Salman Khurshid with the Iraqi foreign minister, Hoshyar Zebari, in Baghdad

The visit of India’s external affairs minister, Salman Khurshid, to Iraq earlier this week has once again brought into focus India’s changing role in West Asia where it has significant, steadily-rising stakes. Khurshid was touted to discuss the issue of importing oil from Iraq, which has emerged as India’s second largest crude oil supplier, replacing Iran, which is hit by sanctions. India had made known its desire to enhance its energy engagement with Iran as it sought joint exploration and joint investment in infrastructure. Khurshid had made it clear in the past that New Delhi will not let its age-old relations with Tehran suffer just because of the sanctions that have been imposed on Iran. Tehran had reportedly made offers with regard to joint exploration and a production sharing agreement in an oil block which New Delhi has indicated will be of interest. There are also plans to bring together some countries like Iran, Indonesia and India under the rubric of the Non-Aligned Movement to manage the deteriorating situation in Syria. But the biggest splash was created by India’s decision to participate in the upgradation of the strategically crucial Chahbahar port and invest around $100 million in the project in the initial stage.

It is another matter as to why New Delhi could not have taken this decision earlier, especially as it helped in the initial setting up of this port almost a decade back. Whether China’s proactive role in Gwadar now is one of the reasons why India took this decision is a moot point. But Chahbahar was important for India’s Afghanistan and larger Central Asian policy in 2002; it is even more important now as regional realities evolve at a rapid pace.

India’s relationship with West Asia as a region is dramatically different from what it was a generation ago. From 1947-1990, India’s stand towards the region was ideological, as was reflected in its subdued ties with Iran, Saudi Arabia and Israel. Today, however, it is these three States around which India is developing its new West Asian strategy — New Delhi has recently been taking special care to nurture all these relationships and pursue its substantial regional interests. And now, with a democratic Egypt emerging as a new player, India is re-negotiating the terms of its engagement with the region.

India’s policy towards West Asia has often been viewed through the prism of the country’s relations with Iran. The international community, and the West in particular, has been obsessed with New Delhi’s ties with Tehran — which are actually largely underdeveloped — while missing India’s simultaneous, and much more substantive, engagement with the Arab Gulf states and Israel.

A close examination of the India–Iran relationship, however, reveals an underdeveloped relationship despite all the spin attached to it. India would like to increase its presence in the Iranian energy sector because of its rapidly rising energy needs, and is rightfully feeling restless about its own marginalization in Iran. Not only has Pakistan moved ahead with the pipeline deal with Tehran, but China is also starting to make its presence felt. China is now Iran’s largest trading partner and is undertaking massive investments in the country, rapidly occupying the space vacated by Western firms. Where Beijing’s economic engagement with Iran is growing, India’s presence is shrinking, as firms such as Reliance Industries have — partially under Western pressure — withdrawn from Iran and others have shelved their plans to make investments.

Moreover, there is little evidence so far that Iran would be a reliable partner in India’s search for energy security. A number of important projects with Indian businesses and the Indian government have either been rejected by Iran or are yet to be finalized owing to last minute changes in the terms and conditions laid down by Tehran. To date, Iran accounts for only about eight per cent of Indian oil imports; that too is declining under pressure from western sanctions. Moreover, both of the major energy deals, recently signed with great fanfare and having raised concerns in the West, are now in limbo.

India’s position on the Iranian nuclear question is relatively straightforward. Although India believes that Iran has the right to pursue civilian nuclear energy, it has insisted that Iran should clarify the doubts raised by the International Atomic Energy Agency regarding Iran’s compliance with the non-proliferation treaty. India has long maintained that it does not see further nuclear proliferation as being in its best interests. This position has as much to do with India’s desire to project itself as a responsible nuclear State as with the very real danger that further proliferation in its extended neighbourhood could endanger its security. India has continued to affirm its commitment to abide by all sanctions against Iran as mandated since 2006 by the United Nations security council, when the first set of sanctions was imposed. However, much like Beijing and Moscow, New Delhi has argued that such sanctions should not hurt the Iranian populace and has expressed its disapproval of sanctions by individual countries that restrict investments in Iran’s energy sector.

The crucial regional issue on which India and Iran need each other’s support is the evolving security situation in Afghanistan. If Washington were to abandon the goals of establishing a functioning Afghan State and seeing a moderate Pakistan emerge, that would put greater pressure on Indian security. To preserve its interests in case such a strategic milieu evolves, India has reason to coordinate more closely with nations such as Russia and Iran as a contingency. This brings us to Chahbahar where, after a decade of neglect, India will once again be focusing its energies as it becomes clearer every day that after the general elections in 2014, the atmosphere in the region would be quite troublesome for India unless New Delhi takes immediate ameliorative measures. But not much should be expected of a government beset with domestic contradictions so profound that, for the last four years, foreign policy has been left to a risk-averse bureaucracy. This has resulted in India’s stature on the world stage taking a nose-dive; it has also made it difficult for the country to protect its vital national interests.