The Indian economy is struggling and it sort of has become a mystery for the government to find the right spell to cure the delicate situation. The airstrike conducted by the USA killing Irani General Qasem Suleimani sparked a social media outrage where even hashtag World War III trended for a brief period.
Indian stock markets saw the biggest selloff in recent months as US-Iran tensions knocked down global equities. The Sensex fell 788 points to settle at 40,676 points, wiping out INR 3 lakh crore in market value.
Crude oil prices have crossed $70 to give a general scene about how it affected the global economy in general. The escalating tension in the Middle East does not reflect good signs for already battering Indian economy.
Developing foreign relations is strategic and time-consuming task and India clearly has business and strategic interest in the Middle East.
India is hosting Iranian Foreign Minister Javad Zarif in the coming week where safeguarding its interests will be at the top of its agenda.
Chabahar port, energy contract, its expats, and financial terms would remain at the top. Merely a month back, the situation was comfortable for India as the US had handed over a written assurance to India to keep the Chahbahar port out of the sanction list.
The port has the potential to act as a gateway between the Indian subcontinent, Iran, Afghanistan, Central Asia, and Europe.
A whopping $200 Billion Indian investment is at the stake in the Middle East region in infrastructure and trade. The USA had announced waivers in November 2018 for Chabahar port but the documents were handed over in 2019.
In the absence of the written assurance, global banks were reluctant to provide finance for the purchase of machinery worth $85 Million.
Sakhi Ahmad Paiman, Deputy Head of the Chamber of Industry and Mines in Afghanistan, recently told Kabul-based news channel Tolo News that many businessmen were awaiting payment for a talc shipment — comprised of 50 containers — which was exported to India eight months ago.
He said Afghan investors have not sent any shipment to Chabahar since then.
Now the fresh tensions between Iran and the US might further dent the business confidence of traders. India and Iran had signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti — Chabahar Port Phase-I — by investing $85.21 Million. It was decided that both countries will share revenues.
India’s energy security is also directly linked to the Gulf. While it has cut down the import of Iranian crude to a large extent over the past few years, Chabahar port remains a cornerstone of India’s connectivity aspirations to play an active role in Afghanistan and Central Asia.