<br /> India and Russia could be connected to each other via a multi-mode network for carrying freight via the International North South Transportation Corridor (<keyword id="2075269" type="ORGANIZATION" weightage="100" keywordseo="INSTC">INSTC</keyword>). The corridor would connect the two countries via Europe and Iran.<br />
<br />
Also read:  <a href="http://www.businessinsider.in/India-deal-for-Chabahar-Port/articleshow/52402008.cms">Here is how India will gain from the strategic pact for developing Chabahar Port</a><br />
<br />
A dry run of container movement via this green corridor (smooth customs facilitation) will soon be conducted, to honour the 70th anniversary of Indo-Russian diplomatic ties on April 13.<br />
<br /> When used, INSTC will significantly reduce the time taken and cost for transport of goods between India and <keyword id="833829" type="CITY" weightage="100" keywordseo="Eurasia">Eurasia</keyword>, thus increasing economic activities between India and the resource-rich markets of Russia and Europe.<br />
<br />
It was after India decided to join international customs convention TIR following approval from the cabinet that the corridor has moved to being implemented.<br />
<br /> Delhi is working on INSTC as part of connectivity initiatives along with the implementation of China's <keyword id="3316632" type="UNKNOWN" weightage="100" keywordseo="One-Belt-One-Road">One Belt One Road</keyword> strategy.<br />
<br />
Prime Minister <a href="http://www.businessinsider.in/topic/Narendra-Modi">Narendra Modi</a>, who is set to visit St Petersburg for International Economic Forum in June, might also visit the Astrakhan entry point of INSTC in Russia.<br />
<br />
Talking of INSTC, it is a 7,200-km long network which would have rail, road and water routes. By reducing the travel costs and time, it is all set to give a major boost to trade between Russia, <a href="http://www.businessinsider.in/politics/India-Iran-unite-on-combating-terror-and-radicalism/articleshow/52402271.cms">Iran</a>, Central Asia, India and Europe.<br />
<br />
Also read:  <a href="http://www.businessinsider.in/India-Iran-ties/articleshow/52400926.cms">India to invest 1 lakh crore in Iran so that it can enter Central Asia without stepping into Pakistan</a><br />
<br />
(Image source Youtube)

A multi-mode network for moving freight between India and Russia could soon be a reality

<br /> The Cabinet today more than tripled the funding for exports to <keyword id="41896" type="COUNTRY" weightage="100" keywordseo="Iran">Iran</keyword> to Rs 3,000 crore to step up the country's exports to Iran and deepen India's relationship as a strategic partner, said an official statement after the Cabinet meeting chaired by Prime Minister Narendra Modi. <br /><br />

	The approval is for increasing the framework agreement between Exim Bank of India and a consortium of Iranian banks led by Central Bank of Iran for financing the purchase of goods and services from India to Rs 3,000 crore, from Rs 900 crore. 
<br /><br />

	This will be done by utilising Export Development Fund. 
<br /><br />

	"The proposal provides for domiciling two contracts of export of steel rails by STC and for the Chabahar Port Development project previously approved by the Cabinet under EDF," Telecom Minister Ravi Shankar Prasad told PTI. 
<br /><br />

	The Exim Bank and seven Iranian Banks led by Central Bank of Iran had negotiated a framework agreement in November 2014 for financing the purchase of goods and services from India by Iranian entities to the tune of Rs 900 crore under the EDF. 
<br /><br />

	The increase in quantum to Rs 3,000 crore will enable the Exim bank to provide buyer's credit facility to Iran secured via sovereign guarantee from Iran for the exports. 
<br /><br />

	"This will provide an opportunity to Indian companies to penetrate and enhance their footprint in Iran, along with facilitating the growing trade and investment with Iran. This will also help in employment generation and development of ancillary activity in India," the statement said.

	<br />
	<br />
	(Image credits: indiatimes)

