March 2003 / No. 22

Landmark

Given pride of place as India’s guest of honor on its 54^th Republic Day celebrations, Iranian President, Seyyed Mohammad Khatami, watched his Indian counterpart, A.P.J. Abdul Kalam, unfurl India’s national flag as the national anthem played to a 21-gun salute. Four military helicopters soar overhead, showering the countless participants with rose petals, carpeting the eight kilometer parade path from the Rashtrapati Bhavan (Presidential Residence) through the picturesque Rajpath road down to Amar Jawan Jyoti (India Gate) before winding up at the historic Red Fort. The parade showcases India’s military might as the Indian President is saluted by the mechanized, mounted and marching contingents of the armed forces. The march is followed by a cultural extravaganza, consisting of a tableau of floats predominated by the cultural motifs of India’s various states and regions. Finally the audience is treated to a spectacular fly-past by Air Force and Naval aircraft, after which numerous balloons are released to mark the parade’s end. These balloons, however, are not the only things grazing India’s sky. They must share the airspace with the two helicopter gunships rattling over Rajpath. Even though security is heightened for this occasion, the threat is always there; a fact Indian Prime Minister Atal Behari Vajpayee, who enjoyed the parade –like many other VIPs– shielded by a bullet-proof screen, knows all too well.

"President Khatami declared that construction of a gas pipe line extending from Iran to India could commence as soon as the final decision is taken."

This year’s VIPs were Iranian President Khatami and his entourage of ministers and other high-ranking officials. Khatami took part in the celebrations at the official invitation of his Indian counterpart as part of his four-day (24 – 27 January 2003) visit to the subcontinent. Republic Day is of great significance as India’s many regional identities give way to a single national identity where neither caste nor creed nor religion matter. Everything is predominated by the ‘Indian-ness’ of the people. The spectacular event is widely telecast, not only in India, but also throughout the world. Republic Day is without speeches and is a ceremony in which rhetoric is in the background and visuals are given priority. It is the first time an Iranian head of government has been invited to such a ceremony, which is the greatest honor India can bestow upon a friendly nation, and thus puts the relations of India and Iran on dais.

"Iran and India called for "pluralism, diversity and tolerance" and applauded "Dialogue among Civilizations" as an appropriate means of "addressing discord and differences in international relations."

Despite their age-long relations, President Khatami’s visit lays the first brick of the framework for the strategic structure that is being evolved into a tentative Iran-India entente. His visit sought to sure up support for his ‘gas strategy’ from a cautious India, increasingly skeptical of the security of a gas pipe proposed to pass through Pakistan. Also on agenda was the prospect of the joint development of new road and rail routes, creating the ‘North-South Corridor’, a trade route that would link India to Europe and Central Asia via the Iranian port of Chabahar. The visit’s key achievement was the signing of eight agreements, most significant of which were the New Delhi Declaration, its additional Roadmap to Strategic Cooperation –which sets a timeframe for the declaration’s implementation– and a memorandum of understanding (MoU) on energy.

Gas Strategy: Khatami declared that construction of a gas pipeline extending from Iran to India could commence as soon as the final decision is taken. However, Indian Ambassador to Tehran, Pripuran Singh Haer stated that India’s main concern is the gas supply’s viability and long-term security. The options currently under consideration are the ‘deep sea option’ and Iran’s economically viable –yet politically challenging– ‘overland through Pakistan option’. This dilemma is truly testing Khatami’s political mettle and he has been careful to balance his visit to India with another, just a month ago, to Pakistan and moderate his rhetoric on the contentious India-Pakistan confrontation over Kashmir. He has since repeatedly emphasized that the deepening of relations with India, is "not aimed at any third country". Flying over Pakistani airspace en route from Tehran to New Delhi, Khatami sent a message to his Pakistani counterpart President Pervez Musharraf extending to him and the brotherly, neighboring Pakistani nation his warmest, most sincere greetings and expressing hope that the two countries’ relations, which is rooted in their shared cultural, religious and historical backgrounds, would improve more than ever before. But with no avail, as the prospects for an overland pipeline have further receded amid rising concerns about security, notwithstanding Musharraf’s assurance that Pakistan will protect the pipeline through its territory. Musharraf’s competence, if not his intentions, on this count are in question after the main gas pipeline to the Punjab and the North West Frontier Province from Sui has been attacked and disrupted twice in January 2003 itself.

"India's EXIM Bank is extending a $200 million credit line to seven Iranian banks."

Khatami, in the presence of his Indian counterpart, Abdul Kalam, took the opportunity to emphasize, "Tehran and New Delhi think about peace and progress…the relations between India and Iran as two important countries in the region can be very much effective for the peace and security of the region and world." On the present situation of the world he expressed hope that the Iraq crisis would be solved without recourse to war and through the United Nations. Abdul Kalam said, "It is very good that we are working together for peace and stability" and added that "India and Iran have had relations for a millennium and their friendship is historical."

MoU on Energy: This MoU seeks to set up a framework for cooperation in the hydrocarbon sector, including oil, petrochemicals and their derivatives, liquefied natural gas (LNG), condensate natural gas (CNG), consultancy services, exploration, development, production, processing, refining, marketing and transportation. India is to encourage and support its private sector to participate in Iran’s projects as well as purchasing Iran’s LNG. A joint working group has been established to implement this MoU and India’s Minister of Oil and Gas will be visiting Iran in the coming months to oversee its progress. In the media conference following the signing ceremony, Prime Minister Vajpayee said the two countries were broadening their cooperation "beyond the mere buyer-seller relationship" and added that Iran’s recent award of the Parsi Oil exploration block to an Indian consortium "marks a good start."

