Post US invasion of Afghanistan and with the emerging significance of both Afghanistan to India’s internal security and India to Afghanistan’s development, the two countries started their quest to find-out a cheaper and viable route to connect the two. A traditional land route exists across Pakistan, but in their effort to sabotage India’s position in the region Pakistan had closed the route years before. The alternative to this was found in the form of the port city of Chabahar in Iran. Chabahar is a strategic town in Iran. It is Iran’s only deep sea port having a capacity of berthing of ships with 2,50,000 tons of displacement as against 1,00,000 tons in case of Bandar-e-Abbas, which Iran has developed with the help of Russia. Till date in the absence of the capacity to handle 2,50,000 tons of ships, which is the international standard, Iran had to trans-ship the goods from Dubai. Given, Iran also had its vested interest in developing this port. Resultant, back in 2003, immediately after installation of the new government in Afghanistan headed by H.E. Hamid Karzai, India signed the tripartite agreement for preferential trade with Afghanistan and Iran, which would pass through Chabahar port and Special Economic Zone and to jointly develop the Port of Chabahar with Iran. In 2013 India further made a commitment to invest $100 million in the development of the project and created a special purpose vehicle, India Ports Global Pvt. Ltd. (IPGPL) to handle the project. The IPGPL, in turn would invest $500 million in building two terminals and five multi-cargo berths in Port Shahid Beheshti of Chabahar, Iran.
By the time, in early 2000s only, some dissident groups in Iran revealed information about cladestine nuclear activities inside Iran, resulting a new procedure by IAEA to be initiated in 2003, following which, sanctions were imposed on the country in 2006 by United Nations Security Council. This came as a rude shock in the process of developing the Chabahar Port city by India. However, post 2015, after the signing of the Iranian nuclear deal between Iran and P5+1 (United States of America, United Kingdom, Russia, France, China and Germany) ways for further development were opened up leading to renewed vigour and the three parties (viz. India, Iran and Afghanistan) signing the second agreement in 2016 during the visit by the Indian Prime Minister to the region.
While all this was going on, India on its part was engaged in building a number of connectivity projects. The $135 million Zaranj-Delaram Highway, connecting the Iranian border in Nimruz Province of Afghanistan with the 2000 KM long Garland Highway of Afghanistan connecting four major cities of the country, viz. Herat, Kandahar, Kabul and Mazar-e-Sharif. On the other hand Chabahar got connected to the border towns of Zahedan & Milak by Iran. Simultaneously India initiated its Chabahar – Hajigak railway linking project, a part of which, namely Chabahar- Zahedan, is already under construction. Efforts are on to connect Afghanistan and the Central Asian Republics with Azerbaijan, Armenia and Russia via International North South Transit Corridor. This way the economic and geo-strategic significance of Chabahar gets boosted up.
However, a question arises, ‘Why so much effort and investment by India to create physical infrastructures in Iran and Afghanistan?’
The answer to this question lies in growing economic profile of India. With the growth witnessed in the economy of the country (India has already become the 2nd largest Economy in BRICS and is slated to be the 5th largest economy in the near future and already is the 3rd largest economy in Purchasing-Power-Parity), the need was realized in identifying newer sources both for raw material and market. However, given its colonial history, India on principle adopted a stand of being partners in development with others countries and not just a mercantilist, trying to find out win-win strategies while engaging with any partner.
Post removal of Taliban from power in Afghanistan and installation of a friendly government, India has been looking for avenues to consolidate its development engagement in Afghanistan, which is visible in its involvement in the development of Hajigak and Herat Special Economic Zones in Afghanistan. Afghanistan, at the same time was trying to promote its centrality in connecting Central Asia.
Sistan-Balochistan Province on the other hand is the most deprived province of Iran, where inspite of the geographic advantage, hardly any development had taken place. Hence Iran was also looking for avenues to promote development of the region. Additionally,came the capacity of the port infrastructure in Iran, where it was continuously feeling the necessity to upgrade its capacity.
It was in this backdrop, that India got involved in developing the Chabahar Port City of Iran. However, we must admit, it is not only the Port City but also the Special Economic Zone (SEZ) that is getting developed in the area keeping Chabahar port in the center, is where India is investing. Let us now look into the significance of the port from India’s point of view.
Significance to India
The port entails number of advantages for India, these are:
Connectivity to Afghanistan by-passing Pakistan
Well this is one point about which all of us are aware of. The traditional connecting route of Indian sub-continent with Afghanistan passes through Khyber Pass. However, it has been an official policy of the Pakistani government to disrupt this connectivity even if it means a loss of revenue for themselves. Yes, true. It is customary for any two parties to pay a third party royalty for using their land-route for trade. Pakistan could have earned good revenue only by allowing this trade between India and Afghanistan but it wouldn’t. This attitude of the Pakistani Government has been displayed number of times. Latest being in December 2014, when just to deny the possibility of trade between India Afghanistan they declined to be a party in the SAARC Motor Vehicles Agreement (SAARC-MVA), which made the Indian Prime Minister to come out with a statement where he stated that the relationship between the neighbouring countries would grow, whether inside SAARC or outside it, whether with all of them or with some of them.
