Economic Highlights

New Delhi, 30 June 2025

Iran’s Economic Leverage

NEW ARMS MARKET EMERGING

By Shivaji Sarkar 

Iran’s reassertion of power after its military confrontation with Israel isn’t just about geopolitics — it has the potential to reshape the region’s economic landscape in profound ways. With rising stature, renewed alliances, and access to key trade corridors, Iran may increasingly position itself to become a central economic actor in West Asia and beyond. 

The Israeli assaults exposed the unfathomed capacity that Iran has. It demonstrated its power to devastate Tel Aviv to Israeli gateway to Europe, the Haifa port, and dreams of the western India–Middle East–Europe Economic Corridor (IMEC). Iranian coordinated strategy flanking to Yemen, Lebanon and Gaza has had heavy cost on Israel and its master allies. 

For the first time Iran openly targeted Israel from its own territory in such scale, signalling new strategic confidence. It’s no more a pariah.It has put to myth that President Donald Trump was reshaping the Middle East by drawing closer to Israel's long-term adversaries. The assault exemplified that fear is not about Forget everything and run but it could also mean Face everything and rise. That is being termed as the major gain for an isolated Iran, which, some thought, was crushed under sanctions. It is also a showcase that an arms market exists beyond the Western dominance. Would new arms player emerge? It is quite likely and dependence on the West could dwindle. 

The U.S.-Israel military objective may not have been to dismantle Iran’s nuclear facilities — but rather to subdue and isolate a defiant regional power that had become a rallying point for anti-West forces. This fits a broader historical pattern seen with Egypt, Iraq, Libya, and Afghanistan.Indeed, if reports of US-Iran backchannel talks are true, they indicate Washington may prefer a contained, partially integrated Iran. But not one capable of leading an anti-West coalition.Any Western assistance for reconstruction will come with tight political strings, limiting Tehran’s space for ideological defiance. 

Yet, while Tehran may have gained in perception and prestige — particularly among its allies and adversaries — it's important to temper that view with realism.Iran’s rise, for now, is more symbolic than structural, and whether it can reshape regional economics in a lasting way depends on how it navigates post-conflict isolation, economic strain, and complex alliances. The potential is there, but the path forward is anything but assured. 

Iran holds some of the world’s largest reserves of oil and gas. In a less sanctioned world, this would be an obvious economic advantage. But despite its ability to keep exports flowing under the radar, Iran remains financially strangled by Western sanctions.China may buy oil, but it avoids direct capital transfers. Financially strained Russia, under US sanctions, offers little support. Gulf states, despite some improvement of relations with Saudi Arabia and Iran, are unlikely to challenge the sanctions by funding its recovery.Iran's energy power is real — but its monetization remains limited by external constraints and internal inefficiencies. 

Iran's role in the International North-South Transport Corridor (INSTC) – the link for connecting Russia and Central Asia, could, in theory, shift regional trade patterns. But decades after conception, the corridor still faces poor infrastructure, political fragmentation in the region and India’s ambivalence as it also bets on the Gulf-centric IMEC.Without external investment and regional stability, INSTC remains an underutilized alternative, not a transformational one. 

An emerging new axis of economic cooperation of - Tehran-Baghdad-Damascus-Beirut- can turn Iran’s political control across Iraq, Syria, Lebanon and Yemen. It might translate into the “Shia Crescent” viewed as turning into a semi-integrated trade and logistics block, with Iranian goods, fuel, and currency flowing across borders. There are views that the US and the sunniArabs would not like it. 

Wouldthe fledgling Crescent be able to undermine the US-backed economic models in the region; create alternative energy and trade routes, especially as Syria begins tentative reconstruction? Would the West allow Tehran to dominate grey-zone economies that operate outside Western sanctions regimes?  

Iran, also a BRICS member, with China its emerging sympathiser, might become an important player in de-dollarising. In reality, with its rupee trade with India decades back, it had rolled it on. India cocooned under the sanctions but still Iran maintains ties with India and could be a strength for BRICS, much to the chagrin of MAGA backers. It’s uncertain if the US would let Trump dream of – MIGA- Make Iran Great Again, a reality or push an anti-Iran tirade?Could there be an end or a new beginning to the tri-religion – Judaism, Christianity and Islam - Abrahamic war? 

Iran is exploring crypto, currency swaps, and non-dollar trade. But these measures remain tactical workarounds, not scalable systems; vulnerable to secondary sanction; unattractive to larger, risk-averse economies, including India. The India-owned Chabahar port despite initial success is stuck. While symbolic, these financial alternatives don’t yet offer the foundation for a new economic order. 

