Last month, a fairly convincing argument could be made that India was trying to fundamentally reorient its foreign policy in the Middle East.
The regional infrastructure initiative New Delhi had promoted along with its partners in Moscow and Tehran for two decades, the International North-South Transportation Corridor (INSTC), appears to have been jeopardized by the recent war in Nagorno-Karabakh. The defeat of Armenia, a key partner in the project, seemingly has threatened the territorial integrity of Syunik, a southern province and a key area for the INSTC. The potential for wider conflict in the region, in particular between Turkey and Azerbaijan, on the one hand, and Iran, on the other, did not seem outside the realm of possibilities.
To that end, India’s relative silence on the issue, along with its negotiation of a the new India-Middle East-Europe Economic Corridor (IMEC) at the G-20 summit, all seemed to point toward India’s movement away from Iran and the Caucasus and toward the Arab world as a means of expanding its economic influence and countering China.
Yet, what a difference a month can truly make.
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The harrowing events in Gaza have fundamentally altered the regional dynamics. At the core of this reordering is the relationship between Saudi Arabia and Israel. Touted as a means to normalize relations between the two countries, IMEC’s success was entirely contingent on both countries cooperating on regional development, at the very least. Yet Saudi Arabia’s engagement with Iran since the crisis and its silence on Hamas at the very least indicate there is no rush in Riyadh to restart normalization talks.
At the best, for India, this means that the forward momentum of the program will be stalled for the foreseeable future. With much of the project’s key infrastructure exposed to the fighting, however, the worst case scenario for New Delhi’s new project, where physical instability threatens future progress, seems all too likely.
It does not appear that India has taken any concrete steps to prevent either outcome, either. New Delhi is not necessarily neutral in the conflict; its vocal condemnation of Hamas signifies the culmination of a long-term diplomatic shift in India’s stance on the Israel-Palestine conflict. Motivated by its strong defense and economic ties with Tel Aviv, India sees little reason to cultivate its status as an impartial arbitrator in the conflict. In the trade off between a vague infrastructure initiative and the tangible benefits New Delhi already receives from Israel, the latter has clearly won out.
However, Israel should not take for granted India’s alignment on all issues, especially regarding Iran. Fundamentally, India does not view its relationship with Israel and Iran as linked in any manner; both are means to achieve some semblance of regional order, and talking to one does not preclude talking to the other. This question about the purpose of India’s relationship with the Arab world and Israel has been an ongoing tension in India’s alliances in the region; the predecessor to IMEC, the I2U2 grouping of India, Israel, the UAE, and the United States, was often seen by Israel as an alliance motivated by “fear of Iran,” despite the fact that India was deepening its cooperation with Iran at the same time. India, in other words, does not need to pick a side, and has engaged with both Iran and Israel as it has suited them.
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Paradoxically, India’s stand with Israel may, in fact, drive it closer to Iran. With the coalition making up IMEC now split over the Gaza conflict, Iran is positioned to capitalize on its relationship with New Delhi. So long as the conflict does not escalate, and India does not see Iran as having a pivotal role in supporting Hamas, then India’s only other infrastructure alternative is the INSTC. To that end, Iran’s envoy to India has emphasized to New Delhi that it did not support Hamas in the lead-up to October 7. Tehran wants to avoid, as much as possible, being viewed as culpable by India. In doing this, Tehran increases the likelihood that India will not scrap or otherwise delay its INSTC investments in Iran over the Gaza conflict. That is to say, by supporting Israel, India has weakened the cohesion of the IMEC coalition over important regional issues and has strengthened Iran’s leverage over New Delhi significantly. All of this points toward India recommitting itself to the INSTC.
There are certainly indications that this is the direction that India is taking. For one, India’s National Security Advisor, Ajit Doval, recently announced that the five Central Asian nations would be added to the transportation corridor, reflecting India’s continuing interest in the project as a means to counter China’s own transportation ambitions in the region. India’s relationship with Russia provides another clue about India’s hope for the INSTC. As the endpoint of the corridor, Russia’s continued support and stability are critical for the INSTC’s future success. At a time when vocal, public support for Iran might be met with scorn internationally (and moreover when the international community is distracted from the Ukrainian War), Russia remains the only other major member of the INSTC with whom India can engage. The recent announcement of a planned meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin, while not necessarily groundbreaking, adds credibility to the notion that India is trying to keep alive its relationship with the other INSTC stakeholders.
Certainly, there’s space for the continuation of the project. Armenia, now seemingly moving toward a peace deal with Azerbaijan, has repeatedly emphasized India’s important role in the INSTC in the wake of its defeat in Nagorno-Karabakh. The continuing entente between Azerbaijan and Iran, briefly interrupted by last month’s war, seems to be progressing apace, with the two agreeing to build a transportation corridor that would link Azerbaijan to its exclave Nakhchivan via Iranian territory. Should this attempt at rapprochement fail, Tehran’s recently announced investments into infrastructure linkages with Syunik will certainly do much to strengthen the deterrent effect of Iran’s promises to defend Southern Armenia. That is to say, Iran’s role in the mediation of the South Caucasus conflict has the potential to benefit India’s interests in the region: both infrastructure projects will extend the reach of the INSTC in the region, a particular bane for India recently. All else being equal, the prospects for India’s INSTC strategy compared to IMEC seems much better than it did a month ago.
If the last month has demonstrated anything, however, it is that fortune tends to be fickle. For as much as the developments of the previous month seem to favor India’s shift toward the INSTC, the conditions which brought about that shift could be seriously jeopardized. For one, should Saudi Arabia continue down the road toward some form of Israeli normalization, or at the very least economic integration with Israel, then the INSTC no longer becomes the only game in town.
Officials in New Delhi seem miffed at the slow pace of the project and incompetence on Iran’s part; if the INSTC is no longer their only option, they may divert resources elsewhere. There is also Azerbaijan to consider; the Azeris, with their long-standing ties to Israel, have notably pro-Israeli sentiments, especially after the recent conflict in Gaza. Should the war escalate, in particular to include Iran, then it is very likely that the detente between Azerbaijan and Iran will not hold.
There are already hints that the conflict is creating tension between the two. In light of Iran’s recent call for an oil embargo against Israel, it was Azerbaijan, a major Israeli oil supplier, which voiced some of the stiffest opposition to the Iranian measure. Although the current context favors a cessation of tensions, the rather tumultuous year in bilateral relations between the two would suggest that tempers are sufficient for the relationship to change quickly, and potentially violently. After all, the conflict in the South Caucasus is also not entirely resolved. The recent military exercises of Turkey and Azerbaijan near Armenia would suggest as much. If Iran cannot forge a lasting settlement to the tensions in the Caucasus, the security of INSTC infrastructure in the region will always be in doubt.
Despite the changes in India’s Middle East infrastructure strategy over the last several months, India still faces the same fundamental challenges it did at the start of this year. If New Delhi cannot insulate itself from the ongoing Israeli-Iranian tensions, then no amount of hedging, or talking to both sides, or switching between strategic initiatives will bring its ambitions to fruition. Its involvement with both, in fact, exposes its investments to the risk of armed conflict.
This is not to say that India cannot talk to Iran or Israel, or that it must remain strictly neutral in a conflict between them. This is a value judgment New Delhi must make for itself. Rather, all of this is to point out that India’s regional initiatives must take great pains to avoid being reliant on tranquility between Israel and Iran. Otherwise, the chaos and stagnation that has characterized India’s infrastructure initiatives in the region thus far will become increasingly common.