One of the themes of the recently concluded fourteenth SAARC Summit was 'connectivity' and the unanimous decision to bestow Iran an observer status in SAARC to enhance South Asia's links with Iran. Iran has multiple linkages particularly with Afghanistan, Pakistan and India which date back to history. Therefore Iran's formal association with SAARC will help in institutionalizing such ties.

Deeper involvement of Iran in South Asia will have implications on its bilateral relations with the South Asian neighbours including India on one hand and on the regional economic and security scenario on the other. India has supported Iran's observer status in SAARC hailing it as a friendly country thereby signifying that a one-off vote against Iran on the nuclear issue in International Atomic Energy Agency (IAEA) should not hamper the vision of a strategic partnership of January 2003 between India and Iran.

A unanimous endorsement of its observer status by South Asian nations comes as a diplomatic victory for Iran in the face of Washington's efforts to isolate Iran over its pursuit of nuclear weapons capability. Iran's endorsement as a SAARC observer also coincided with the diplomatic row over its detention of fifteen British military personnel. Next year Iran will share the SAARC high table as an observer along with global powers like US, EU, China, Japan and South Korea.

Second, Shi'ia majority Iran shares about 800 kilometers of troubled borders with Sunni majority states of both Pakistan and Afghanistan. Iran, Pakistan and Afghanistan form a triangle on issues related to trade and terror- both of which figured high on the agenda of the 14th SAARC summit and directly impinge upon India's security. Iran-Pakistan relations became strained when Pakistan-backed Taliban regime in Afghanistan killed Shi'ia Muslims in large numbers. However, after Taliban's fall, Iran, Pakistan and Afghanistan formed a Trilateral Commission to support the reconstruction of Afghanistan. Iran and Pakistan also supported the Bonn Agreement to revive the political process in Afghanistan. In fact, Iran is one of the leading donors for the reconstruction work in Afghanistan. However, the current resurgence of Taliban and spate of terrorist activities for which Afghanistan's President Hamid Karzai has implicitly blamed Pakistan in his speech at the SAARC summit has the potential to destabilize the region again. With India and Iran backing the current Afghan regime the polarization is clear and might defeat the objective laid down in the 14th SAARC summit declaration to "collectively overcome the challenges of terrorism." Third, Iran would also be linked to the economies in South Asia. Iran has already signed Preferential Trading Agreements with Pakistan and Bangladesh and is a major source of consumer goods for Afghanistan.

From India's point of view, Iran's observer status in SAARC has a five fold advantage. First, the battle against terror can be won only when all countries have a common plan of action which would include putting a halt to cross-border sponsorship of terrorism. Second, India views Iran as a major stakeholder in meeting its economic and energy security needs. Iran possesses 10% of world's oil and 15% of natural gas reserves. India and Pakistan are negotiating an Iran-Pakistan-India gas pipeline and unequivocal support for Iran's membership in SAARC might help in expediting the same. India has made it clear that despite pressures from countries like the US, there is no question of backing out of the deal. If voting against Iran on the nuclear issue was in our national interest, so is the support for the proposed gas pipeline. Iranians have in turn welcomed India's participation in its oil, gas and petrochemical industries and have called for deeper trade and economic relations with India.

Third, greater connectivity with Iran will also ensure easier access to the Central Asian Republics. Iran, India and Russia have declared their willingness for a North-South corridor to enhance 'connectivity' across Asia. Incidentally, there is an indication of a willingness expressed by Russia for an observer status in SAARC. India has been demanding transit facilities through Pakistan but the latter is apprehensive that this move will tilt the balance of power in favour of India and diminish its influence in the region.

Fourth, the presence of observers like Iran, China and US will have a moderating influence on the negotiations in the SAARC as Pakistan will now have to think twice before raising bilateral issues in SAARC meetings in violation of the principles and spirit of SAARC.

Finally, India needs to forge closer ties with Iran to ensure that its regional influence does not diminish particularly when countries like China are trying to attract West Asian neighbours for their energy security and increase their political influence across Asia.

Note: The views expressed are those of the author and do not represent those of the Indian Government.