In addition to this attitude of the Pakistani government, it is also the policies of the government, especially from 1980s in harbouring and promoting terrorist elements in their soil which has made the land one of the most unsafe for trade and commerce to grow or happen across the territory.
Given these points India had previously declined the offer to go ahead with Iran-Pakistan-India (IPI) pipeline and is now very reluctant about Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipelines, in-spite of their enormous potentiality. Hence both the countries needed an alternative to by-pass Pakistan, which this ports provides them. In fact one must admit that, it was because of this denial of access the trade between India and Afghanistan was not growing to its potential.
Connectivity to Central Asia
The Central Asian republics, provide India a wonderful opportunity to business and grow together, for e.g., Kazakhstan has one of the largest potential uranium reserves and is also one of the strongest economies of the region having a good middle class and consumer base. After Russia they are one of the strongest economic players among the former soviet block countries. On the other hand Turkmenistan has got huge hydro-carbon reserves. All of these economies starting from Turkmenistan to Uzbekistan to Tajikistan to Kyrgyzstan are showing signs of growth with the political conditions in these countries stabilizing. They are also vastly endowed with natural resources starting from iron ore to coal, providing India an opportunity to engage with them for the growing need of these resources in India and potentiality of these markets. However, as has been the traditional Indian approach, India even on this occasion do not want to develop a buyer-seller or mercantilist relationship rather wants to be a partner in their development. Hence India has been looking at every possible opportunity to establish physical connectivity with the region.
Chabahar and the connectivity initiatives developing by keeping Chabahar at the center, especially the International North South Transit Corridor can ensure that.
A fillip to International North South Corridor
International North South Corridor is a multi-modal transit system developed to connect India, Iran, Afghanistan, Central Asia, Azerbaijan, Armenia, Russia and Turkey. Chabahar can prove to be the central point for this initiative, especially in connecting India, Iran, Aghanistan and Central Asian Republics.
Boosting partnership between India and Iran
Successful completion of Chabahar port can ensure boost in economic relationship between India and Iran. Already Iran has become the 2nd largest source of petroleum resources for India. According to the agreements signed during the visit by Indian Prime Minister to Tehran India promised a $20 billion investment by its public & private sector in Iran especially in Chabahar SEZ. The Indian Petroleum minister too had visited the country with a delegation of business heads to the country for this purpose. India is looking to develop ‘cross-border SEZ’ in Iran, especially for import in India, which would entail increase in commerce in Iran and would also ensure development of one of the most backward regions of Iran, namely Sistan-Balochistan province, along with creating job opportunities in that country. However, this would also provide an assured supply line to the manufacturing industries in India.
Viability of SAGE pipeline
South Asia Gas Enterprise (SAGE) pipeline connecting Iranian oil fields especially Farzad B along with a supply line from Oman with Indian port city of Kandla, Gujarat, with an extended pipeline to Mumbai, where the pipeline would be laid across the bed of Arabian Sea is the most viable option for both ensuring regular supply of oil from the region to India at a cheaper cost and also devoid of any fear of halt in operation because of any government policy in Pakistan or terrorist activity against that pipeline. The nodal point in the Iranian side is Chabahar, and with that port becoming operational and Iran offering India to operate the Phase I of developing the port facility it is expected to proceed as planned.
However, one bottle neck still remains for this pipeline. The two pipelines from Iran and Oman were suppose to meet at a ridge in the Omany territory called Qualhat Seamount or Murray Ridge located at a distance of 300Kms or 167 miles away from Oman coast. In 2015, United Nations Convention on Law of Seas (UNCLOS) gave an additional 150 nautical miles to Pakistan over and above its 200 nautical miles, as a result technically this area came under Pakistan. However, the issue has been raised by Oman in diplomatic levels and is expected to get settled very soon.
Geo-strategic significance of Chabahar
Chabahar is located only 70 Km away from Gwadar on land however, it is more close to the international shipping lane than Gwadar, thus providing a better alternative to the ships plying in the region since this closer distance would mean lesser fuel consumption on occasion of a port call by the ships. Additionally, it is also closer to Afghanistan and Central Asia, providing easier connectivity to the region. It is also the only deep-sea port of Iran. The resultant option created by Chabahar, as against China-Pakistan-Economic-Corridor (CPEC), is more economically viable.
It also provides India a foot-hold in the western Arabian Sea region, which India has been looking for till date.
With all of these additional advantages, Chabahar is slated to be a game-changer in India’s approach to the region, especially in its effort to connect Afghanistan and Central Asia.