In 2013, Salman Khurshid, then India’s external affairs minister, asserted, “We remain good friends with the United States of America; we are extremely good friends with Iran.” The dilemma for India – maintaining ties with Iran while wishing to deepen links with the United States and the Gulf Cooperation Council states – has persisted over the past decade. However, the recent announcement of the India-Middle East-Europe Economic Corridor underscores India’s resolve to tilt toward the United States and the GCC, forgoing an approach that saw Iran as India’s primary route into the Middle East and Central Asia.
The corridor project was launched through a memorandum of understanding signed by India, the United States, Saudi Arabia, the United Arab Emirates, the European Union, Germany, France, and Italy on the sidelines of the September G20 summit in New Delhi. It is envisaged as a network of rail, maritime, road, energy, and telecommunication links aimed at forging economic integration and growth by connecting South Asia, the Middle East, and Europe. The India-Middle East-Europe Economic Corridor is being framed as the West’s and India’s counter to China’s Belt and Road Initiative.
India’s Pivot
Greater connectivity with the Middle East, particularly the Gulf region, and projecting influence into the Gulf are key components of India’s efforts to gain global recognition as a great power. The Gulf is strategically important to India as a major trading and security partner; source of energy resources, investments, and remittances; and destination for Indian workers.
During Atal Bihari Vajpayee’s term as prime minister, India’s policy prioritized building ties with Iran. Under Vajpayee, India and Iran signed the Tehran Declaration in 2001 and the New Delhi Declaration in 2003; the latter laid out the prospect of a strategic partnership. The initial deal for India to develop the Chabahar Port was signed in 2003, during Vajpayee’s tenure.
However, Prime Minister Manmohan Singh, with his “Look West” policy, and then Prime Minister Narendra Modi, expanding further into a “Link West” policy, have prioritized strengthening ties with Middle Eastern powers, including Israel, Saudi Arabia, and the UAE. Although “Look West” and “Link West” identify Iran as a priority partner, and India’s official rhetoric has been positive toward both Iran and the Gulf Arab states, U.S. pressure has watered down India’s engagement with Iran, especially after Singh’s government in 2005 announced plans for a nuclear agreement with the United States.
Official statements, speeches, press releases, and parliamentary responses of Indian government officials under Singh and Modi’s leadership reveal India’s pivot away from Iran and toward the GCC. Singh’s government emphasized relations with the Gulf Arab states, even while remaining committed to its agreement with Iran to develop Chabahar Port.
Articulating India’s Iran conundrum in his 2013 speech, Khurshid admitted that “We have had to take positions that obviously not necessarily align themselves with the aspirations or at least perceived aspirations of Iran in recent times.” He was referring to India voting against Iran at the International Atomic Energy Agency. In an interview with Arab News, Khurshid expressed India’s desire to maintain strong ties with Iran, Saudi Arabia, and Israel simultaneously. Analyzing documents during the Singh era, 90% contained statements reflecting a positive attitude toward the Gulf Arab states, while only 29% included positive statements about Iran. Although the statements about Iran were more positive than negative, this demonstrated a radical shift in emphasis from the Vajpayee period, when 100% of the documents analyzed were positive about Iran.
Under Modi, officials have adopted a more balanced rhetoric, highlighting positive ties with both Iran and the Gulf Arab states. However, in practice, U.S. pressure has led the Modi government to distance itself from strategic projects in Iran, focusing instead on enhancing cooperation with the Gulf Arab states. It was expected that India’s engagement with Iran would be bolstered by the administration of President Barack Obama’s signing of the Joint Comprehensive Plan of Action nuclear deal with Iran in 2015. However, the “maximum pressure” sanctions campaign against Iran launched by President Donald J. Trump’s administration soon changed India’s calculus and led to the disintegration of two major joint projects with Iran: the Chabahar-Zahedan rail line and the Farzad-B gas field. Reports suggest that Iran has proceeded with both projects without India’s involvement.
