According to the Economic Times, India’s Shipping Minister Sarbananda Sonowal is set to sign a 10-year agreement today to operate the Chabahar Port in southeastern Iran.
This marks the first occasion India will manage a foreign port.
This strategic move is significant as it could position Chabahar Port as India’s response to Pakistan’s Gwadar Port and China’s expansive Belt and Road Initiative.
What is the Chabahar Port Agreement?
The Chabahar Port, situated in the Sistan-Balochistan province of Iran, plays a vital role in connecting India with Afghanistan, Central Asia, and beyond to Eurasia.
As reported by The Times of India, this port is integral to India’s strategic interests.
According to First Post media, India aims to develop Chabahar into a central node for the International North South Transport Corridor (INSTC), which is a 7,200-kilometer multi-modal transport network.
This corridor facilitates the movement of goods between India, Iran, Russia, and several other countries across Europe and Central Asia.
The INSTC has become more critical due to the ongoing conflict in Ukraine, prompting New Delhi to actively promote both the transport corridor and the Chabahar Port to enhance regional ties.
Business Standard notes that discussions between India and Iran about the port began back in 2003, but it wasn’t until 2013 that India committed $100 million to the port’s development.
A significant advancement occurred in 2016 during Prime Minister Narendra Modi’s visit to Iran, where India pledged an additional $85 million to develop the Shahid Beheshti terminal at the port.
In 2018, the then Iranian President Hassan Rouhani discussed plans to expand India’s role at the port.
According to Business Standard, India and Iran have regularly addressed the port during their high-level meetings.
Why is the Port Significant?
Due to its strategic position at the Gulf of Oman near the entrance of the Strait of Hormuz.
The Diplomat reports that Chabahar Port is Iran’s sole deep-sea port with direct ocean access.
Interestingly, the Chabahar Port is not subject to US sanctions, making it an appealing option for India and other countries.
According to The Times of India, Central Asian countries like Kazakhstan and Uzbekistan have expressed interest in using Chabahar Port to access the Indian Ocean Region and enter the Indian market.
It will also provide Indian traders and investors with access to Central Asia.
The Peninsula.org highlighted that the Chabahar Port enables India to reduce the delivery time of goods to Central Asia by one-third.
India Today reports that the Chabahar Port will enhance India’s imports of iron ore, sugar, and rice.
Additionally, it provides road access to four Afghan cities: Herat, Kandahar, Kabul, and Mazar-e-Sharif.
First Post Media suggests that this improved connectivity with Afghanistan could lead to enhanced diplomatic relations.
The port is also a strategic launching point for humanitarian efforts.
This comes at a critical time, as tensions in West Asia escalate significantly.
The conflict between Hamas and Israel has disrupted major trade routes and highlighted the urgent need for improved regional connectivity.
Balancing Influence: Responding to Pakistan and China?
Perhaps the port’s most significant role is acting as India’s response to Pakistan’s Gwadar Port and China’s Belt and Road Initiative.
According to India Today, the port enables India to bypass Pakistan and directly transport goods to Afghanistan.
The simplest routes for India to reach Central Asia and Russia pass through Pakistan and Afghanistan. Iran, bordering Central Asia and the Caspian Sea, offers the next best alternative. While India was pursuing access to Afghanistan, it was also exploring the International North-South Transport Corridor (INSTC), which would provide a pathway to Russia and Europe. This insight was shared by Raja Mohan, as quoted by Indian Express and further reported by First Post media.
According to The Diplomat, India faces significant challenges in setting up land-based trade routes with western countries because these routes typically pass through Pakistan, India’s archrival. Developing a maritime trade route through Chabahar Port would enable India to avoid Pakistan and create trade links with Western and Central Asia.
The importance of the port for India escalated after China incorporated Gwadar Port into its Belt and Road Initiative (BRI).
Moreover, the port could be strategically beneficial for India, especially if China positions its naval vessels in Gwadar Port, which is just 400 kilometers (Gwadar Port to Chabahar Port) away by road and 100 kilometers by sea.
An article from Peninsula.org highlighted that Chabahar Port is crucial for India as it seeks to counter China’s efforts to extend its influence in the Indian Ocean.
The development of ports in the region illustrates the ongoing competition for regional dominance between India and China.
The Diplomat highlighted that stronger ties between New Delhi and Tehran could serve as a balance to the close relationship between China and Pakistan, often described as an ‘all-weather friendship.’
India’s engagement with Chabahar Port is a strategic move to enhance its superpower status, expand its regional market influence, and use its alliance with Iran as a counterbalance to China and the cooperation between China and Pakistan, according to the article.
India and Iran Have the Potential to Overcome Challenges
India’s progress on Chabahar Port might face challenges due to worsening US-Iran relations, particularly if Donald Trump returns to the presidency. However, there are still opportunities available.
According to Ali Omidi and Gauri Noolkar-Oak from the University of Isfahan, as cited by Indian Express in their study on the geopolitics of Chabahar Port, the project faces several challenges such as the risk of U.S. sanctions, instability in Afghanistan, and conflicts with China’s Belt and Road Initiative. Despite these obstacles, they believe that with proactive, forward-looking diplomacy and effective management, Iran and India can navigate these issues to keep Chabahar Port as a functioning and strategic transit hub.
In February, Ambassador Iraj Elahi of Iran highlighted the port’s progress as an important link between countries in the Indian Ocean region and Central Asia. This development serves as a significant example of the engagement and cooperation between India and Iran.
Elahi emphasized the significance of the collaboration between the two nations in advancing the development of Chabahar Port, which serves as a crucial link connecting regions along the Indian Ocean with Central Asia and the Caucasus. Additionally, he highlighted the importance of their joint efforts in the INSTC as key instances of their expanding cooperation.
(Views expressed in the article are of authors own and do not reflect the editorial stance of Business Upturn)
