Chabahar port remains crucial for India but hostage to Indo-Iran relations

July 15, 2020 1:42 PM

The total length of the railway line is 628 km out of which Iran is hopeful of completing 150 km by March 2021 and the balance within the next one year, a tall order indeed.

Chabahar port, Indo-Iran relations, Chabahar-Zahedanrailway network , offMakran coast, indian ocean, Persian Gulf,INSTC, latest news on Indo-Iran relationsThe progress on the development of Chabahar and Indian commitment to the project has been slow and tardy.


Iran commenced track-laying operations on Chabahar-Zahedanrailway network on 07 July inaugurated by its Transport and Urban Development Minister Mohammad Eslami. The total length of the railway line is 628 km out of which Iran is hopeful of completing 150 km by March 2021 and the balance within the next one year, a tall order indeed. From the developmental point of view, south-east Iran is the most underdeveloped region of Iran. The initiation of work on Chabahar- Zahedan rail network will provide employment &connectivity and lead to the economic development of the region.

However, it is the strategic importance of Chabahar and India’s underlying interests that makes the development of ChabaharZahedan railway line significant.

Chabahar is located strategically offMakran coast in the Gulf of Oman at the southern end of Persian Gulf and Iran’s closest and best access point to the Indian Ocean. It is far away from Iran’s other major port of Bandar Abbas that currently handles the bulk of its transshipments but is constrained due to capacity and inability to berth large ships. In contrast, Chabahar is an oceanic port and capable of handling much larger vessels. Developing it and utilising its true potential is in Iranian interest as that will reduce the distance. When linked with the Iranian railway network, it will connect the port with the rest of Iran.

The development of Chabahar-Zahedan railway line and its development has provided an opportunity to Iran to initiate developmental projects in the region since it enjoys exemptions from the new round of the US. sanctions that were obtained due to Indian pressure and leverage with the USA, due it being the preferred port of transit for goods destined for Afghanistan for providing relief and humanitarian assistance to the people of Afghanistan.

As is well known, India has been deeply engaged with the development of Chabahar port which has been in works now close to two decades. The impetus to the development of the port came in May 2016 when India, Iran and Afghanistan signed a key trilateral deal, known as the Chabahar Agreement, to establish a strategic India-Iran-Afghanistan Trilateral Agreement on Transport and Transit Corridors to facilitate trade with Afghanistan, Central Asia, Russia and Europe for utilizing Chabahar port as a hub, giving a boost to Indian access to Afghanistan and creating the International North-South Transport Corridor (INSTC).

India at the signing of the agreement had committed the $ 150 million for development of Phase I of Chabahar port and assistance in laying of the rail network from Chabahar to Zahedanwith onward connectivity to Zeranj-Delaram road. The cost of the project is around $ 400 million which Iran has committed to funding from its National Development Fund. But it is anybody’s guess if it will be able to meet the commitment due to its precarious economic condition.

The first phase of the strategic Chabahar port was inaugurated in December 2017 by Iranian President Hassan Rouhani. India after completion of berthing facilities developed a 640-meter container terminal at ShahidBeheshti at an initial cost of US $ 85 million. It thereafter floated a Special Purpose Vehicle(SPV), India Global Ports Pvt Ltd, to operationalize container operations at the end of December 2018. However, there has been a lack of interest from shipping companies in operating from the port due to limited trade, lack of volumes and inadequate infrastructure in the movement of containerised cargo. Nevertheless, India has delivered consignments of wheat and rice for Afghanistan through Chabahar.

As part of reciprocity, 23 containers from Afghanistan also delivered cargo at Indian ports in March 2020.

The progress on the development of Chabahar and Indian commitment to the project has been slow and tardy. This is primarily due to uncertainties relating to the global power play, most importantly deteriorating relations between the US and Iran. Repeated economic sanctions on Iran have prevented participation by global companies in the development of infrastructure projects in Iran, due to fear of economic sanctions, although Chabahar and rail links associated with it are exempted from the purview of sanctions.

Although Chabahar is strategically vital for India due to its commitment to Afghanistan’s economic growth and development, the impending withdrawal of US forces and lack of any positive signals on reconciliation have cast a shadow on the future development of the project.

Other significant development relating to the development of the project was Iranian offer to Pakistan and China to participate in the development of Chabahar and provide connectivity between Chabahar and Gwadar to promote trade and commerce.

Indian interest in the development of Chabahar was primarily two-pronged; establish connectivity with Afghanistan and Central Asia bypassing Pakistan and acting as a counterweight to Chinese and Pakistani influence in the region. Iranian decision to invite the Chinese and Pakistan to a strategically important project for India would have forced a rethink by India. Although it is a different matter as to why would China want to commit additional resources for the development of Chabahar when it is well embedded at Gwadar, barely 76 km away.

Although not much has materialised on that front, it is the latest developments relating to growing Iran China co-operation that is a cause for concern for India.

As reported in these columns (FE 13 July 2020), Iran and China are working on a strategic agreement with a framework of $ 400 billion, contours of which have been revealed in the last few days. Interestingly it shows it to be an outcome of Iranian desperation to woo the Chinese rather than Chinese willingness to commit huge investments in Iran with a cascading impact on its economic relations with another gulf, middle-east and Israeli entities.

As inputs indicate Iran will open up its defence facilities to the Chinese including air and naval bases. However, there is resentment within Iran to opening to Chinese and allowing them unhindered access to its hydrocarbon and defence facilities as the same is being negotiated opaquely and without the approval of parliament.

An important aspect that is likely to impact Iran China relations is the treatment of Uygurs. After the 1979 revolution, Iran has turned into a deeply theological state. It is difficult to see it reach such wide-ranging pacts with Communist China, particularly when China is being condemned by the rest of the world over its treatment of its own Muslim population in Xinjiang and elsewhere.

For present Iranian move to commence construction of ChabaharZahedan rail corridor without India, in the backdrop of cooling relations between the two countries, may appear as a setback but needs to be seen from a pragmatic Indian viewpoint.

Chabahar remains crucial from the Indian viewpoint for access to Afghanistan and Central Asia with close to $ 500 million has gone to its development. It is unlikely that operation of the port may be impacted by non- participation of India in development of ChabaharZahedan rail line. Iranian’s may be building up pressure on India, but a wait of a few more months maybe prudent to get a clear picture of Indo-Iran relation.

(The author is an Indian Army Veteran. Views are personal.)

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