India’s Stakes In The Chabahar Port

INDIA’S STAKES IN THE CHABAHAR PORT

India and Iran signed a 10-year contract on Monday for the operation of a terminal at the strategically important Chabahar port in Iran.

Chabahar is a deep water port in Iran’s Sistan-Baluchistan province. It is the Iranian port that is the closest to India, and is located in the open sea, providing easy and secure access for large cargo ships.

Union Minister for Shipping, Ports and Waterways Sarbananda Sonowal witnessed the signing of the contract between India Ports Global Ltd (IPGL) and Ports & Maritime Organisation of Iran (PMO) in Tehran.

THE FINANCES INVOLVED

IPGL will invest approximately $120 million to equip and operate the port for the duration of the contract, and the two sides will further extend their cooperation in Chabahar thereafter.

India has also offered a credit window in rupees equivalent to $250 million for mutually identified projects to improve infrastructure related to the port.

ABOUT CHABAHAR PORT

• It is a seaport in the Sistan-Baluchistan province of Iran, on the Gulf of Oman, at the mouth of the Strait of Hormuz.
• Chabahar is a deep-water port with direct access to the Indian Ocean that is outside the Hormuz Strait.
• It consists of two separate ports called Shahid Beheshti and Shahid Kalantari.

THE TIMELINE

• Modern Chabahar came into being in the 1970s, and Tehran realised the strategic importance of the port during the Iran-Iraq war of the 1980s.
• In 2002, Hassan Rouhani, who was Iran’s National Security Advisor under President Syed Mohammad Khatami at the time, held discussions with his Indian counterpart Brajesh Mishra on developing the port, located 72 km west of Pakistan’s Gwadar port.
• In January 2003, President Khatami and then Prime Minister Atal Bihari Vajpayee signed off on an ambitious roadmap of strategic cooperation. Among the key projects the two countries agreed on was Chabahar, which held the potential to link South Asia with the Persian Gulf, Afghanistan, Central Asia, and Europe.
• He New Delhi Declaration signed by the two leaders recognised that the countries’ “growing strategic convergence needed to be underpinned with a strong economic relationship”.
  • For India, Chabahar held immense strategic and economic significance:
    • It provided a route to reach Afghanistan, land access to which had been blocked by a hostile Pakistan.
    • Access to resource rich Central Asia.
    • Encircling Pakistan.

THE ROADBLOCK:

But the ambitious timelines for the project were undone by India’s growing relationship with the United States under President George W Bush. The US, which declared Iran as one of the “axis of evil” along with Iraq and North Korea, pushed New Delhi to abandon its strategic relationship with Tehran, and the Chabahar project became a casualty.

POST 2015 DEVELOPMENTS

While India spent about $100 million to construct a 218-km road from Delaram (in western Afghanistan) to Zaranj on the Iran-Afghan border to link with Chabahar, the port project itself progressed at a glacial pace.

But things started to change in 2015 after talks between Iran and the P5+1 bore fruit.

THE AFGHAN PRESIDENT IN INDIA

During Ghani’s April 27-29, 2015 visit, he and Prime Minister Narendra Modi agreed to work closely with Iran to make the port project a reality, and to develop it as a viable gateway to Afghanistan and Central Asia.

They agreed that routes additional to the existing ones will provide a major impetus to Afghanistan’s economic reconstruction efforts.

2016: India, Afghanistan & Iran signed a Trilateral Agreement to establish the International Transport and Transit Corridor for developing the Chabahar Port Terminal.

HOW THE US WAS MANAGED NOW?

The attitude of the Donald Trump administration towards Iran complicated matters after 2017, but India appeared determined to stay the course.

India managed to get a waiver from the US for the Chabahar project, citing access to Afghanistan as a reason.

India’s approach also stemmed from the fact that China was aggressively pursuing President Xi Jinping’s ambitious Belt and Road Initiative for massive infrastructure development across large parts of Asia and Africa.

THE CHABAHAR PORT OF TODAY (ACCOMPLISHMENTS)

• India has so far supplied six mobile harbour cranes (two of 140-tonne and four of 100-tonne capacity) and other equipment worth $25 million.
• IPGL has been operating Chabahar port through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), since December 24, 2018.
• The port has handled more than 90,000 twenty-foot-equivalent units (TEUs) of container traffic and more than 8.4 million metric tonnes (MMT) of bulk and general cargo since then.
• The port has also facilitated the supply of humanitarian assistance, especially during the Covid-19 pandemic.
• Till date, a total of 2.5 million tonnes of wheat and 2,000 tonnes of pulses have been trans-shipped from India to Afghanistan through Chabahar port.
• In 2021, India supplied 40,000 litres of the environment friendly pesticide (malathion) through the port to Iran to fight locust attacks.

THE FUTURE PROSPECT

With the operationalisation of the long-term investment, Chabahar could potentially become an important hub to connect India with the landlocked countries of Central Asia and Afghanistan. However, to better realise its commercial and strategic potential, the development of the port must be integrated with the larger connectivity project of the International North South Transport Corridor (INSTC).

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