Government triples export funding to Iran to Rs. 3000 cr

<br /> Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s travel diary could soon be having some more new places. Come July, Modi would be visiting five Central Asian countries with an intent to tap huge natural resources including hydrocarbon and uranium. As per a news report in The Economic Times, Modi plans to spend a day each in Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan and <keyword id="169344" type="COUNTRY" weightage="20" keywordseo="Tajikistan">Tajikistan</keyword>, diplomatic sources told the financial daily. The trip is being clubbed with Modi's maiden visit to <keyword id="6358826" type="COUNTRY" weightage="20" keywordseo="Russia">Russia</keyword> for the Brics summit in <keyword id="271311" type="CITY" weightage="20" keywordseo="Ufa">Ufa</keyword> on July 8 and 9, sources hinted. Modi is also expected to attend the <keyword id="157954" type="ORGANIZATION" weightage="20" keywordseo="Shanghai-Cooperation-Organisation">Shanghai Cooperation Organisation</keyword> summit in the same city on July 9 and 10.<br />
<br /> <keyword id="1333" type="COMPANY" weightage="20" keywordseo="Beijing">Beijing</keyword> has made huge inroads in the region, with which it shares geographical boundaries, by laying pipelines to harness hydrocarbon and constructing railway and road network to connect Europe via <keyword id="6360296" type="UNKNOWN" weightage="20" keywordseo="Central-Asia">Central Asia</keyword>. Prime ministerial trips to Central Asia have been few and far between notwithstanding its geographical proximity, strategic importance and abundance of natural resources.<br />
<br /> While many former Prime Minsters from <keyword id="6358441" type="PERSON" weightage="20" keywordseo="Narasimha-Rao">Narasimha Rao</keyword> to <keyword id="47100" type="PERSON" weightage="20" keywordseo="Atal-Bihari-Vajpayee">Atal Bihari Vajpayee</keyword> and <keyword id="6359397" type="PERSON" weightage="20" keywordseo="Manmohan-Singh">Manmohan Singh</keyword> have visited these countries lack of road and sea access has not allowed India to realise full trade potential with the region. This could change after India develops the Chabahar port in <keyword id="41896" type="COUNTRY" weightage="20" keywordseo="Iran">Iran</keyword> and will use the nation as a transit for Central Asia. India's defence ties with some countries of the region have been upgraded in recent years. India also shares historical bonds with Central Asia and enjoys goodwill in the region, thanks to its ties with the erstwhile <keyword id="6365126" type="COUNTRY" weightage="20" keywordseo="Soviet-Union">Soviet Union</keyword> of which the nations were a part.<br />
<br /> (Image: <keyword id="-101" type="COMPANY" weightage="20" keywordseo="India-Times">India Times</keyword>)<br />
 <br />

