Prime Minister Narendra Modi’s visit to Iran following his recent visit to Saudi Arabia and UAE was historic, being part of India’s recalibration to Middle East and West Asia. Prime Minister Modi’s visit came 15 years after the previous prime ministerial visit. Prior to the visit, Carnegie India had identified the $6.5 billion that India owes to Iran for imports being the thorniest issue in Indo-Iran relations, indicating this needed to be addressed on priority if bilateral relations are to proceed on warmer note.

However, in early May, India and Iran reached an arrangement to use European banks to process pending payments by India. Earlier, global banking was not permitted because of the 2011 sanctions imposed on Iran over its nuclear programme. These sanctions have been lifted in January 2016. In fact, just before Prime Minister Modi’s visit information came that India has already made payments in Euros to clear part of the debt. The stand-alone visit by Prime Minister Modi signaled the importance India gives to Iran with ancient civilisation ties and India having largest Shia population outside Iran. It was natural that energy, connectivity and infrastructure would dominate the visit, including providing impetus to Farzad B gas field and the Chabahar project.

The United Progressive Alliance (UPA) Government had largely let the latter remain in limbo despite the United States not objecting to India investing in Chabahar in the period Iran was under sanctions. During his historic visit to Iran, Prime Minister Modi held a close door meeting with President Hassan Rouhani. President Rouhani received Modi at Sa’dabad Cultural Complex where they sat for their first meeting to discuss mutual ties as well as regional and international issues. He also held talks with Iran’s Supreme Leader, Ayatollah Sayyid Ali Hosseini Khamenei, inaugurated the Indian Cultural Festival in Iran and addressed the Indian community in Tehran. India and Iran signed a deal to develop the Chabahar port. Prime Minister Modi said India will open a $500-million line of credit to develop the port into a regional trading hub. Afghan President Ashraf Ghani joined at Tehran for signing of the tripartite trade and transit corridor agreement. “Chabahar can become very big symbol of cooperation between Iran and India,” Iran President Rouhani said. Based in the Gulf of Oman, Chabahar will allow India to bypass Pakistan to transport goods to Afghanistan and Central Asia using a sea-land route.

Significantly, Defence Minister Manohar Parrikar concurrently visits Oman, signed four key agreements on defence cooperation, marine crime prevention, maritime issues and flight safety information exchange. Besides developing the Chabahar port in Iran, India will also help build a 500-km railway line between Chabahar and Zahedan on the Afghan border.

Earlier, Petroleum and Natural Gas Minister Dharmendra Pradhan had conveyed to the Iranian side that Indian companies could invest up to $20 billion and were interested in setting up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through joint venture between Indian and Iranian public sector companies or with private sector partners. In this regard, he had requested Iran to allocate appropriate and adequate land in the SEZ, expressing India’s interest in setting up a LNG plant and a gas cracker in the Chabahar port.

India and Iran inked 12 pacts: India-Iran Cultural Exchange Programme; Policy dialogue between governments and interaction between think tanks; Enhancing cooperation for training of diplomats and exchange of eminent speakers; Cooperation in the fields of science and technology; Institutional mechanisms for cooperation to promote cultural exchange; Bilateral contract on Chabahar port for port development and operations; MoU on current specific terms for Chabahar port project; Confirmation statement for extending credit of Rs. 3,000 crore for the import of steel rails and implementation of Chabahar port; Framework of cooperation supporting and encouraging foreign trade and foreign investment; MoU facilitating possibility of joint exploration manufacturing aluminium metal; MoU to provide requisite services for the construction of Chabahar-Zahedan railway line, and; MoU for cooperation facilitating exchange of information and knowledge in the field of archival matters.

Prime Minister Modi termed the Chahabar agreement an “important milestone”, adding that the two nations will “consult closely and regularly on combating threats of terrorism, radicalism, drug trafficking and cyber crime”. Definitely, the Chahabar Port and Transport and Transit Corridor Agreement are the principal takeaway of Prime Minister Modi’s visit. But as significant is India-Iran plus Afghanistan periodic consultation on terrorism emanating from Pakistan and expanding influence of the ISIS. Terming terrorism as a “big problem” Iranian President Rouhani said, “The two countries (India-Iran) discussed about political issues as well as how they can cooperate on intelligence sharing and how they can get closer to each other in the fight against terrorism and extremism and how they can contribute to peace and stability in the whole region.”

Consultations and joint approach to terrorism become even more significant with Pakistani genocide in Baluchistan and ISI having brought the Afghan Taliban and Pakistan Taliban under a common platform by superimposing the Haqqani network leaders on the Afghan Taliban. On balance, the payoffs of Prime Minister Modi’s historic visit to Iran have been stupendous, which need to be followed up speedily.

The views expressed herein are the personal views of the author.