News ID: 175910
Published: 0553 GMT January 17, 2017

Why India must move fast on Chabahar Port

Why India must move fast on Chabahar Port

Chabahar, a port city along the shores of Oman Sea in Iran's Sistan-Baluchestan Province, has a strategic location and India is promising to invest $20 billion in developing the port and other industries in its sprawling free zone.

Chabahar allows India to side-step Pakistan, which blocks its access to Afghanistan and Central Asia. Translated as 'four springs', Chabahar is the entry point to the Indian subcontinent. Pakistan's Gwadar port, in which the Chinese are investing $46 billion, is barely 72km away.

India is committed to the timelines agreed upon when India, Iran and Afghanistan signed a trilateral agreement in May 2016.

Afghanistan has been given another option to trade with India as Kabul found the trade transit treaty with Pakistan humiliating.

The Chabahar port authorities say dredging will be complete soon and they will be ready to receive Indian cargo ships within a month.

At least now, in the minds of Iranians, there is a complete identification of Chabahar with India.




Gateway to Central Asia


On their part, Indians are cognizant of its strategic location and its potential for opening a route to Afghanistan and Central Asia. There have been two significant trips where the port has figured in discussions on investment and connectivity. During Prime Minister Narendra Modi's trip to Tokyo last November, his Japanese counterpart, Shinzo Abe, agreed to help India with the Chabahar project.

Both leaders directed their aides to hammer out a plan to fast-track the project. India wants Japanese investment and help in building the railway track between the port city and Zahedan. Both India and Japan see strategic convergence in Chabahar as it allows the landlocked countries of Central Asia to find a route away from ports that enjoy Chinese domination such as Gwadar.

The presidents of Kyrgyzstan and Turkmenistan, during their visits to Delhi, were also promised access to this warm water port. From all standpoints, the Iranian port, located in the Oman Sea away from the turbulence of the Persian Gulf region, has the potential to reorder old routes into new ties.

According to the managing director of the Chabahar Free Zone, Abdol Rahim Kordi, the port provides the best entry point connecting three continents: Asia, Europe and Africa. India has been in talks with Iran since 2003 about developing the port but, due to Western sanctions and ambivalence at the top, the progress has been slow.

In the last three years, however, the development of Chabahar has picked up. Whereas, in the last 20 years, there were 1,800 companies registered in Chabahar, in just three years the figure has shot up by 60 percent.

Similarly, there has been a spike in investment. Kordi says that this change has been 'happening daily'. There have been many queries from Indian companies from the steel, petrochemical and fertilizer sectors, but Indian businessmen are still exploring whether this would be the right time to invest as issues pertaining to financing remain tricky since the European banks have not eased up despite the signing of the P5+1 nuclear deal.

Some officials in India's External Affairs Ministry feel that sloth in executing its part of the project could be a strategic mistake.

Iran has been dropping hints that it would explore investment from other countries, including China, which has made a gargantuan investment of $46 billion in the China-Pakistan Economic Corridor that originates from Gwadar.

Iran had earlier staved off pressure from Beijing to invest in Chabahar as it wanted India to be present for strategic reasons. China has suggested a railway line between Gwadar and Chabahar.

India will have to move swiftly to grab the opportunity that Iran is offering to not just explore the land route to Central Asia, but also connect with the trans-shipment road corridors that Iran is building to reach out to Europe. The International North-South Corridor is one of them.




Chabahar versus Gwadar


Chabahar in many ways is better than Gwadar. It is a deep water port that is connected to land and the mainland, which does not really involve charges for loading and unloading. It has two wharfs, Shahid Kalantari with a capability of 25,000 ton bunker and Shahid Beheshti with 40,000 bunkers to moor.

It has access to human resources trained at Chabahar Maritime University with the necessary skills to run a world-class port. It has access to international waterways in the Indian Ocean and has moderate climate.

Chabahar Free Zone officials are quick to point out to companies that they are away from the crisis area of the Persian Gulf and their investment will remain safe.

During the Iran-Iraq war, the Iranian government had used this port to locate much of its maritime resources. To reiterate, it is the best route to transfer goods to Afghanistan. It has off-coast facilities that are linked to the provinces of Sistan-Baluchistan, Kerman and the Khorasans.

Besides, due to its geographical location and its proximity to neighboring countries (the Indian port of Mundra is 900-odd km away) which have great markets and political stability, Chabahar free zone has enormous potential to host large industries through joint foreign and domestic investments.


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