Modi to fly overseas yet
again in July! This time to 5 Central Asian
countries

<p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><ul class="summary-list"><li><strong>India and Japan are expected to continue discussing a logistics deal during a summit later this month.</strong></li><li><strong>The deal would allow both of their militaries to access bases and logistical support from the other.</strong></li><li><strong>Both India and Japan have sought to counter China's growing influence in the Indian Ocean region.</strong></li></ul><p>A meeting between Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe later this month may yield more progress on a deal that would allow their armed forces to share military facilities.</p><p>The proposed agreement, likely to be discussed during the 13th India-Japan summit in Tokyo on October 28 and October 29, would increase their security cooperation in the Indo-Pacific region by allowing the reciprocal exchange of supplies and logistical support, according to <a href="https://www.deccanherald.com/national/india-japan-share-military-698413.html" target="_blank" rel="noopener">the Deccan Herald</a>.</p><p>The proposed deal was first discussed when Japan's <keyword id="6354810" type="UNKNOWN" weightage="100" keywordseo="defense">defense</keyword> minister, Itsunori Onodera, met with India's defense minister, Nirmala Sitharaman, in New Delhi in August. It came up again this month during a meeting in Delhi between Modi and Abe's national-security advisers.</p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><p>Sources with knowledge of preparations for the summit <a href="https://www.deccanherald.com/national/india-japan-share-military-698413.html" target="_blank" rel="noopener">told the Herald</a> that the deal would allow Japan and India to exchange logistical support, including supplies of food, water, billets, petroleum and oil, communications, medical and training services, maintenance and repair services, spare parts, as well as transportation and storage space.</p><p>It's not clear if any agreement would be signed this month, though there are signs India and Japan want to conclude it in the near term, given plans to increase joint military exercises next year and in 2020, according <a href="https://thediplomat.com/2018/10/india-japan-mull-allowing-their-armed-forces-to-use-each-others-military-bases/" target="_blank" rel="noopener">to The Diplomat</a>.</p><p>The deal would <a href="https://thediplomat.com/2018/10/india-japan-mull-allowing-their-armed-forces-to-use-each-others-military-bases/" target="_blank" rel="noopener">not commit</a> either country to military action, but it would allow their militaries - both <a href="https://www.businessinsider.com/most-powerful-militaries-in-the-world-ranked-2018-2" target="_blank" rel="noopener">among the most powerful</a> in the world - to access ports and bases run by the other.</p><p>For India, that means it would be able to use Japan's base in Djibouti, which is strategically located at the Horn of Africa between the Suez Canal and the Indian Ocean, overlooking one of the world's busiest shipping corridors.</p><p>In addition to Japanese troops, Djibouti also hosts a major US special-operations outpost at Camp Lemonnier, just a few miles <a href="https://www.businessinsider.com/china-troops-to-overseas-base-operational-security-concerns-for-us-2017-7" target="_blank" rel="noopener">from China's first overseas military outpost</a>, which opened in 2017 and which US officials have said raises "very significant operational security concerns."</p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><p>In turn, Japan would be able to access Indian bases in the Andaman and Nicobar Islands, which sit on important sea lanes west of the Malacca Strait, a major maritime thoroughfare between the Indian and Pacific oceans. (The <a href="https://www.businessinsider.com/india-to-buy-submarines-amid-china-naval-activity-in-the-indian-ocean-2017-7" target="_blank" rel="noopener">majority of China's energy supplies</a> currently flow through the Indian Ocean and the Malacca Strait.)</p><p>India <a href="https://www.businessinsider.com/india-china-more-us-made-sub-hunting-planes-2018-1" target="_blank" rel="noopener">has started stationing</a> advanced P-8 Poseidon maritime patrol planes and maritime surveillance drones at the Andaman and Nicobar Islands.</p><p>At the summit later this month, Japan is also <a href="https://thediplomat.com/2018/10/india-japan-mull-allowing-their-armed-forces-to-use-each-others-military-bases/" target="_blank" rel="noopener">expected to raise</a> India's potential purchase of 12 Shinmaywa US-2i search-and-rescue and maritime surveillance planes, which would also be stationed at the islands.</p><p>Delhi reached a similar logistical-support deal <a href="https://thewire.in/diplomacy/india-and-france-sign-14-agreements-in-a-move-towards-maritime-cooperation" target="_blank" rel="noopener">with France</a> - which has territories in the southern Indian Ocean and a base in Djibouti - earlier this year and <a href="https://thediplomat.com/2016/05/5-reasons-why-india-agreed-to-a-logistics-agreement-with-the-united-states/" target="_blank" rel="noopener">with the US</a> in 2016. (India and the US <a href="https://www.businessinsider.com/us-india-comcasa-deal-improves-ability-to-communicate-and-track-subs-2018-9" target="_blank" rel="noopener">reached another deal</a> on communications and technical exchanges in September.)