India may be an eager customer for Iranian oil, but its relations with Gulf Arab states are a greater priority.
Iran-India relations weighted in favour of Gulf Arab states
As tensions rise between the West and Iran, the international community is looking anxiously to the emerging powers of the East - China and India - to provide some answers in restoring the delicate balance of power in the Middle East. China's response has been to steadfastly reject western overtures to impose sanctions on Iran even as Beijing has signed a civilian nuclear energy cooperation pact with Saudi Arabia. This is standard Chinese diplomatic practice in the region, trying to be all things to all parties, even when the parties concerned stand on two starkly opposite sides of the nuclear divide - Saudi Arabia and Iran.
India's response so far has been low key but New Delhi too is readying itself. The Indian oil minister, S Jaipal Reddy, suggested recently that India should be prepared for all eventualities and is planning to replace a part of its Iranian oil supplies with other sources like Saudi Arabia. More recently, however, Mr Reddy indicated that favourable terms offered by Tehran inclined New Delhi "to tap the Iran source fully".
Iran clearly is feeling the effect of several rounds of economic sanctions that have been imposed by the West over the course of the last three years. The Iranian economy is faltering with the nation's currency, the rial, slipping to an all-time low against the dollar after the US placed the Central Bank of Iran under unilateral sanctions. After boasting for years that economic sanctions are not having any effect on Iran, the latest turn of economic events is a blow to the Iranian government's credibility.
The troubles, however, have only just started as the European Union too has imposed a new ban on the imports of Iranian oil. The Arab states in the Gulf have signalled that they would be willing to fill any gap in energy supplies for those states that decide to curtail purchases of Iranian crude.
India shares the belief that Iranian nuclear ambitions would prove destabilising for the Middle East. But it does so from a slightly different perspective—it does not see Iran's nuclear intentions as a response to its rivalry with Israel (as often believed in the West), but as a product of Arab-Iran, and especially Sunni-Shiite, rivalry.
The Iranian nuclear ambitions are viewed in New Delhi as a counter to a two-front encirclement of Shiites by Sunni Pakistan and Sunni Saudi Arabia.
Given these rationales, India has attempted to avert the prospect of a nuclear-armed Iran in its own way. The Riyadh declaration signed in January 2010 during the visit of India's Prime Minister Manmohan Singh to Saudi Arabia asked Iran to "remove regional and international doubts about its nuclear weapons programme".
In fact, India has even endorsed the Arab call for a nuclear-weapons free Middle East - a proposal that used to be directed at Israel but which is increasingly focused on Iran.
India's broader 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 IAEA 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 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 enforce all sanctions against Iran as mandated since 2006 by the UN 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 by third countries in Iran's energy sector.
The strategic reality that confronts New Delhi in the Middle East today is that much like the West, India has far more significant interests to preserve in the Arab Gulf, and as tensions rise between the Sunni Arab regimes and Iran, India's larger stake in the Arab World will continue to inhibit Indian-Iranian ties. At the same time, New Delhi's outreach to Tehran will remain circumscribed by the internal power struggle within Iran, growing tensions between Iran and its Arab neighbours, and Iran's continued defiance of the global nuclear order.
India's engagements with the Arab states in the Middle East have gained momentum in the last few years, even as Iran continued to hog the limelight. India wants to secure energy supplies and consolidate economic and trade relations with the Gulf states, while these states have adopted a "Look East" policy that has allowed them to carve out a much more substantive relationship with India than in the past. Tehran's nuclear drive, its interference in neighbouring Iraq, and President Mahmoud Ahmadinejad's aggressive rhetoric are raising anxieties in Arab states about a resurgent Iran, forcing them to reorient their diplomacy accordingly.
Reaching out to emerging powers such as India is one way to preserve the balance of power in the region. India would certainly like to take advantage of this reorientation but it remains to be seen if the rapidly evolving strategic realities give New Delhi the space to emerge as a critical and credible player in Middle Eastern geopolitics.
Dr Harsh V Pant is a reader in international studies at King's College London