BACKGROUND: Last December, a high-level defense delegation from India visited Iran. The Indian team also evaluated the proposed development of a transport corridor from India to Afghanistan and Central Asia through Iran and submitted its findings in a report to the Defense Ministry. The Indo-Iranian defense cooperation agreement was signed on January 19 in Tehran by Admiral Madhavendra Singh, Indian Navy chief and chairman of the Chief of Staff Committee, and Rear Admiral Ali Shamkhani, Iranian Minister of Defense and Logistics of the Armed Forces. Under the new agreement, New Dehli will support the construction of warship repair facilities at Iran\'s new port at Chahbahar, station aeronautical engineers of the Indian Air Force and state-owned Hindustan Aeronautics Ltd, Bangalore, at Iranian military bases to maintain and provide mid-life upgrades for Iran\'s MIG-29 fighters. It will send Indian ordnance factory engineers to Iran to refit and maintain T-72 tanks, BMP infantry fighting vehicles, and 105 mm and 130 mm towed artillery guns. Iran will also buy Indian Konkurs anti-tank guided weapons and spare parts. India will also train Iranian troops in India and Iran. In return, India\'s military planners want to be able to quickly deploy troops, armored personnel carriers, tanks, light armored vehicles and surveillance platforms to Iran during crises with Pakistan. According to Indian Defense Ministry spokesman Pradipto Bandopadhyay, \"Defense cooperation with Iran is part of India\'s efforts to boost military exports to the Middle East, and Iran is very important for us in view of the geopolitics of the Middle East.\" Indian defense circles also claim that this new accord gives New Delhi the right to use Iranian military bases in the event of a war with Pakistan, a claim to which an Iranian response has yet to come. According to Professor Sreedhar Rao, a prominent Indian scholar on the region, this alliance is mutually beneficial. \"India will get a credible gateway to Central Asia through a friendly Islamic nation, and Iran will get much needed military assistance from India. Yet the Pakistani Foreign Office dismisses the very idea that Iran could ever provide bases to Indian troops for use against Pakistan. \"We had very fruitful talks with the Iranian President when he was here recently\", \"and this is inconceivable in view of what we discussed\". IMPLICATIONS: This agreement shows that New Delhi has finally found a viable defense partner in the Middle East for which it has been searching for quite some time, and through which India can achieve its rapid mobility defense goals and boost its defense exports. This emerging alliance, however, will have some effects on the Indo-U.S. Strategic partnership, as Washington views Tehran as one of the most dangerous threats to international security, and the U.S. President has included Iran in the Axis of Evil. At the same time, Washington will also view this alliance as factor which will add friction to the tensions between India and Pakistan, the two nuclear-armed states who remain bitterly divided over the disputed region of Kashmir. One senior U.S. State Department official said, \"We\'ll be watching this closely, such an agreement would raise obstacles in our burgeoning defense trade relationship with India.\" Also, Iranian support for the Shiite Lebanese Hezbollah militia and the PLO makes it a leading threat to Israel\'s security. Over the last three years, Israel has become the second largest exporter of weapons to India and India-Israel cooperation continues to grow; Israel is not likely to be pleased with New Delhi\'s closer relations to Tehran. It seems that both New Dehli and Tehran will have to work hard to be able to make this so-called \"strategic alliance\" work. Still, the Pakistani government seems quite confident of its friendship with Iran, as is visible from the Pakistani foreign office\'s reaction: \"This may be what India is seeking but this is not what it will get from Iran against Pakistan\". Yet, Pakistan has to consider the likely implication of such an agreement to its security. Any Indian presence on Iranian military bases, even if it is solely for the purpose of training the Iranians, would allow India a more subtle \"operational\" use of early warning, intelligence gathering, etc facilities against Pakistan:. An Indian military presence in Iran with or without strike capability would enable India in the event of war with Pakistan to create a \"holding threat\" along its western borders. Indeed, Indian leverage with Iran has steadily grown with the souring of ties between Pakistan and Iran. At the same time, it is high time for Islamabad to look into those factors that led to this deterioration in Pakistani-Iranian relations. Iran, which was Pakistan\'s strategic depth in the 1965 and 1971 wars, is now boosting its relations with India and seems prepared to allow India access to its bases with potentially hostile intent towards Pakistan. Ironically, while this situation is the product of Pakistan\'s Afghanistan policy, Iran cannot hope to resolve problems in Afghanistan with India: geographic constraints dictate that it will have to resolve Afghan matters in cooperation with Pakistan. CONCLUSION: The emerging Indo-Iranian strategic alliance, which is being called a milestone in defense ties between the two countries, has the potential to dramatically alter the political landscape in South Asia. At the same time, both India and Tehran will have to face many problems to make this alliance work, at the regional as well as the global level. It will be interesting to see how Israel, one of the most important military partners of India and the U.S., will react to this development. At the moment, it seems that New Delhi wants to separate its regional policy from its policy on global affairs. Although many may disagree, this might be the vital chance for New Delhi to play a significant role in bringing Washington and Tehran close. AUTHOR BIO: Rizwan Zeb is a Research Analyst at the Institute for Regional Studies, Islamabad, Pakistan. The views expressed in the articles are of the author and should not attributed to the Institute for Regional Studies.