</p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><p>Further discussion of an India-Japan logistical-support deal comes as those two countries and others seek to ensure freedom of movement in the Indian Ocean and to counter what is seen as growing Chinese influence there.</p><p>Japan, which, <a href="https://www.businessinsider.com/china-india-recalibrating-after-doklam-but-future-conflict-possible-2018-10" target="_blank" rel="noopener">like India</a>, has <a href="https://www.businessinsider.com/trump-and-china-japan-launches-sub-with-lithium-ion-battery-2018-10" target="_blank" rel="noopener">territorial disputes with China</a>, has sought to expand its military's capabilities and reach.</p><p>Earlier this month, Japan's largest warship, the Kaga helicopter carrier, sailed into the port at Colombo, in Sri Lanka - a visit meant to reassure Sri Lanka that <a href="https://www.businessinsider.com/china-japan-navies-build-ties-with-sri-lanka-amid-fight-for-influence-2018-10" target="_blank" rel="noopener">Japan would deploy military assets</a> to a part of the world where Chinese influence is growing.</p><p>A few days after the Kaga left Colombo, Sri Lanka navy ships were <a href="https://www.businessinsider.com/china-india-recalibrating-after-doklam-but-future-conflict-possible-2018-10" target="_blank" rel="noopener">scheduled to conduct exercises</a> with both the Indian and Japanese navies.</p><p>Japan has also expanded its security partnerships with countries around the Indian Ocean and <a href="https://www.businessinsider.com/japan-developing-projects-in-indian-ocean-amid-china-india-rivalry-2018-5" target="_blank" rel="noopener">pledged billions of dollars</a> for development projects in the region.</p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><p>Beijing's activity around the Indian Ocean region is particularly concerning for Delhi.</p><p>China's base in Djibouti, its role in the Pakistani port of Gwadar, its 99-year lease of the Hambantota port in Sri Lanka, and other infrastructure deals with countries in the region have set Delhi on guard, Faisel Pervaiz, a South Asia expert at the geopolitical-intelligence firm Stratfor, told Business Insider earlier this month.</p><p><span style="font-weight: 400;">"India's view is that South Asia's our neighborhood, and if another rival military power is expanding its presence - whether in Bhutan, whether in the Maldives, whether in Sri Lanka, whether in Nepal - that is a challenge, and that is something that we need to address," Pervaiz said.</span></p><p><span style="font-weight: 400;">India's focus is likely to remain on <a href="https://www.businessinsider.com/china-india-recalibrating-after-doklam-but-future-conflict-possible-2018-10" target="_blank" rel="noopener">its land borders</a> with rivals China and Pakistan, Pervaiz said, but Delhi has made <a href="https://www.businessinsider.com/amid-simmering-tension-with-china-india-is-increasing-naval-strength-2017-11" target="_blank" rel="noopener">moves to bolster its position</a> in the Indian Ocean region - a change in focus that has been called "<a href="https://www.businessinsider.com/china-japan-navies-build-ties-with-sri-lanka-amid-fight-for-influence-2018-10" target="_blank" rel="noopener">a tectonic shift</a>."</span></p><p><span style="font-weight: 400;"><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></span></p><p><span style="font-weight: 400;">India is working <a href="https://www.businessinsider.com/us-backs-india-plan-for-chabahar-port-amid-increasing-pressure-on-iran-2018-7" target="_blank" rel="noopener">to develop a port at Chabahar</a> on Iran's southern coast, which would provide access to Central Asia and circumvent existing overland routes through Pakistan to Afghanistan.</span></p><p><span style="font-weight: 400;">India is particularly concerned about Chinese submarine activity in the Indian Ocean and has held anti-submarine-warfare <a href="https://www.businessinsider.com/r-wary-of-chinas-indian-ocean-activities-us-india-discuss-anti-submarine-warfare-2016-5" target="_blank" rel="noopener">discussions</a> with the US and is seeking to <a href="https://www.businessinsider.com/india-to-buy-submarines-amid-china-naval-activity-in-the-indian-ocean-2017-7" target="_blank" rel="noopener">add more subs to its own force</a>.</span></p><p><span style="font-weight: 400;">"For India, the concern now is that although it maintained this kind of regional hegemony by default, that status is beginning to erode, and that extends to the Indian Ocean," Pervaiz said. "India wants to maintain [its status as] the dominant maritime power in the Indian Ocean, but ... as China's expanding its own presence in the Indian Ocean, this is again becoming another challenge."</span></p>

