New Delhi's intensified interest in the Iranian port of Chabahar has the potential to counter China’s massive Belt and Road Initiative (BRI) infrastructure project, particularly in Pakistan, reported Asian Lite International.
The Chabahar port in southeastern Iran establishes a new entrance from the warm waters of the Oman Sea leading to the Indian Ocean and the landlocked countries of Afghanistan and Central Asia, and can fuel regional trade and growth.
India had also been worried about Chinese collaboration with Pakistan through the development of Gwadar port and the China-Pakistan Economic Corridor(CPEC).
Therefore, India’s involvement with Chabahar port is a critical strategy to bolster its influence by enhancing its regional market presence and leveraging an Indo-Iranian alliance to buffer China and Sino-Pakistani cooperation, reported Asian Lite International.
In early December, the Taliban authorities in Afghanistan publicly backed the use of Chabahar port in Iran. India has been developing the Shahid Beheshti Port in Chabahar port since 2016 when India committed to investing USD 500 million, it may further strengthen Indo-Iran ties and counter the growing Sino-Pakistani cooperation.
In recent years, India has embraced an ambitious and expansive vision for foreign trade in the Central Asian region. However, India’s trade with Afghanistan and Central Asia has long been hindered by an inability to access land routes through Pakistan.
The development of Iran’s new port at Chabahar has transformed India’s trading prospects by allowing India a trade route bypassing Pakistan altogether.
Alongside the Chabahar Port’s development, many investments have been made in projects intended to develop physical connectivity in the Central Asian region, reported Asian Lite International.
Several distinctive advantages make the port attractive from domestic and international perspectives. It is the only deep sea port in Iran with direct access to an ocean.
Its proximity to Afghanistan, Pakistan and India, and its position as a key transit point on the growing International North-South Transport Corridor(INSTC) equip it with the potential to emerge as a major commercial hub in the region.
Moreover, Chabahar is among the few places in Iran free from US sanctions, simplifying trade with other countries, reported Asian Lite International.
The port carries great diplomatic and commercial significance for India. A sea trade route to Western and Central Asia via Chabahar allows India to bypass Pakistan and establish hassle-free trade networks. Moreover, compared to Bandar Abbas, the other main port in Iran, it is closer to Mumbai.
The Chabahar route is expected to result in a 60 per cent reduction in shipment costs and a 50 per cent reduction in shipment time from India to Central Asia.
Indo-Iranian collaboration on Chabahar began in 2003, though it gathered momentum in 2016 when Indian Prime Minister Narendra Modi and President Hassan Rouhani unveiled India’s plan to invest USD 500 million in developing the Chabahar port.
Iran and India also signed an MoU to lay a 628 km railway line from Chabahar port to Zahedan (the capital of Sistan-Balochistan province) at an estimated cost of USD 1.6 billion. Zahedan city is close to the Afghanistan border. The rail line was expected to ease the transport of goods from India.
China, too, has shown interest in Chabahar to access energy and mineral resource reserves and Eurasian trade routes. Given that China already virtually controls the Gwadar port in Pakistan, its interest in Chabahar raised the spectre of India losing access to Afghanistan and Central Asia altogether, reported Asian Lite International.
In 2020, India, Iran and Uzbekistan set up a trilateral working group to coordinate joint use of the Chabahar Port and work on various connectivity projects in the region.
Recent reports noted that India and Iran are close to striking a long-term agreement for operations at the Chabahar Port. The long-term deal, valid for ten years and to be extended automatically, will supersede an earlier pact that provided for the renewal of India’s operations at the Shahid Beheshti terminal in Chabahar Port on an annual basis.