India has to reassess and take steps to become a leader of the global South. It may have to change its tack on Gaza and force Israel to stop strikesas also negotiate with the Palestinians on humanitarian ground, ask the West to allow a free trade with Iran, establish peace in the region and shed ambiguities in diplomacy. It has to demonstrate mettle at the upcoming BRICS meeting in July. Launched on the sidelines of the 2023 G20 summit in New Delhi, the IMEC was hailed as a counterweight to China’s Belt and Road Initiative and Pakistan. It aimed to connect Indian ports to the UAE and Saudi Arabia, and further to Europe via rail and shipping routes. 

Tehran’s manoeuvres—diplomatic, military, and strategic—have complicated India’s outreach and interests across West Asia. The IMEC's architecture carefully excluded Iran. That exclusion sowed the seeds of strategic retaliation from Tehran.Iran’s gains in stature are real — but they don’t automatically translate into economic dominance. The perception of strength post-conflict may help Iran politically, but rebuilding its economy and reshaping regional economics will require a stable, long-term détente with the West, major infrastructure investments, and an exit from isolation — none of which are currently guaranteed. 

So, can Iran reshape regional economics?Yes — but only if it first reshapes the constraints that still define its economy. And that, for now, remains a possibility, not a certainty.---INFA 

(Copyright, India News & Feature Alliance)

Tackling FIMI – Strengthening Resilience through Media Literacy and International Cooperation

The Centre for International Relations, in cooperation with the Schumacher Centre, INFA and the Indian Journalists Union, is leading an international initiative aimed at addressing the growing challenge of Foreign Information Manipulation and Interference (FIMI) in the Indian media landscape. The project focuses on strengthening media literacy, promoting fact-based narratives and enhancing societal resilience in the face of disinformation campaigns related to the ongoing global information conflict.

Working closely with local media professionals and academic partners in India, the initiative involves systematic monitoring and analysis of media content, identification and debunking of misleading narratives, and the promotion of balanced and verified information.

 Key components of the project include:

 Monitoring and analysis of FIMI-related narratives in Indian media,

 Information campaigns to present accurate facts and foster a better understanding of the war in Ukraine and its international context,

 Workshops and capacity-building sessions for journalists, journalism students, and media stakeholders to improve their ability to recognize and counter foreign manipulation techniques.

Tackling FIMI – Strengthening Resilience through Media Literacy and International Cooperation

The Centre for International Relations, in cooperation with the Schumacher Centre, INFA and the Indian Journalists Union, is leading an international initiative aimed at addressing the growing challenge of Foreign Information Manipulation and Interference (FIMI) in the Indian media landscape. The project focuses on strengthening media literacy, promoting fact-based narratives and enhancing societal resilience in the face of disinformation campaigns related to the ongoing global information conflict.

Working closely with local media professionals and academic partners in India, the initiative involves systematic monitoring and analysis of media content, identification and debunking of misleading narratives, and the promotion of balanced and verified information.

 Key components of the project include:

 Monitoring and analysis of FIMI-related narratives in Indian media,

 Information campaigns to present accurate facts and foster a better understanding of the war in Ukraine and its international context,

 Workshops and capacity-building sessions for journalists, journalism students, and media stakeholders to improve their ability to recognize and counter foreign manipulation techniques.

REWIND

New Delhi, 28 June 2025          

Pragmatic Push For Peace

By Inder Jit

(Released on 29 December 1977) 

Quiet has once again descended over the historic and imposing headquarters of the United Nations in New York. The 32^nd Session of the General Assembly, which began on September 20, has concluded. Delegations from 149 member states are now on their way back home at the end of a session which was both memorable and lively. Not everything that one had hoped for came to pass. Indeed, there was much left to be desired in more ways than one. Nevertheless, the Session will also be remembered for many credits.

Vital issues of war and peace were debated once again and various resolutions voted --- but with a difference. Unlike in the previous sessions, the discussions did not lead to any great bitterness or tension. In fact, the session was generally free of confrontation, even if controversies remained and each side tried hard to achieve its ends.

What is more, the session saw the United Nations diplomacy acquire a new, pragmatic dimension in its quest for lasting peace. The door was wisely left open time and again for outside initiatives to be taken within the framework of the United Nations objectives. Search for a meaningful basis for peace and security in the trouble-torn Middle East, for instance, was carried on outside the United Nations, as dramatized by President Sadat’s visit to Jerusalem.