2 of Asia's biggest militaries are working on a deal that could give them an edge over China

<br /> The recent pact between Iran and the US, along with the <keyword id="6355110" type="ORGANIZATION" weightage="20" keywordseo="European-Union">European Union</keyword> (EU) and other western countries, is hailed as US President <keyword id="15962" type="PERSON" weightage="20" keywordseo="Barack-Obama">Barack Obama</keyword>’s biggest diplomatic victory. The western countries have managed to coerce Iran to agree to a deal that is seen as the once-belligerent Tehran conceding defeat in its efforts to combat the US’ attempts to strangle it economically for nursing nuclear ambitions.<br />
Under the deal, Iran has agreed to limit uranium enrichment to only one facility by:<br />
<ul>
	<li>
		Redesign a plant that refines plutonium heavy-water</li>
	<li>
		Converting another uranium enrichment site into a facility for production of medical isotopes</li>
	<li>
		Cutting down the number of centrifuges enriching uranium from 19,000 to about 6,000.</li>
</ul> More importantly, it has acceded to a rigorous inspection of its nuclear facilities in return for lifting the US, EU and UN sanctions. While the deal—started after the election of <keyword id="6374564" type="UNKNOWN" weightage="20" keywordseo="Hassan-Rouhani">Hassan Rouhani</keyword> as Iranian President in 2013 and mediated by Sultanate of Oman—helped restore <keyword id="108527" type="EVENT" weightage="20" keywordseo="Diplomatic-Relations">diplomatic relations</keyword> between the US and Iran, which have been hampered since the 1979 Iranian Revolution. It has significant implications for countries in Middle East and Asia, especially India.<br />
<br />
As a major net importer of oil, India has already benefited from <a href="http://edition.cnn.com/2015/07/14/politics/iran-nuclear-deal-highlights/?iid=EL">the US-led nuclear deal</a> with Tehran. Oil prices have declined in recent days, driven largely by expectations of more Iranian crude hitting the market (India saves nearly $1 billion in import costs for every dollar drop in global crude prices).<br />
<br /> In fact, India has been preparing for the deal—Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> recently met with Rouhani on the sidelines of the <keyword id="157954" type="ORGANIZATION" weightage="20" keywordseo="Shanghai-Cooperation-Organisation">Shanghai Cooperation Organisation</keyword> summit in Russia’s Ufa, where he invited Rouhani to visit India and expressed his desire to visit Iran. His desire to travel to Iran is seen as part of a calibrated strategy to visit the Middle East neighbourhood, including Israel, Palestine, Jordan and Turkey, in the second year in power after visiting countries in the immediate neighbourhood and Asia-Pacific besides <keyword id="52079" type="ORGANIZATION" weightage="20" keywordseo="G-7">G-7</keyword> partner countries within a year of coming to power.<br />
<br />
The US-Iran deal will have significant impact on the energy and economic ties between Indian and Iran as India continues to be the world’s fourth largest energy consumer and imports more than three-quarters of its oil and an increasing amount of its natural gas.<br />
<br />
A few years ago, 17% of Indian oil imports were from Iran, which had become the country’s second largest supplier. Last year, Iran was seventh on the list, supplying only 6% of Indian oil imports.<br />
<br />
The enhanced volume oil that is expected to flow to India following the lifting of sanctions on Iran will help the country meet its burgeoning fuel needs as it embarks on an ambitious journey to solidify its position as the top economic power in the region along with China. This is particularly significant considering sanctions on the Iranians since 2003 have forced India to increasingly look at Iraq, Kuwait, the UAE and Saudi Arabia for oil imports.<br />
<br /> The <keyword id="6360789" type="ORGANIZATION" weightage="20" keywordseo="Modi-Government">Modi government</keyword>, which benefitted a lot from falling oil prices (when Modi came to power, the price for crude oil was <a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=105164">$108.05 a barrel</a> which declined to <a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=123232">$57.19 a barrel</a> on the day of the Iran-US deal), hopes that a possible oil glut following the re-entry of Iranian oil in global oil market—which has already inundated with increased Shale production in the US—will greatly benefit Indian oil refining firms.<br />
<br />
Considering China’s role in developing and modernising the port of Gwadar in Pakistan and with Pakistan not a feasible transit option, India sees the potential for Iran to serve as a transit route to Afghanistan and Central Asia. This has enhanced India’s desire to invest in upgrading the Iranian port of Chabahar. While talks over Chabahar have been halted over and over again, the nuclear deal has cleared crucial political and financial obstacles and India expects the port to be operational by <a href="http://www.ndtv.com/india-news/india-iran-strategic-chabahar-port-to-be-operational-by-december-2016-wii-give-access-to-afghanistan-765599">the end of 2016</a>. The deal may also lead to fruitful discussions over developing another <a href="http://pragati.nationalinterest.in/2015/03/india-and-iran-its-not-just-energy-stupid/">transit corridor</a> through Iran to Europe and Russia.<br />
<br />
The deal will also enhance the relation between India and the US which has been under strain of late as the US has been looking askance at India’s relationship with Iran and especially its oil imports. Indian energy firms like ONGC have also found their financial interests being hampered due to American sanctions as they have made considerable investments in Iran.<br />
<br />
However, <a href="http://www.businessinsider.in/searchresult.cms?query=Iran+deal">the dea</a>l is also going to hurt India—as India refused to fully take part in the US-led sanctions on Iran, it has emerged a key trading partner of Tehran in the recent past with Indian corporates making a windfall (exports to Iran nearly doubled to $3.3 billion between 2009 and 2013). However, once the sanctions are lifted, Indian businesses will begin to face stiff global competition in doing business in Iran. For instance, India has been a major exporter of automobile components, tools, motors and chemicals to Iran. Now Indian exporters will have to compete with Eastern European manufacturers, who produce low-end products like spanners, hand tools and auto parts. The fall in the value of euro, over the last few years, is expected to further enhance the competitiveness of European manufacturers.<br />
(Image: The Economic Times)<br />

