Israel-Iran Conflict: Where Do China and India Stand? | Insight

Key Concepts

• China-Iran trade relationship (oil, Belt and Road Initiative)
• China's energy diversification
• Importance of the Strait of Hormuz
• China's limited leverage in the Middle East
• India-Iran relations (historical ties, Chabahar port)
• India-Israel relations (strategic partnership, trade)
• India's balancing act between Iran and Israel
• India Middle East Europe Connectivity Corridor (IMEC)
• Multilateralism and the rules-based international order

China's Relationship with Iran

• Economic Ties: China is Iran's most important oil customer, especially due to US sanctions limiting Iran's buyers. China imports significant amounts of Iranian oil at discounted prices through independent refineries.
  • In 2017, 25% of Iran's total oil exports went to China. By 2023, it reached 89%.
• Energy Diversification: China has diversified its energy imports from Russia, Saudi Arabia, Iraq, and Oman. In 2024, the Middle East accounted for more than half of China's oil imports.
• Strait of Hormuz: China's primary concern is the potential disruption of oil flow through the Strait of Hormuz, which would severely impact its economy. Deutsche Bank predicted Brent crude could rise to $120 a barrel in extreme cases if fighting resumes.
• Belt and Road Initiative (BRI): China has a comprehensive strategic agreement with Iran, planning to invest $400 billion over 25 years. Iran is a crucial land bridge connecting the Central Asian part of the BRI to the Arabian Peninsula, Turkey, and Europe.
• Limited Leverage: Despite its economic involvement, China's influence over Iran and Israel is limited. China tends to offer verbal condemnation and calls for peace rather than direct intervention.

India's Relationship with Iran and Israel

• Historical Ties with Iran: India and Iran established formal ties in 1950, with civilization links existing for centuries. Bilateral trade amounted to $2.3 billion in the fiscal year ending 2023.
• Chabahar Port: India, Iran, and Afghanistan signed the Chabahar agreement in 2016 to create a transport corridor, with the Chabahar port as a key gateway for India's trade with Afghanistan, bypassing Pakistan.
• India Middle East Europe Connectivity Corridor (IMEC): India is developing an alternative to China's BRI, the IMEC, though Iran is not a direct collaborator.
• Strategic Partnership with Israel: Israel has emerged as a very important strategic partner for India, with significant trade, including defense trade, metals, and minerals.
  • A 2023 Pew survey showed 71% of Israelis have a favorable view of India, more than any other country in the world.
  • Indians had the most favorable view of Israel among Asian countries surveyed since the war in Gaza.
• Balancing Act: India aims to maintain stable relations with both Iran and Israel due to respective national interests.
• Neutral Stance: India hopes for a quick resolution to the Israel-Iran crisis. Prime Minister Modi spoke to Iranian President Raisi but did not condemn Israel's attacks.
• Shanghai Cooperation Organization (SCO): While the China-led SCO condemned Israeli military strikes, India distanced itself from the statement.

Multilateralism and the International Order

• The Israel-Iran conflict could be the "death knell of multilateralism." The video questions whether the rules-based international order is beyond repair.
• Each country defends its national interests and security, making it difficult to assign right or wrong in the conflict.