American diktats. This is how many depict the vagaries of India's Iran policy. Its rhetoric of civilizational links with Tehran and overnight abandonment at the International Atomic Energy Commission (IAEA) raised heckles both inside and outside the country. It strongly rejected allegations of Iranian non-compliance of its obligations to the nuclear watchdog and yet sided with the US and voted against Iran. Some saw this as the worst moment in Indian diplomacy. Favorable sound bites on Iran-Pakistan-India (IPI) pipeline are not matched by progress on the ground. New Delhi talks of strategic energy partnership with Iran when price row continues to haunt negotiations over LNG supplies.

As a result, not many has bought the official denials and feel that Iran policy, especially regarding nuclear controversy and long-term energy deals, is influenced by, if not determined in, Washington. The more New Delhi tries to reiterate its 'independent' policy on Iran it becomes less and less credible. Because it failed to highlight the convergence of interests with Washington, many non-Left critics also felt that India's Iran policy is reeling under American diktats.

Though the American angle is important, India has to accommodate another player, namely the Arabs. Historically its Middle East policy has been sympathetic towards the Arabs and this bias is more prominent when New Delhi deals with non-Arab players such as Iran, Israel and Turkey. Its overwhelming interests in the region rest in cultivating and strengthening closer ties with the Arabs. Hence, whenever there is a major confrontation between Arab and non-Arab countries, India has invariably sided with the former. Normalization of relations with Israel, for example, followed and not preceded the Madrid peace conference of October 1991 whereby Arab players decided to seek a negotiated political settlement with the Jewish State. While the Pakistan factor offered a convenient excuse for India's lukewarm ties with Turkey, they are also influenced by the Arab factor.

The same holds true for Iran. For decades, New Delhi maintained 'correct' relations with Tehran. This was the case even after the Islamic revolution that overthrew the pro-Western Shah. Since the end of the Cold War, the bilateral relations have improved considerably. A number of factors were responsible for this shift.

In the post-Nasser era, Iraq has emerged as India's principal friend in the Middle East and political, economic and energy ties flourished especially under the reign of President Saddam Hussein. Furthermore, the political rhetoric of the Ayatollahs were alien to the Indian brand of secularism and like many other Arab countries, it was afraid of Iran 'exporting' its radical ideas to other countries in the Middle East and beyond. Largely due to this, New Delhi refused to name Baghdad as the aggressor during the prolonged Iran-Iraq war. The Iraqi misadventure over Kuwait in 1991 and the subsequent UN sanctions undermined this Indo-Iraqi bonhomie and forced India to scout for other friends in the Gulf.

Around the same time, Iran was also looking for new friends. The costly war with Iraq and prolonged isolation had their toll. After a decade long revolutionary zeal, it moved towards a more balanced view of the outside world. Leaders who followed Ayatollah Khomeini, especially Hashemi Rafsanjani, were political pragmatists and sought to mend fences with the outside world, especially the Arab countries. They sought to mollify ties with the Europe, especially over the controversial fatwa against British author Salman Rushdie. By making peace with Riyadh, Tehran contributed to an overall improvement in the Iranian-Arab relations.

Significant improvements in the Indo-Iranian relations occurred under these favorable circumstances. Beginning with the visit of Prime Minister P V Narasimha Rao in September 1993, both countries exchanged a number of high-profiled political contacts. If New Delhi hosted President Rafsanjani (April 1995) and Mohammed Khatami (January 2003), Atal Behari Vajpayee visited Tehran in April 2001. Thus both the Congress party and Bharatiya Janata Party contributed to improving ties with Tehran. Around the same time, Iran emerged as a major if not principal supplier of oil and India looked to Iran for its long-term energy security. Tehran's political importance vis-à-vis Pakistan and access to Central Asia and Afghanistan added strategic value to bilateral ties. Before long wider national consensus emerged within India regarding Iran and the need to improve and expand relations with Tehran.

At the same time, it is essential to recognize these improvements happened after and not before a fundamental transformation in Iranian-Arab relations. Of late, the progress made by Rafsanjani-Khatami period has eroded, especially since the election of Ahmadinejad as President in 2005. Controversies surrounding Iranian nuclear ambitions and periodic threats of military actions by Israel and United States worry a number of Arab neighbors of Iran.

There are other problems. Senior Iranian officials have been issuing periodic threats against pro-western monarchies in the Gulf. Some have renewed territorial claims over Bahrain and are not prepared to abandon an aggressive posture regarding three islands belonging to the UAE. Growing focus on Shia crescent stretching from Bahrain to Bekaa valley in Lebanon has unnerved many Sunni Arab rulers in the Gulf. For their part, countries like Saudi Arabia have been accusing Iran of 'converting' Sunnis in Iraq into Shia faith.

Thus, though Iran is important, India's vital interests lay with the Arab countries of the Gulf region. These countries not only supply bulk of its energy needs, they are also its principal trade partners in the Middle East. Above all over four million Indians are gainfully employed in the Arab countries of the Gulf and not in Iran. Hence, long-term stability of India's relations with the region revolves around Indo-Gulf relations.

In short, the Indo-Iranian relations progressed because of the lessened tension between Iran and the outside world, especially towards its immediate Arab neighbors. So long as Iran remains friendly towards the Arabs and adopts an accommodative view towards them, New Delhi would be more than happy to do business with Tehran. The moment the Arab-Iranian harmony is lost, India would be wary of being close to Iran, despite all its attractions of oil and gas.

*** P R Kumaraswamy teaches at Jawaharlal Nehru University and the Abu Dhabi-based Emirates Center for Strategic Studies Research (ECSSR) has just published his monograph on Indo-Iranian Relations and the Arab Prism. He can be contacted at kumaraswamy.pr@gmail.com.