Strategic And Economic Role Of Chabahar Port: US And India Interests Converge

With the exemption having been withdrawn and again restored suddenly, the spotlight is now on a port that has been under development with Indian assistance for over a decade.  Chabahar is the only ocean-facing port of Iran and, as such, assumes considerable importance. India’s decision to invest in the development of the port facilities was meant to provide an alternative to Pakistan’s Gwadar port which is being set up with Chinese investment. 

The question is, why is Chabahar development so important for stakeholders in the West Asian and Central Asian regions? First, with Chabahar being the only oceanic port of Iran, it is set to emerge as a hub for the country’s seaborne trade in the long run. Currently, most of Iran’s trade, including crucial oil exports, goes through the Bandar Abbas port, which does not have the depth to accommodate standard cargo vessels. The result is that the country has to rely on transshipment facilities through the United Arab Emirates. Once Chabahar expands, this dependency will be eliminated, and Iran can use the port for exporting oil and gas. 

Second, the port is a critical lifeline for landlocked countries like Afghanistan and Central Asian nations.. These countries have needed a route for goods transport that does not have to traverse through Pakistan. In the past, there has been no option but to go through the latter country. Chabahar has now provided an alternative and safe route. In fact, wheat and other humanitarian aid from India is already being moved through Chabahar to Afghanistan.

Landlocked Nations Dilemma 

The list of landlocked countries in the region that will benefit from the port’s development includes Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan. Uzbekistan is described as a “double landlocked” country as it is surrounded by other nations that are also landlocked. 

As of now, there is still tension between Afghanistan and Pakistan over allowing passage of goods to and from India. The Taliban regime has recently reiterated its demand for allowing the movement of trade from India, which has been the sticking point. With the recent hostilities between the two countries, the outlook for the smooth movement of goods by the land route is looking even worse than usual.

Third, the project has considerable significance for India as it seeks to maintain a presence in Iran. This is a country with which it has steadfastly maintained close ties despite adhering to the West-mandated sanctions regime. The development of the port, a critical infrastructure facility, provides a counterbalance to China and its enormous Belt and Road Initiative. In addition, this provides an alternative route for India to continue trade with Afghanistan and the Central Asian countries.

Key Project For India

The project is also key to ensuring that India has access to oil and gas supplies from Iran. These are curtailed right now due to Western-mandated sanctions, but there are reports that some crude purchases have taken place recently. So the port’s development can help in providing a stable supply of energy resources in the future.

And finally, the plan is to link Chabahar to the proposed International North-South Transport Corridor (INSTC). This is a multi-modal transit corridor aimed at connecting India, Iran, and Russia to Northern Europe. The objective is to boost trade and reduce transit times by linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran. The corridor will then move on - by ship, rail, and road - to Northern Europe via St. Petersburg.

The INSTC partner countries include the founder members of India, Iran, and Russia as well as Central Asian nations. But the development of Chabahar is critical to the progress of the corridor as it will provide easy access for standard-size cargo vessels. The existing port of Bandar Abbas is not likely to be able to provide the capacity needed for expanding trade through the INSTC.

In other words, Chabahar is a key element of India’s policies to deepen strategic and economic ties with Afghanistan and Central Asian countries. Clearly, the fact that India could play a moderating role in the region was recognised by previous U.S. administrations, including Trump himself in his first avatar as president. But in the current tenure of Trump, there has been a hardening of positions against Iran. This has been aggravated by Iran’s aggressive posturing in the Israel-Hamas war. 

The US Position

The U.S. administration’s ire over these issues evidently led to the the recent decision to withdraw the exemption from sanctions given to the Chabahar port. The reversal of the decision, giving a six-month extension to the exemption, indicates that the Indian point of view on the issue has now been taken into account. The fact is, development of the port will not just benefit Iran but the entire landlocked Central Asian region. These countries, including Afghanistan, have not only to depend on the largesse of Pakistan to move goods by the sea route, but also on investments in infrastructure made by China in the region.

Yet the sanctions exemption is only temporary right now. It is thus incumbent on India to ensure that the Trump administration views the long-term outlook for the region in a holistic fashion rather than merely the short-term scenario. This is not just in India’s best interests, but also of the U.S., which seeks to play a pivotal role in Afghanistan and Central Asia.