North-South Corridor: In the same conference, President Khatami extended an invitation to Vajpayee –which he accepted "with pleasure"– to revisit Iran and further welcomed India’s presence in all economic, scientific and cultural fields. When queried by the Indian media on Chabahar and the North-South Corridor, Khatami explained that the highly viable trade route known as the North-South Corridor, in which India, Iran and Russia play pivotal roles, is quite significant in promoting peace and security as well as trade and economic development in the region. The corridor, not only reduces vital transport time and costs, but also reduces bureaucratic hurdles along the way. Khatami continued to say India has very good programs to implement in Chabahar and we hope to finalize our agreement in linking India to Chabahar and through it to the National Iranian Rail Road, thus connecting India with Europe and Central Asia.

"In a joint business session, Khatami stated that Tehran’s foreign policy was focused on broadening cooperation with Asian countries, among which "India occupies a distinguished place."

The New Delhi Declaration: Talks between high-level Indian and Iranian delegations resulted in the signature of eight agreements on cooperation in political, economic and scientific areas, most important of which was the New Delhi Declaration, which is a "vision of a strategic partnership for a more stable, secure and prosperous region and for enhanced regional and global cooperation."

MoU on Roadmap to Strategic Cooperation: Following the vision for a strategic partnership embodied in the New Delhi Declaration, this MoU, signed by each country’s foreign minister, sets a five-year target oriented timeframe for its implementation. The two sides have agreed to utilize existing frameworks and mechanisms where they exist and to create additional ones where necessary, to achieve set targets of the bilateral cooperation in a timely manner. Political dialogue and cooperation on issues of strategic significance will be conducted through the Strategic Dialogue Mechanism, Foreign Office Consultations and the institutional interactions between the National Security Councils of the two countries. Among significant areas of bilateral cooperation, in the field of hydrocarbons, the two sides have formulated a joint mechanism to promote broad-based cooperation, which includes both upstream and downstream industries. The matters relating to transfer of Iranian gas to India will continue to be discussed under its existing joint committee. India and Iran also agreed to explore opportunities for cooperation in defense, which –they stress– is not aimed at any third country. The sides have made concerted efforts to encourage bilateral trade and economic cooperation. This involves boosting non-oil trade and investment in infrastructure projects including the development of the Chabahar port complex, Chabahar-Fahraj-Bam railway link and Marine Oil Tanking Terminal –which are under discussion– as well as Iran’s interest in investing in India’s infrastructure projects.

Agreement on Science and Technology: This agreement identifies diverse fields of cooperation including IT, biotechnology, food technology and pharmaceutical research, with both sides organizing training and research programs, exchange of scientists and scholars and holding seminars and workshops. It is expected that the agreement will strengthen collaboration between the scientific institutions and scholars of the two countries. The agreement is valid for five years and can be automatically extended for similar periods.

MoU on Vocational Training: This MoU was finalized after discussions with India’s Labor Minister on his visit to Iran, 8-12 January 2003. The MoU stipulates cooperation in workforce training and skill enhancement and the exchange of experiences in these fields.

Cultural Exchange Program 2003-2005: This program encompasses the fields of art, culture, radio, television, cinema, press, and sports. The aim is to strengthen friendship and cultural bonds by promoting exchanges between leading cultural institutions, libraries, the media and sporting organizations. Examples of such exchanges are the participation of sporting teams in each other’s tournaments, translation of literary works in each other’s languages, and the participation of children and teenagers in joint artistic endeavors.

MoU on Urban Water Management and Hydrological Studies: This MoU is directed at Tehran’s Regional Centre on Urban Water Management (RCUWM) established by UNESCO. The sides have agreed to exchange experience and organize training and seminars in urban water management and hydrological studies, guided by UNESCO’s Sixth International Hydrological Program. A joint committee will be established to hold regular meetings to ensure the implementation of this program.

Granting Iran a $200m credit line: This credit line is granted to strengthen trade and economic cooperation, encourage India’s exports to Iran and boost its participation in Iran’s projects. Export Import Bank of India (EXIM) is extending the credit line and has entered into a framework agreement with seven Iranian banks. Under the agreement’s terms and conditions, EXIM will finance up to 85% of the purchase of any capital goods until the credit line is exhausted.

Joint Business Session: In a joint business session, Khatami stated that Tehran’s foreign policy was focused on broadening cooperation with Asian countries, among which "India occupies a distinguished place." Iran has the potential to become a flourishing market for India’s IT goods and Indian companies can benefit by investing in Iran’s hydrocarbon sector. Khatami believes the countries’ potential for economic ties is much higher than the current volume of trade, which has risen from $120 million in 1991 to $500 million in 2002. Ambassador Haer attributed this relatively weak exchange to "lack of awareness, poor communication and a lack of appreciation of the total capacity and capabilities of the other side" and continued to explain that there has been a preference in our business communities to look at certain parts of the world for exports and imports. When India liberalized its economy in 1991 its entire economic landscape dramatically changed. Huge investments made in India during the last 10 years have brought tremendous growth and have made India’s industry very competitive. "Iran can appreciate the fact that we will soon be a member of WTO." Haer believes a way in which awareness can be boosted is through "exchange of information and delegations and participation in exhibitions" and proposed the holding of an "exclusive Indian exhibition later this year to showcase India’s progress and show its Iranian friends what to expect from its world-class products."

The Iranian President was conferred an honorary doctorate degree by the Delhi University in appreciation of "his services as a political thinker for working to expand and deepen religious democracy and inviting people of the world to peace, tranquility and coexistence." However, whether this invitation is accepted by India and Pakistan remains to be seen; so does the true extent of Khatami’s expertise as a political thinker, which would be proven beyond a doubt if he can implement his gas strategy.