Meanwhile, India’s relations with Saudi Arabia, the UAE, and Israel have flourished, with India establishing strategic partnerships with Saudi Arabia in 2010 and the UAE in 2015. The announcement of the India-Middle East-Europe Economic Corridor suggests that India may be giving up on projects that depend on the Chabahar Port, such as the International North-South Transport Corridor, and instead be deepening its alliance with the Gulf Arab states. Still, some analysts argue that, with Iran and Russia under sweeping international sanctions, connectivity with India remains vital for Tehran and Moscow. Even though Iran has concerns regarding the enhancement of ties between India and Israel, and India’s inclusion in another U.S.-backed regional initiative, the I2U2 partnership with Israel, the UAE, and the United States, ties with New Delhi remain politically and economically valuable to Tehran. The bigger question is the degree to which India still prioritizes these economic relationships with Russia and Iran.
The Transformation of Southwest Asia
The regional security landscape in Southwest Asia is undergoing a significant transformation. The traditional security framework of Southwest Asia had revolved around a security partnership between the Gulf Arab states and Pakistan. During this period from 1967-2008, India was perceived as an outsider with limited influence on regional security.
However, the India-Middle East-Europe Economic Corridor begins to institutionalize the GCC-India partnership. India is increasingly becoming the principal political, economic, and security partner for the Gulf states.
In this recalibrated equation, Gulf states view Pakistan, which is grappling with a deteriorating economic crisis and heavy reliance on financial support from Gulf Arab states, as a strategic liability. Additionally, GCC-Pakistan security cooperation has proved ineffective in countering the security challenges Gulf Arab states face and addressing regional instability.
This shift has implications for great power competition across Southwest Asia. As Pakistan and Iran have been left out of this new project, they may be inclined to strengthen their existing partnerships with China under the BRI.
On the other hand, Saudi Arabia and the UAE maintain strong, deepening ties with China that have reached the level of comprehensive strategic partnerships and remain part of the BRI. By joining the India-Middle East-Europe Economic Corridor project, the two Gulf states are positioning themselves as hubs between India and Europe. This will make Riyadh and Abu Dhabi critical in Western attempts to create an alternative connectivity corridor between Asia and Europe. Additionally, their participation in the corridor could grant them a new form of leverage in their engagement with Western partners and, to some extent, China.
Challenges for the India-Middle East-Europe Economic Corridor
The India-Middle East-Europe Economic Corridor is not without its obstacles and uncertainties. First, the port of Piraeus in Greece, which is the last port on the planned route, is controlled by a Chinese state-owned enterprise, COSCO. India’s Adani Group is reportedly bidding for a logistical facility at the port of Piraeus and looking to gain control of other Greek ports in Kavala, Volos, and Alexandroupoli. If a major Indian corporation close to the Indian government gained some control over Greek ports, it could act as a check against any Chinese attempts to hinder the operationalization of the India-Middle East-Europe Economic Corridor.
Second, the fallout from the Israel-Hamas conflict does not augur well for the viability of the project. Since the conflict broke out, Saudi Arabia has halted U.S.-brokered talks on an agreement to normalize relations with Israel, and Middle Eastern states with diplomatic ties with Israel – including Jordan, which is supposed to be a crucial link between Saudi Arabia and Israel in the corridor – have strongly condemned Israel’s bombardment of Gaza and come under enormous domestic pressure to downgrade engagement with Israel.
Third, Turkish leaders have criticized the new initiative to link Asia and Europe for bypassing Turkey. Moreover, the sea route that will link the ports of Haifa and Piraeus goes through waters claimed by both Turkey and Greece. This could complicate the framework of connectivity between Asia and Europe, dragging the project into the mire of complex regional geopolitics.
The India-Middle East-Europe Economic Corridor is still very much on paper and, like the BRI, might look different altogether when it materializes. Nevertheless, the geopolitical currents the project is propelling are consequential for regional security and connectivity across Southwest Asia and beyond.
