Regardless of the longevity of the Iran deal if New Delhi plays its cards properly it can benefit from the recent Iranian nuclear deal. Islamabad because of its deep involvement in the proxy war between Saudi Arabia and Iran may end up being the loser.
India's ties with Iran range from the sentimental to pure real politik. For the old Nehruvian elite in New Delhi ties with Iran demonstrates New Delhi still retains a degree of independence in its foreign policy. Emphasising close historical and civilisational ties between India and Iran is an attempt to camouflage what is essentially a strategic relationship.
According to the latest Pew Survey by 2050 India will overtake Indonesia to become the country with the largest Muslim population. India's Muslim population has a high Shia percentage making it one of the largest Shia populations globally. Ties with Iran thus have an impact on domestic electoral politics.
As one of the world's top oil importers, India continues to be dependent on supply from Tehran, albeit with a noticeable decrease in its Iranian imports due to American pressures While India's ties with and import of oil and gas from the Gulf countries has grown in the last few decades New Delhi is reluctant to get too close for fear closer ties with Riyadh would lead to Saudi influence and radicalisation of the Indian Muslim population, similar to what has occurred next door in Pakistan.
Iran's primary strategic significance for New Delhi is as an access point to Afghanistan. Pakistan does not allow India transit to Afghanistan and hence New Delhi is dependent on the Iranian port of Chahbahar. India is one of the top regional donors to Afghanistan providing over two billion US dollars, primarily for reconstruction and development, including major infrastructure projects jointly with Iran and designed to rival Sino-Pakistani plans.
As the region prepares for the American military drawdown there are those who assert that the Pakistani establishment will back the Afghan Taliban and its allies to make a push for power. In this scenario there are analysts and strategists who foresee the possibility that Kabul, Tehran and New Delhi may join efforts to stabilise the Kabul government
The current nuclear deal will be welcomed by New Delhi. India always insisted that as a signatory to the Non-Proliferation Treaty, it was incumbent upon Tehran to abide by its obligations. From a strategic viewpoint, India does not want another nuclear-armed power in its neighbourhood and therefore voted in favour of sanctions against Iran However, India was uncomfortable with the US and EU sanctions for economic and strategic reasons.
While India sought to build ties with countries based on both historical but also economic and strategic ties, Pakistan's foreign policy has always had a pan-Islamic blinker. Ties with Muslim countries have been championed as part of an ideological foreign policy. Pakistan has also tried to escape its South Asian or Indian identity by seeking a greater Middle Eastern identity This has led over the years to involvement in conflicts and issues that are not critical to Pakistan and have instead caused blowback to the country.
Iran is Pakistan's western neighbour and around 15 per cent of Pakistan's Muslims are Shias. While Pakistan had close ties with Iran under the Shah's regime, rising sectarianism and the Sunnification of Pakistani Islam over the years has strained ties with Iran.
Further over the years Saudi Arabia has become Pakistan's ideological guarantor of last resort. Saudi Arabia has helped Pakistan purchase military equipment, funded Pakistan's nuclear weapons programme, provided emergency economic aid and employed Pakistani labour. In return Pakistan's military trained Saudi (and Gulf forces) and most analysts agree Saudis consider Pakistan's nuclear weapons
Starting from the 1970s, Pakistan's leaders also allowed their country to become the battleground for a proxy war between Saudi Arabia and Iran From the 1980s anti-Soviet Afghan jihad, to the uprising in Bahrain in 2013, Syria and now Yemen, in each instance Pakistani presence can be traced back to Saudi policy.
Pakistan has also allowed its territory to be used as safe havens not only for anti-Afghan and anti-Indian jihadi groups but also anti-Iranian groups like the Sunni Jundullah that operates in Iranian Balochistan. The two countries almost went to war during the 1990s when the Afghan Taliban killed Iranian diplomats in Mazar-i-Sharif.
In the last few years there have been renewed incidents of flare-ups along the Iran-Pakistan border Tehran has also not looked kindly at Pakistani involvement in Bahrain, Syria or now in Yemen.
Pakistan is strategically located at the cross section of the Middle East, Central and South Asia and could become the centre of trade routes, economic corridors and gas and oil pipelines. Two pipelines which were proposed in recent years - the TAPI or Turkmenistan, Afghanistan, Pakistan and India pipeline and the IPI or the Iran Pakistan India pipeline would have benefitted Pakistan tremendously.
However, for all these pipelines and corridors and trade routes to be profitable the end market would need to be a country like India with a large population and a strong economy. The reason that TAPI has not progressed much has as much to do with security as pricing for the final consumer, India. Further, once India backed out of the IPI pipeline the IP or Iran Pakistan pipeline has not progressed primarily because Pakistan does not have the economic resources to finance the project or the stability and security to attract foreign investment.