India. However, with the potential gains, there are certain concerns that the Indian establishment has to work upon before it can make any serious gains. The lifting of sanctions has also given fresh impetus to India’s tourism sector. Until late August, 2015, Iran was on India’s restricted visa list. The nuclear agreement has given India room to lift the visa restriction and give Iranians more flexibility. Reports suggest that approximately 40,000 Iranians visit India annually. This number is now set to increase significantly.