The Bilateral ties between India and Iran are set to strengthen further as India’s shipping minister Sarbananda Sonowal is travelling to Iran on the 13th of May to ink a contract with Iran regarding the strategic Chabahar Port. Minister Sonowal will be signing the agreement under which India will manage the Chabahar Port for the next ten years. With the signing of this contract, India will, for the first time, manage an overseas port.
In 2016, during Prime Minister Narendra Modi’s visit to Iran, an agreement for Chabahar was inked. When Iran’s president, Hassan Rouhani, paid a visit to India in 2018, the prospect of expanding India’s role at the port was extensively discussed. Till now, India and Iran have signed one-year extensions for developing and operating the terminal at Chabahar Port. However, India had been pressing for a long-term agreement that would provide security for investment and development plans for the India-designed port.
The new agreement, which will replace the old deal, will be effective for ten years and supposedly will be automatically extended. The original agreement solely covered the Shahid Beheshti terminal at Chabahar Port and was renewed each year. Notably, the Shahid Behesti terminal is being developed in four phases. “On completion of Phase I, the capacity will increase to 8 MTPA (Millions of tonnes per annum). On completion of all 4 phases, port capacity will be 82 million tonnes per year with 32 jetties: 16 multipurpose, 10 containers, 3 each oil and dry bulk,” said IGPL, the Indian company which operates the port.
Chabahar Port and its significance for India and Iran
Chabahar, located near the mouth of the Gulf of Oman, is Iran’s first deep water port. The port positions the country on the international oceanic trade route map. The port is located to the west of Iran’s border with Pakistan, around the same distance as Gwadar, a competitive port designed by China in Pakistan to the east.
India’s engagement in the port’s construction began in 2002, when Hassan Rouhani, then-national Security Advisor of Iran, met with then-Indian NSA Brajesh Mishra.
During President Khatami’s visit to India the next year, he and then Prime Minister Atal Bihari Vajpayee concurred on a strategic partnership road map, with Chabahar as one of the core projects.
Chabahar is strategically important for both Iran and India. It has the potential to aid Tehran avoid the adverse impacts of Western sanctions while also providing New Delhi with an alternative route that avoids Pakistan, which blocks India’s land access for trade with Afghanistan and Central Asia.
India intends to use Chabahar Port as a transit hub along the International North-South Transport Corridor (INSTC) to connect with the Commonwealth of Independent States nations. INSTC will help India to reduce cargo movement between India and Central Asia, with Chabahar Port serving as a regional commercial transit gateway. Notably, INSTC is a 7,200-kilometer multi-mode freight transportation project connecting India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia, and Europe.
The first phase of Shahid Beheshti port was inaugurated in December 2017, and India shipped its first wheat shipment to Afghanistan via Chabahar that year. In 2019, Afghan exports to India passed through the port for the first time bypassing the Pakistani route. Afghanistan transported twenty-three trucks carrying 570 tonnes of dried fruits, textiles, carpets, and minerals from Zaranj in western Afghanistan to Chabahar in Iran.
Interestingly, Chabahar, unlike Bandar Abbas, another key port in Iran, is located beyond the Straits of Hormuz, which adds to its prominence. If for some reason, the Straits of Hormuz are closed, trade and commercial activity at Chabahar will continue uninterrupted.
Chabahar Port to serve as a counterbalance to Pakistan’s Gwadar Port and China’s BRI
China’s Belt and Road Initiative is a global trade and infrastructure plan patterned on the old Silk Road, which links imperial China and the West.
Over the years, despite China’s best efforts, India has refused to support its Belt and Road Initiative (BRI) since the China-Pakistan Economic Corridor (CPEC) violates India’s sovereignty and territorial integrity as it passes through the Pakistan-occupied Kashmir (PoK).
Gwadar Port is, the Arabian Sea’s deep seaport located in the Balochistan province of Pakistan. Since Pakistan has been India’s hostile neighbour, Gwadar Port poses a threat to India’s maritime security and also jeopardises a significant portion of India’s energy and oil imports via the Gulf of Oman. Thus, it is significant for India to come up with either a similar facility or gain control over ports like Chabahar.
In China’s perpetual attempts to expand its influence in South Asia, BRI has emerged as a challenge for India. BRI offers financial incentives and support for infrastructure development in member countries, which can potentially undermine India’s influence in the South Asian region. The BRI presents a multifaceted challenge to India, with geopolitical, economic, and security implications. In such a scenario, increasing hold over Chabahar Port and strengthening ties with Iran would prove to be beneficial for both the countries—Iran and India.
Interestingly, Gwadar was not always part of Pakistan. It was under Oman’s rule for nearly 200 years, until the 1950s before being sold to Pakistan in 1958, Gwadar was offered to India, but the Indian government, led by Prime Minister Jawaharlal Nehru, refused.
The Modi government has been taking several measures to uphold India’s trade interests and security. Recently, the MEA approved IPGL’s bid to take over operations at Myanmar’s Sittwe Port in the Bay of Bengal.
Besides endeavouring to build up its capability as a Net Security Provider, and bolstering partnerships with friendly countries, India is eyeing maritime trade as one of its significant strategies to maintain and expand dominance in South Asia, particularly in the Indo-Pacific region. Notably, 80% of India’s external trade and 90% of its energy trade takes place through the Indian Ocean.
