John C. K. Daly
Executive Summary:
- Iran has granted Armenia access to its Chabahar and Bandar Abbas ports to facilitate Yerevan’s trade access to India.
- The proposed east-west transit route will serve as a supplemental component of the International North-South Transport Corridor in facilitating greater regional trade.
- Armenia has increasingly turned to India for defense cooperation and arms purchases in the wake of Yerevan’s falling out with Moscow.
On January 3, Mehdi Sobhani, the Iranian ambassador to Armenia, announced that Armenian ships could freely use Iran’s Chabahar and Bandar Abbas ports (Arminfo, January 3). Yerevan has been moving toward signing formal economic agreements with Tehran to use Iranian seaports for its arms trade with India. This development is a further sign of Armenia’s estrangement from former protector Russia following military clashes with Azerbaijan last year (see EDM,February 9, September 20, 2023. Both New Delhi and Tehran strongly support Armenian aspirations to assist in the development and use of Iran’s ports. Compensating for Yerevan’s downgrade of defense and armaments agreements with Moscow, Iranian Foreign Minister Hossein Amir-Abdollahian said: “We view the security of Armenia as the security of Iran” (Caucasus Watch, February 22, 2023). The growth of trilateral cooperation among Armenia, India, and Iran looks to improve regional transit infrastructure and elevate each country’s influence in the South Caucasus (see EDM, June 21, 2023).
Armenian-Indian rapprochement dates back to Indian External Affairs Minister Subrahmanyam Jaishankar’s trip to Armenia in October 2021. That marked the first visit of an Indian foreign minister to Yerevan in the three decades since the Soviet Union’s collapse (Firstpost, January 5). Jaishankar’s visit built upon an earlier meeting held on September 26, 2019, between Indian Prime Minister Narendra Modi and Armenian Prime Minister Nikol Pashinyan on the sidelines of the 74th UN General Assembly in New York. There, Modi requested Armenia’s assistance in finalizing a trade arrangement with the Russian-dominated Eurasian Economic Union (EAEU), of which Armenia is a member (Asia News International, September 26, 2019).
Armenia’s interests in expanding cooperation with Iran and India are twofold. Yerevan seeks to strengthen its military by importing high-grade sophisticated armaments and to stimulate its access to global markets by expanding its trade options beyond the Russian-dominated EAEU and post-Soviet space. Armenia began to search for new security partners after Russia, dominating the Collective Security Treaty Organization, refused to assist Armenia in fighting Azerbaijan during the Second Karabakh War (September 27–November 10, 2020) and subsequent border clashes. As a result, Yerevan and New Delhi began to discuss prospects for bilateral defense cooperation. Since then, India has proven to be a useful partner, as Armenia signed a contract in 2022 to import Pinaka multi-barrel rocket launchers, anti-tank missiles, and other munitions. The supplies were ferried via Iran, provoking protests from Azerbaijan (The Times of India, October 26, 2023). In 2023, Pashinyan and Armenian Security Council Secretary Armen Grigoryan openly discussed Russia’s failure to Armenia with supply arms. The weapons and munitions are worth hundreds of millions of Armenia drams and have already been paid for, with no indication of Moscow planning to refund the money (JAMnews, December 29, 2023).
Landlocked Armenia is also engaged in discussions to join in developing Iran’s Chabahar port. Chabahar is situated on Iran’s Makran coast in the southeastern Sistan-Baluchistan province bordering Pakistan. The port itself lies next to the Gulf of Oman at the mouth of the Strait of Hormuz and gives Iran direct access to the Indian Ocean. Armenian Deputy Foreign Minister Mnatsakan Safaryan recently noted that Chabahar is an integral component in Armenia’s quest for enhanced access to India and Central Asia via connectivity with the International North-South Transport Corridor (INSTC). Armenia’s link to Chabahar and the long-dormant INSTC, originally proposed by India, Iran, and Russia in 2000, can be completed by the end of 2024 ( Logistics Insider, November 9, 2023).
The proposed east-west trade route to connect Armenia, Iran, and India is meant to be a supplemental component of the INSTC. The original purpose of the INSTC was to reduce the cost of trade between India and Russia by about 30 percent and cut transit time by more than half (see EDM, July 13, 2022). Geopolitical disagreements and funding shortages have delayed the corridor’s development.
The Armenian economy would certainly benefit from a boost in its international trade. According to the Statistical Committee of the Republic of Armenia, in 2021, the national poverty rate was 26.5 percent (Statistical Committee of the Republic of Armenia, November 30, 2022). Even worse, poverty in rural areas has reached a sobering 33–49.1 percent (Hetq.am, November 30, 2022). As of January 1, Armenia took over the rotating EAEU chairmanship from Russia for 2024. Yerevan projects that Armenia could serve as a transit conduit for Iran to the EAEU and European countries further afield. Iran, in turn, would assist Armenia in gaining access to the Persian Gulf, Central Asia, and India.
Moscow has voiced concerns about Armenia’s search for alternative security partners. For example, at the end of last year, Russian Foreign Minister Sergei Lavrov addressed the Kremlin’s concerns about Armenia’s drift toward the North Atlantic Treaty Organization. He remarked: “I hope that Yerevan is aware that the deepening of cooperation with the alliance will lead to the loss of sovereignty in the field of national defense and security” (TASS, December 28, 2023). Russian concerns about Armenia drifting away from its weapons exports will not abate anytime soon. Recently, sources within the Indian Ministry of External Affairs, speaking on condition of anonymity, stated that Armenia is interested in signing more defense contracts with New Delhi for Indian-made drones and counter-drone systems, munitions, and mid-range surface-to-air missiles (Firstpost, January 5).
Armenia’s hopes for gaining trade access to India via Iran’s ports may be premature. On January 16, Iran’s Islamic Revolutionary Guards Corps in Sistan-Baluchistan fired drones and missiles against Baloch Sunni Muslim militant group Jaysh al-Adl in Pakistan’s Baluchistan province (The Tehran Times, January 16). The day before, Iran had carried out similar strikes inside Iraq and Syria against “spy headquarters” and “terrorist” bases. On January 18, Pakistan retaliated with missile and drone strikes against “terrorist hideouts” in Iran (The News International, January 18).
Yerevan’s estrangement from Russia is a significant loss for Moscow’s position in the South Caucasus. Still, Armenia’s integration into global north-south and east-west trade patterns brings with it several challenges and opportunities. Pakistan’s strikes on Iran were the first external land attack on the Islamic Republic since Saddam Hussein’s forces invaded in September 1980, igniting eight years of conflict. Expanding security cooperation with more reliable partners than Russia is one thing. Succeeding in the increasingly turbulent Eurasian economic environment is quite another.
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