Not unexpectedly, it generated both heat and controversy at the United Nations. Significantly, there was no confrontation. There is now a widespread understanding at the United Nations that durable peace in the Middle East cannot be realized until the question of Palestine is amicably resolved. Indeed, Israel’s latest proposals on this question show that Prime Minister Begin has begun to pay serious attention to the root of this problem in the Middle East.

President Sadat’s initiative may have given the impression that the United Nations had been unable to do anything in the matter. But such an impression would be contrary to facts. Israel, it has to be remembered, was created in 1947 by the partition of Palestine under a General Assembly resolution. But its boundaries have yet to be finally settled, and so also the future of the rest of Palestine outside Israel. Thus the United Nations has still to finish the job it undertook when it partitioned Palestine and created Israel. Otherwise, the very existence of Israel would continue to be questioned and there would be little hope of a lasting peace settlement.

Several familiar issues were spotlighted once again. Prominent among these was the vital issue of disarmament. Much was understandably repeated and some new points were also made. But the focus was mainly on the special disarmament session of the General Assembly due to be held in in May and June next year. A preparatory committee is now working on a draft for the Declaration on Disarmament, which will set out the objectives, intermediate targets and a time frame with a set of priorities for a detailed programme of action. The latter is expected to include a Treaty on the Prohibition of Nuclear Weapons Test and reduction of Military budget and diversion of resources thus released to development.

Considerable time and attention was also devoted to two other major issues Human Rights and the New International Economic Order. India and the other countries of the third world scored a significant victory when they successfully defeated a renewed western effort to create at this Session a post of a United Nations High Commissioner for Human Rights to monitor the performance of various countries in regard to human rights. The third world took the view that the existing Human Rights Commission should first look into the entire question of human rights and put forward proposals which would enable the international community to look into not merely the political rights as emphasized by the West, but also the economic and social rights.

On the economic front, however, the third world suffered a defeat in its efforts to push ahead on the question of establishing the new International Economic Order. After the Paris dialogue, the third world expected the United Nations to get the West to move on to more serious negotiations on a wide-ranging and more representative basis. But the developed Western countries apparently found it difficult to make concessions for the present neither in terms of liberalization of trade or in the rescheduling of debts or in the transfer of real resources. Even in regard to the Common Fund for Committees, the negotiations in Geneva have ended in failure, further reflecting the sad plight of the Western economies.

Consequently, the third world was constrained to recognize that no progress could now be made on substantive negotiations and decided instead to concentrate on organizational questions for the time being. It succeeded in establishing a new Committee comprising the entire U.N. Membership to monitor the negotiations taking place on all economic fronts and try to influence them in the direction of the New International Economic Order. In addition, the third world extracted from the developed countries on other organizational concession appointment at the United Nations Headquarters of a Director General for Development and Economic Co-operation who will function as an economic deputy to the Secretary General, MR. Waldheim.

How did India and its delegation fare? The March revolution gave India a big boost and greatly enhanced its image among all members of the United Nations, especially the third world countries who were particularly happy to see the world’s largest democracy survive the onslaught of dictatorial forces and uphold once again basic human freedoms and values. Interest in India thus revived and its voice was again heard at the UN with great interest and respect. This was reflected as much in the appreciation at the United Nations of Mr. Atal Behari Vajpayee’s powerful speech in eloquent Hindi, as in the key role which India and its Ambassador at the UN Mr. Rikhi Jaipal, played in getting the Security Council as its President for November to decide unanimously on a Mandatory Arms Embargo against South Africa. Not many know that it was the Indian draft resolution which was finally adopted by the Security Council.

India’s image was furthermore enhanced by the manner in which the delegation vigorously pursued a policy of genuine non-alignment, judging various issues strictly on merit and in accordance with the United Nations Charter.

What of the U.N.? Is it any more effective than it was? Opinion among a cross-section of veterans that I talked to in the popular delegates lounge appeared to be agreed on one point: The United Nations is slowly but surely getting stronger notwithstanding cynical comments here and there. Even the criticism of ineffectiveness is seen by these experts as carrying within it seeds of future growth and progress. World opinion is increasingly coming to accept the United Nations as a meaningful forum as reflected in the pressing request last month by the International Pilots Association for some UN initiative and action against hijacking. As Ambassador Jamil Baroody of Saudi Arabia who has represented his country at the UN since 1945, told me: “Without the UN, the world would have been greatly worse off. We would have had more tension, more conflicts and perhaps even a war by now”. The United Nations is clearly here to stay and has a role to play. It is, indeed, humanity’s only hope to lasting peace and a just world order. ---INFA

(Copyright, India News & Feature Alliance)