Why Iran nuclear deal may lead to windfall gains for India

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>AP Photo/Manish Swarup</span></p><p class="caption">Indian Prime Minister Narendra Modi with Chinese President Xi Jinping at the BRICS summit in Goa, India, October 16, 2016.</p></div><p></p></div></div></p><ul><li><strong>China has been expanding its foreign involvement, in part through development projects around the world.</strong></li><li><strong>Beijing's growing influence has concerned its neighbors - chief among them India and Japan.</strong></li><li><strong>To counter China, Tokyo is looking for a bigger role in the region, working with India to get it.</strong></li></ul><p>China's growing presence in the Indian Ocean region worries India, which has sought to counter Beijing's influence there. But India is not the only country in Asia looking to <a href="http://www.businessinsider.com/ways-countries-in-asia-are-responding-to-china-2018-5" target="_blank" rel="noopener">balance against a rising China</a>.</p><p>Japan, which has long deferred to the US, is now pursuing a bigger role, expanding security partnerships in the region and boosting its involvement in infrastructure projects - many of which rival China's own projects.</p><p>In 2015, Tokyo announced plans to spend hundreds of billions on infrastructure projects in Asia, Oceania, and Africa in coming years, and since 2016, Japan has committed <a href="https://www.lowyinstitute.org/the-interpreter/japan-plans-build-free-and-open-indian-ocean" target="_blank" rel="noopener">nearly $8 billion</a> to projects to develop ports and related infrastructure around the Indian Ocean.</p><p><span>"The scale of [Japan's] infrastructure investments in the region rivals, and sometimes exceeds, that of China," David Brewster, a specialist in South Asian and Indian Ocean strategic affairs at the Australian National University, <a href="https://www.lowyinstitute.org/the-interpreter/japan-plans-build-free-and-open-indian-ocean" target="_blank" rel="noopener">wrote this week</a> for the Lowy Institute's Interpreter.</span></p><p><span>Such projects are part of Japanese Prime Minister Shinzo Abe's Free and Open Indo-Pacific (FOIP) Strategy, meant to further connect Asia and Africa and the Pacific and Indian Oceans while promoting stability and prosperity.</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Adnan Abidi</span></p><p class="caption">Japanese Prime Minister Shinzo Abe and his Indian counterpart, Narendra Modi, in New Delhi, December 12, 2015.</p></div><p></p></div></div></p><p><span>FOIP projects currently <a href="http://the-japan-news.com/news/article/0004465715?m=jnnl" target="_blank" rel="noopener">under consideration</a> include a joint project with India and Sri Lanka to expand an existing port at Trincomalee in Sri Lanka, a joint project with Myanmar and Thailand to build a new port and special economic zone around Dawei in Myanmar, and a project with Bangladesh to build a new port at Matabari to handle half that country's cargo volume.</span></p><p><span>Japan has started behind-the-scenes talks with those governments, and Japan's International Cooperation Agency has started drafting plans for those projects, <a href="http://the-japan-news.com/news/article/0004465715?m=jnnl" target="_blank" rel="noopener">according</a> to Japanese newspaper Yomiuri Shimbun.</span></p><p><span>While China recently acquired a 99-year lease of a Sri Lankan port at Hambantota, which <a href="http://www.businessinsider.com/indias-concern-with-beijing-expansion-grows-with-sri-lanka-port-deal-2017-8" target="_blank" rel="noopener">raised ire in India</a>, The Yomiuri Shimbun reported that China failed to make progress on similar projects in Myanmar and Bangladesh due to Japan's development plans.</span></p><p><span>Delhi helped influence Bangladesh's decision to award the Matarbari project to Tokyo, and Japan and India <a href="https://www.lowyinstitute.org/the-interpreter/japan-plans-build-free-and-open-indian-ocean" target="_blank" rel="noopener">could cooperate</a> on future projects, including at Trincomalee and on Iran's Chabahar port, which India sees as <a href="http://www.businessinsider.com/india-steering-a-tricky-path-through-us-allies-and-foes-in-south-asia-2017-11" target="_blank" rel="noopener">a valuable link to central Asian markets</a> (though that project could be affected by US sanctions on Iran.)</span></p><p><span>Japan's interest in a bigger regional role <a href="http://foreignpolicy.com/2018/02/09/japan-takes-the-lead-in-countering-chinas-belt-and-road/" target="_blank" rel="noopener">isn't new</a>, but has grown in recent months, amid <a href="http://www.businessinsider.com/ways-countries-in-asia-are-responding-to-china-2018-5" target="_blank" rel="noopener">doubts about US policy</a> in the region. But, Brewster writes, Japan's approach is <a href="https://www.lowyinstitute.org/the-interpreter/japan-plans-build-free-and-open-indian-ocean" target="_blank" rel="noopener">in clear competition</a> with China's Belt and Road Initiative (BRI).</span></p><p>The BRI has been criticized as being unsustainable and lacking transparency, and China has been accused of using it to further "<a href="http://www.businessinsider.com/china-influence-pacific-western-countries-push-back-2018-4" target="_blank" rel="noopener">debt-trap diplomacy</a>." US officials have warned that Beijing is "<a href="http://www.businessinsider.com/china-weaponizing-capital-us-navy-chief-awake-at-night-2018-3" target="_blank" rel="noopener">weaponizing capital</a>" through the initiative, and the International Monetary Fund has warned China and its possible partners about deals that could <a href="http://www.businessinsider.com/china-influence-pacific-western-countries-push-back-2018-4" target="_blank" rel="noopener">create mounting debt</a>.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">Projects subsumed under One Belt, One Road program by China, as of March 2017.</p></div><p></p></div></div></p><p>Japan has said its approach is distinct from the BRI in important ways, according to Brewster, including its emphasis on safety, reliability, social and environmental considerations, and on aligning with local development goals and a broader rules-based order. Japan also includes India as a partner and economic hub, whereas China's BRI avoids India.</p><p>India and Japan also announced the Asia-Africa Growth Corridor in May 2017 to further expand ties. It was supported by several African countries, including South Africa, and is poised to be another alternative to China's BRI. Beijing has tried <a href="https://economictimes.indiatimes.com/articleshow/60345807.cms" target="_blank" rel="noopener">to undercut it</a>, pushing India and South Africa to merge the project with the BRICS platform, which would exclude Japan and dilute Delhi's influence.</p><p>There are <a href="http://foreignpolicy.com/2018/02/09/japan-takes-the-lead-in-countering-chinas-belt-and-road/" target="_blank" rel="noopener">doubts</a> about whether Japan has the resources to compete with China's infrastructure push, and even though Japan has positioned its offerings as alternatives to China's, Tokyo hasn't precluded future cooperation - Japanese officials <a href="https://thediplomat.com/2017/11/aimai-japans-ambiguous-approach-to-chinas-belt-and-road/" target="_blank" rel="noopener">have even said</a> the BRI could ultimately benefit the global economy, depending on how it's implemented.</p><p>But there is little doubt Tokyo and Delhi are have their eyes on countering their bigger neighbor.</p><p>"Japan is concerned about a rising Chinese profile beyond the Western Pacific, and India is equally concerned about the strategic implications of China's commercial engagements in its neighborhood," Darshana Baruah, an analyst at Carnegie India, <a href="http://foreignpolicy.com/2018/02/09/japan-takes-the-lead-in-countering-chinas-belt-and-road/" target="_blank" rel="noopener">told Foreign Policy</a> earlier this year. "These projects are aimed at creating an alternative to China's Belt and Road."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/why-the-yuan-not-euro-could-become-global-currency-dollar-china-usa-eu-dharshini-david-2018-4">Why China's Yuan, not the Euro, could become the dominant global currency</a></h3>        <div>                    </div>    </div>

Japan is quietly gaining an edge amid a growing competition between India and China

