Chabahar Port Agreement: A foreign policy master-stroke?

Co-authored by Roshani & Pearl                                                                                                   Image: Lijumol Joseph/The Quint

Chabahar Port Agreement: A foreign policy master-stroke?

India seems to be making in-roads into Central Asia by signing her historic deal to develop the strategic port of Chabahar in Iran and agreeing on a three-nation pact to build a transport-and-trade corridor through Afghanistan. India, Afghanistan and Iran decided in 2016 to establish the trade route, which would allow Indian goods to reach Central Asia. In February 2018, Iranian President Hassan Rouhani paid an official visit to India where Indian and Iranian governments inked nine agreements including the operational control of the parts of Chabahar Port to India for 18 months.

Chabahar port, developed by Indian assistance, is located on the Gulf of Oman along the Makran coast in south-eastern Iran. The port of Chabahar is 800 kms closer to Afghanistan than the port of Karachi. Due to the proximity with Central Asian countries of Turkmenistan and Uzbekistan, it is the ‘Golden Gate’ to these countries.

There have been concerns over the trade route as the projects land route that passes through Afghanistan is prone to security hazards and is extremely volatile. The route provides an easy way for international crime syndicates, unscrupulous traders and non-state actors to distribute their wares, or to provide belligerents with highly sophisticated weapons. While the entire coast of India is vulnerable to clandestine landings of contraband, the Gujarat-Maharashtra coastline and the Tamil Nadu coast are most vulnerable. There are also environmental concerns with regard to the project as the overexploitation of ocean resources are threatening the interests and futures of all the region's countries and people. The concerns include the possibility of increase in the likelihood of flooding, resulting in loss of life and damage to property.

However, the Chabahar port will serve as the Indian Ocean outlet for New Delhi’s grand International North- South Transit Corridor (INSTC) initiative, this will reduce Indian trade costs by 30% and transport time by 50%. Central Asia’s substantial natural resources shall also become easily accessible to India. Many Indian industries will stand to benefit from this route and it will also ensure energy security for India. This route will also help India play a greater role in the reconstruction of Afghanistan thereby increasing her sphere of influence in Asia. This greater access is likely help India compete with China not only economically, but also politically, tipping the power scale in the region.

The development of Chabahar thus seems like a win-win-win proposition, if the project and its associated overland infrastructure receive the necessary investments and political backing. The Chabahar port development has important implications for economic growth and development of South and Central Asia, particularly the two giant markets of India and Iran. The future of the Chabahar port—as well as the plethora of competing and complementary port, road and rail projects—will also dramatically affect the business operating environment in South and Central Asia by potentially redrawing supply chain routes throughout the region and beyond. New Delhi’s approach to Chabahar is based on a Central Asia-plus-South Asia concept, which constitutes the core of New Delhi’s Connect Central Asia policy. India’s approach of reactivating INSTC is another illustration of how India wants to connect with the region physically. Connectivity, energy exploration, sharing security concerns on terrorism, and establishing political presence are some of the factors that shape India’s Central Asia policy.

About the Author

Roshani & Pearl are members of the Information Services team at MitKat Advisory Services. 

Disclaimer: Any views or opinions represented in this blog are of the author and do not represent those of MitKat. Any views or opinions are not intended to malign any country, religion, ethnic group, club, organization, company, or individual.

Published On - Jul 9,2018


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