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What are India’s Stakes in Iran’s Chabahar Port

The recent signing of a 10-year contract between India and Iran for the operation of the Chabahar port marks a significant milestone in India’s strategic and economic ambitions.

 

This agreement involves India Ports Global Ltd (IPGL) and Ports & Maritime Organisation of Iran (PMO), witnessed by Union Minister for Shipping, Ports, and Waterways Sarbananda Sonowal. This blog delves into the history, strategic importance, and future potential of Chabahar port for India.

Origins and Early Development

Modern Chabahar’s development began in the 1970s, with its strategic significance becoming evident during the Iran-Iraq war of the 1980s. The port is situated in Iran’s Sistan-Baluchistan province, providing India with a critical maritime route bypassing Pakistan.

Early Cooperation and Setbacks

In 2002, strategic discussions between Iran’s Hassan Rouhani and India’s National Security Advisor Brajesh Mishra set the stage for Chabahar’s development. The New Delhi Declaration in 2003 between President Khatami of Iran and Prime Minister Atal Bihari Vajpayee of India recognized the port’s potential to connect South Asia with the Persian Gulf, Afghanistan, Central Asia, and Europe. However, the growing Indo-US relationship under President George W. Bush led to delays, as the US pressured India to distance itself from Iran.

Resumption of Efforts Post-2015

The 2015 nuclear deal between Iran and the P-5+1 nations revitalized Chabahar’s development. Afghan President Ashraf Ghani’s visit to India emphasized the port’s importance for Afghanistan’s economic reconstruction. This led to the 2016 Trilateral Agreement between India, Iran, and Afghanistan to establish an International Transport and Transit Corridor.

Investment and Infrastructure

India has committed approximately $120 million for the port’s development and has provided equipment worth $25 million, including six mobile harbor cranes. Since December 24, 2018, IPGL’s subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), has been operating the port.

Operational Achievements

The port has handled over 90,000 TEUs (Twenty-foot Equivalent Units) of container traffic and more than 8.4 million metric tonnes (MMT) of bulk and general cargo. It has been crucial in trans-shipping humanitarian aid to Afghanistan, especially during the Covid-19 pandemic, and combating locust attacks in Iran.

Strategic Agreements and Future Prospects

The recent BRICS Summit meeting between Prime Minister Modi and President Ebrahim Raisi underscored the importance of finalizing the long-term contract. This strategic direction aims to fully operationalize Chabahar, linking it with the International North-South Transport Corridor (INSTC) for enhanced connectivity to Central Asia and beyond.

INSTC Overview

The INSTC is a multi-modal transportation network initiated by Russia, India, and Iran, designed to connect the Indian Ocean and Persian Gulf to the Caspian Sea, and onward to northern Europe via St. Petersburg in Russia.

Complementarity with Chabahar

Chabahar port is envisioned to be a pivotal node in the INSTC, facilitating the movement of goods from Mumbai to Europe. This route includes sea, road, and rail components, enhancing India’s connectivity with Eurasia. However, the geopolitical instability caused by the Ukraine conflict poses challenges to the INSTC’s future.

Key Investments and Operational Data

InvestmentAmount
Port Development$120 million
Equipment Supplied$25 million
Humanitarian Aid Trans-shipped2.5 million tonnes of wheat, 2,000 tonnes of pulses, 40,000 litres of pesticide (malathion)

Cargo Handled (2018-2023)

CategoryVolume
Container Traffic (TEUs)>90,000
Bulk and General Cargo (MMT)>8.4 million

Summary Points

  • Strategic Location: Chabahar is Iran’s closest port to India, providing secure and efficient access for large cargo ships.
  • Historical Context: Initial cooperation in the early 2000s faced setbacks due to geopolitical dynamics.
  • Renewed Efforts: Post-2015 nuclear deal developments led to renewed focus on Chabahar.
  • Operational Success: Significant investment and operational achievements since 2018.
  • Future Prospects: Integration with INSTC to enhance connectivity to Central Asia and Europe.

Q1: Why is Chabahar port strategically important for India? A1: Chabahar port provides India with a direct maritime route to Afghanistan and Central Asia, bypassing Pakistan. It is crucial for India’s trade and strategic interests in the region.

Q2: What is the INSTC, and how does Chabahar fit into it? A2: The INSTC is a multi-modal transport network linking India to Europe via Iran and Russia. Chabahar port is a key node in this corridor, facilitating seamless cargo movement from India to Europe.

Q3: How has India invested in Chabahar port? A3: India has invested around $120 million in port development and supplied $25 million worth of equipment. It operates the port through IPGCFZ and has been active since 2018.

Q4: What are the recent achievements of Chabahar port? A4: The port has handled significant cargo traffic, facilitated humanitarian aid to Afghanistan, and helped combat locust attacks in Iran.

Q5: What challenges does Chabahar port face? A5: Geopolitical tensions, particularly involving Iran and the US, and the instability caused by the Ukraine conflict pose significant challenges to the port’s future and its integration with the INSTC.

Chabahar port stands as a testament to India’s strategic foresight and economic ambition, promising enhanced regional connectivity and strengthened geopolitical ties.


June 2024
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