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Jonathan Ernst</span></p><p class="caption">President Donald Trump displays a presidential memorandum after announcing his intent to withdraw from the JCPOA Iran nuclear agreement in the Diplomatic Room at the White House in Washington, U.S., May 8, 2018.</p></div><p></p></div></div></p><ul class="summary-list"><li>The Trump administration's strategy of maximum pressure on Iran hasn't achieved its intended impact.</li><li>To fight the oil sanctions, Tehran has found workarounds. It now sells its crude on an anonymous Energy Exchange platform to customers whose identity will remain secret.</li><li>According to the National Security Adviser John Bolton, more sanctions and stricter enforcement are on their way. They are sorely needed.</li></ul><p style="font-weight: 400;">The Trump administration's strategy of maximum pressure on Iran took full effect on Nov. 5. It included the re-imposition of oil sanctions and designation of more than 700 Iranian entities, individuals, aircraft, and vessels. However, so far, the impact has fallen short of what will be required for true maximum pressure, though the administration is on the right path. </p><p style="font-weight: 400;">Iran's currency, the rial, has shown surprising resiliency. On Nov. 4, the price of the U.S. dollar in Tehran reached<span> </span><a href="https://www.bonbast.com/historical/usd/2018/11" data-saferedirecturl="https://www.google.com/url?q=https://www.bonbast.com/historical/usd/2018/11&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNF1js3xS9jECFB_8OfwgTm1rNmQ4g">149,000 rial</a>. One week later, on Nov. 12, the price decreased by 7% to<span> </span><a href="https://www.bonbast.com/historical/usd/2018/11" data-saferedirecturl="https://www.google.com/url?q=https://www.bonbast.com/historical/usd/2018/11&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNF1js3xS9jECFB_8OfwgTm1rNmQ4g">138,500</a> rial. Admittedly, Iran's underground forex market is shallow and subject to heavy manipulation by the Central Bank, but the rial appreciation is in line with other signals.</p><p style="font-weight: 400;">The Tehran Stock Exchange has shown similar signs of life. The Overall Index on Nov. 4 was 182,918. One week later, on Nov. 12, it stood at 182,211 - a drop of only 0.4 percent. And in terms of the dollar value of the index, it actually shows a significant 7 % increase in value. </p><p style="font-weight: 400;">Meanwhile, Tehran's Energy Exchange celebrated its second crude oil deal this week. To fight the oil sanctions, Tehran found a workaround. It now sells its crude on an anonymous Energy Exchange platform to customers whose identity will remain secret. These customers, in turn, sell the oil in the international markets. This is how unknown buyers purchased<span> </span><a href="https://twitter.com/search?src=typd&amp;q=%22%D9%82%D8%A7%D8%B3%D9%85%DB%8C%20%D9%86%DA%98%D8%A7%D8%AF%22" data-saferedirecturl="https://www.google.com/url?q=https://twitter.com/search?src%3Dtypd%26q%3D%2522%25D9%2582%25D8%25A7%25D8%25B3%25D9%2585%25DB%258C%2520%25D9%2586%25DA%2598%25D8%25A7%25D8%25AF%2522&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNHefXCm7FNRV6LwN_CRRzaf6af_lw">700,000 barrels</a><span> </span>of Iran's crude oil on Nov. 11 for $64.97 per barrel. The cost was roughly 9% below the going rate posted by the National Iranian Oil Company. But it was a victory nevertheless in that sanction busters around the world now see a possible way around U.S. restrictions.</p><p style="font-weight: 400;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.reutersconnect.com/all?id=tag%3Areuters.com%2C2018%3Anewsml_RC1F40EC97A0%3A1766344808&amp;search=all%3ANAZANIN%20TABATABAEE%20YAZDI%2F%20TIMA%20">Alistair Bell/Reuters</a></span></p></div><p></p></div></div></p><p style="font-weight: 400;">In an even more significant development, the Saudis are now pushing for an<span> </span><a href="https://www.cnbc.com/2018/11/11/saudi-arabia-in-talks-to-cut-oil-output-after-us-waivers-hit-prices.html" data-saferedirecturl="https://www.google.com/url?q=https://www.cnbc.com/2018/11/11/saudi-arabia-in-talks-to-cut-oil-output-after-us-waivers-hit-prices.html&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNGOpT1qUq1P6cFYcEWd3jrnsj4fbQ">output cut</a>. Riyadh had previously pledged to flood the market to ensure that Iran could not cash in on high prices resulting from a restricted market stemming from U.S. sanctions. Higher prices mean more revenue from the oil that Iran does sell. </p><p style="font-weight: 400;">Furthermore, by issuing waivers for eight countries, the U.S. has not reduced Iran's oil exports to zero, though it has<span> </span><a href="https://www.fdd.org/analysis/2018/11/09/iranian-oil-exports-already-down-before-sanctions-came-back-online/" data-saferedirecturl="https://www.google.com/url?q=https://www.fdd.org/analysis/2018/11/09/iranian-oil-exports-already-down-before-sanctions-came-back-online/&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNEBYdMk1FdRFCI60HDN2devRfFPVg">taken offline 1 million barrels</a><span> </span>per day in six months without spiking oil prices - an impressive achievement. Iranian funds now will be locked up in escrow accounts that can only be accessed for approved humanitarian and limited commercial purposes, further squeezing accessible Iranian foreign exchange reserves. But much more needs to be done to collapse Iranian oil exports and police the escrow accounts to prevent the wide-scale sanctions busting that occurred last time around.