The revelation in the New York Times this past week that China and Iran are on the brink of signing a major economic and security partner...
The revelation in the New York Times this past week that China and Iran are on the brink of signing a major economic and security partnership is a transformative moment that presents a serious challenge to Indian foreign policy. The immediate impact has already been the end of the road for the important Chahbahar rail project, which was aimed to open up Indian connectivity to Afghanistan. But the implications for India are much greater than one commercial deal gone sour.
Sino-Iranian relations
The economic component of the Sino-Iranian partnership plan, reported in international energy media last year, involves Chinese investments in Iran of $400 billion over 25 years, with $280 billion going to the oil and gas sector and the remaining $120 billion to other core sectors of the Iranian economy.
In return, China will get long-term energy contracts at 30%, plus discounts and first refusal rights on all major energy projects in Iran. These are audacious terms by any standard.
Sino-Iranian relations have been growing closer for years. Iran has already emerged as a key node in China’s transcontinental Belt and Road Initiative that seeks to create a web of connectivity across Europe, Asia, and Africa. With projects linked to the China-Pakistan Economic Corridor saddled with viability concerns, Iran has been attractive as an alternative...
