Operationalisation Of Chabahar Port: A Feather In India-Iran-Afghanistan Trilateral Relations

The Trilateral Agreement between India, Iran and Afghanistan on Establishment of International Transport and Transit Corridor, popularly known as the Chabahar Agreement, was an outcome of rounds of hectic parleys. India Ports Global Limited, formally took over operations of the commercially important Chabahar port, located in the Sistan-Balochistan province of Iran, recently. It is the first port abroad which has been developed by India with investments in excess of US$ 500 million.

The Indian angle in the port has raised many eyebrows, as pundits tend to draw comparisons with the Gwadar port in Pakistan, where China has major economic and strategic interests. However, from India’s perspective, and also from Iranian and Afghan points of view, operation of the port is primarily driven by commercial and economic interests. The Chabahar Agreement has factored in expectations of all three countries and is expected to give a boost to trade and commerce, apart from giving a fillip to regional integration and connectivity.

The benefits of operationalisation of the Chabahar port are manifold. First and foremost, India’s connectivity links with Afghanistan would get strengthened as Chabahar acts as the transit gateway port for goods to move into and out of Afghanistan through Iranian territory. A shipment of wheat, destined to Afghanistan was sent by India through the Chabahar port in 2017, thereby establishing the commercial viability of the port. A significant push-factor for expediting the Chabahar Agreement was the failed and frustrated attempts, by both India and Afghanistan, to nudge Pakistan to allow the use its territory for movement of transit cargo.

The operationalisation of the Chabahar port would also provide a direct and more reliable sea-road access into large swathes of Iranian territory as well as the Central Asian Republics. The savings in terms of shipment costs and time would be phenomenal. It is noteworthy that India and Iran are part of a group of countries actively negotiating the International North South Transport Corridor (INSTC) transport and transit Agreement. Both India and Iran have reiterated their commitment to include Chabahar within the INSTC framework. The future trade routes would possibly envisage movement of cargo from ports on India’s western flank like Nhava-Sheva and Kandla to Chabahar and transportation thereof by road to countries like Azerbaijan and Tajikistan. Chabahar is the only direct oceanic port of Iran, and thus its location on the Arabian Sea insulates it from the geo-strategic unrests witnessed in the Persian Gulf and Straits of Hormuz.

To ensure that the port actually gains an economic momentum, India and Iran have planned investments to further regional development and connectivity initiatives. Apart from massive investments to build the port and container terminals, India has already contributed by investing heavily in construction of the Zaranj-Delaram road in Afghanistan. Further, Indian investments in construction of the Chabahar-Zahedan railway route and the Chabahar Special Economic Zone shall not only add to the viability of the port, but also spur economic growth in Afghanistan and Iran.

Tehran has welcomed the Indian investments in setting up plants in sectors such as fertilizers, petrochemicals and metallurgy in the SEZ and is satisfied that local partners in the port operations and transfer of shipping sector related technology shall bolster its economic growth. The use of Chabahar port shall be economically more viable for Afghanistan when compared to its access via the Karachi or the Bandar Abbas (in Iran) ports. The three countries are also negotiating protocols to harmonise transit, roads, customs and consular matters for making the port attractive and decrease logistics costs.

A slew of initiatives have ensured that the future of the port would be bright. As Indian Prime Minister Modi said, operationalisation of the port shall lay a corridor of peace and prosperity and alter the course of the history of the region.

Script: Satyajit Mohanty, IRS, Senior Economic Commentator