</p><p style="font-weight: 400;">U.S. policy on SWIFT, the ubiquitous electronic banking transfer system, received some long-awaited clarity with the disconnection of the Central Bank of Iran and a number of designated Iranian banks. The administration permitted some Iranian banks to remain on the SWIFT system for humanitarian transactions but, as my colleagues Mark Dubowitz and Annie Fixler<span> </span><a href="https://www.fdd.org/analysis/2018/11/02/dont-let-irans-rulers-abuse-the-humanitarian-channel-to-the-detriment-of-the-people/" data-saferedirecturl="https://www.google.com/url?q=https://www.fdd.org/analysis/2018/11/02/dont-let-irans-rulers-abuse-the-humanitarian-channel-to-the-detriment-of-the-people/&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNFWu7Bo-ffTnYzloxPnlk6ODQdKKA">argued</a>, the administration will have to redouble its efforts to police this humanitarian channel. Iran has used humanitarian exemptions to U.S. sanctions in the past to run massive sanctions-busting schemes. </p><p style="font-weight: 400;">Moreover, the U.S. has issued waivers for Iraq and Afghanistan to trade with Iran. Both countries suffer from corruption and lack of transparency, which make them fertile grounds for Tehran's sophisticated sanctions-busting operations. Iraq, in particular, has become a<span> </span><a href="https://home.treasury.gov/news/press-releases/sm546" data-saferedirecturl="https://www.google.com/url?q=https://home.treasury.gov/news/press-releases/sm546&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNE9se2DMYoOQ3jdgnw_qOX3jPIJZw">major destination</a><span> </span>for Iranian goods and services. </p><p style="font-weight: 400;">Finally, there is the waiver issued for India's<span> </span><a href="https://timesofindia.indiatimes.com/india/us-exempts-india-from-certain-sanctions-for-development-of-chabahar-port-in-iran/articleshow/66531453.cms" data-saferedirecturl="https://www.google.com/url?q=https://timesofindia.indiatimes.com/india/us-exempts-india-from-certain-sanctions-for-development-of-chabahar-port-in-iran/articleshow/66531453.cms&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNFR6vptjiTUfbS094d0U40wDprabA">Chabahar port</a><span> </span>in Iran. Delhi was desperate for the exemption to permit a land-based supply route to Afghanistan as a substitute for the one controlled by its archenemy Pakistan. But Washington needs to understand the tradeoff. This port will allow India to grow its trade relationship with Iran. Delhi already is one of Tehran's top trade partners.</p><p style="font-weight: 400;">According to the National Security Advisor<span> </span><a href="https://www.voanews.com/a/trump-security-chief-bolton-vows-to-squeeze-iran/4656670.html" data-saferedirecturl="https://www.google.com/url?q=https://www.voanews.com/a/trump-security-chief-bolton-vows-to-squeeze-iran/4656670.html&amp;source=gmail&amp;ust=1542471592853000&amp;usg=AFQjCNHFxWD4ZDdKXCHVOB1f037l91nqlw">John Bolton</a>, more sanctions and stricter enforcement are on their way. They are sorely needed. The impact of the new sanctions to date is not sufficient to change the Iranian regime's behavior. To ensure maximum pressure, the U.S. sanctions campaign needs to cut Iran oil export to no more than 500,000 barrels per day in the next six months. The United States should continue to push countries like China, Turkey, and India to reduce trade, especially oil purchases. Iran's access to the escrow funds should be limited to humanitarian transactions only, with strict oversight to ensure there is no abuse.</p><p style="font-weight: 400;">From there, Washington should aggressively target Tehran's network of illicit financing and procurement in East Asia, Canada, Europe, Latin America, Turkey, the Caucuses, and Persian Gulf. Additionally, the U.S. needs to drain Tehran's resources by sanctioning and weakening its proxies in the region, especially in Syria and Lebanon, which Tehran sees as strategic strongholds.</p><p style="font-weight: 400;">Although Iran's economy has shown resiliency in the immediate aftermath of the latest round of sanctions, Tehran is on shaky ground. Its economy is still under strain, and its access to hard currency is shrinking. Meanwhile, discontent among everyday Iranians is on the rise. The Trump administration has a historic chance to force the clerical regime to alter its dangerous course, but such an extraordinary result requires extraordinary measures.</p><p style="font-weight: 400;"><em>Saeed Ghasseminejad is a senior advisor on Iran at the Foundation for Defense of Democracies, a Washington-based nonpartisan research institute focusing on national security and foreign policy.</em></p><p class="tagline">Get the latest Oil WTI price<a href="http://markets.businessinsider.com/commodities/oil-price?type=WTI"> here.</a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/nuclear-bomb-launch-procedure-us-government-president-2017-11">Here's how easy it is for the US president to launch a nuclear weapon</a></h3>        <div>                    </div>    </div>

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