Chabahar no game-changer yet: China overshadows Indian footprint in region

In Iran, Prime Minister Narendra Modi has revived the Chabahar initiative, begun by the first NDA government of prime minister Atal Bihari Vajpayee.

The project was abandoned mainly because the sanctions regime made it difficult to do much with Iran. But now with the sanctions lifted, Delhi is giving it a fresh lease of life. The commercial agreement for the Chabahar port signed on Monday is seen as a strategic move by India to bypass Pakistan and open a direct line to Afghanistan through Iran. The development of Chabahar is at the heart of the transport corridor connecting Iran-Afghanistan and India to the Central Asian countries and beyond.

Chabahar is seen as a game-changer for regional connectivity and Modi termed it 'historic'.

But this is the first tentative step and too early to celebrate. The port is located in the Gulf of Oman in Iran’s southeastern region, not far from Pakistan’s port of Gwadar. It is the only Iranian port with direct access to the ocean. The work on the port was started by India in the 1990s, but did not go far. In May this year, an MOU was signed between India and Iran to build two terminals and five berths in Chabahar. India will invest $200 million initially for the port and an additional $500 million will be available for the development of related infrastructure.

The commercial agreement was signed on Monday after talks between the Modi and Iran's president Hassan Rouhani. Apart from  Rouhani and Modi, Afghan president Ashraf Ghani was also present, signalling the importance of Chabahar for land-locked Afghanistan, heavily dependent on neighbouring Pakistan to maintain supply lines.

The Chabahar project is expecected to bloster regional trade and give fillip to the economy of the neighbouring countries.

"We want to link to the world, but connectivity among ourselves is also a priority. The corridor will spur unhindered flow of commerce throughout the region. Inflow of capital and technology could lead to new industrial infrastructure in Chabahar,” Modi said after the agreement was signed.

Rouhani was equally enthusiastic saying that the trilateral connectivity agreement was “not merely an economic document but a political and regional one” with a message of regional opportunities for development. He added that accord would help peace and stability in the region.

Bypassing Pakistan

The Chabahar port project has been in the works since as far back as 2003, when the first MoU was signed. India and Afghanistan were keen to find an alternative route to Afghanistan, since Pakistan does not allow the transit of Indian goods through its territory. The project has been long-delayed thanks to many factors, including the crippling sanctions which US and its European allies had slapped on Iran. Today, with the lifting of sanctions, the project has a better chance of success.

PM Narendra Modi meets Iranian President Hassan Rouhani in Tehran. Twitter @MEAIndia

PM Narendra Modi meets Iranian President Hassan Rouhani in Tehran. Image courtesy: Twitter @MEAIndia

While it is a win-win situation for all concerned, for Afghanistan it will be another lifeline, as it will make it somewhat less dependent on Pakistan, a troublesome neighbour. Not only will it be easy for Afghanistan to get Indian products directly from the Chabahar port and into Afghanistan by road and rail, but India has already spent around $100 million to construct a 218-kilometre-long (140-mile) road from Delaram in western Afghanistan to Zaranj in the Iran-Afghan border to link up with Chabahar port. Afghanistan can also tap the huge Indian market through exports from Chabahar.

India will also be investing in petrochemeicals, fertilisers, metallurgy in Chabahar’s Free Trade Zone. Indian Railways will help build a 500-kilometre line between Chabahar and Zahedan as part of the project. Information Communication Technology, India’s strong
points is also on the cards to be set up in the Free Trade Zone adjoining Chabahar. The FTZ is already filled with Chinese projects,
with a makeshift town also coming up for its huge workforce.

India’s hope is that the corridor will spur the unhindered flow of commerce throughout the region. Inflow of capital and technology could lead to new industrial infrastructure in Chabahar.

But in certain quarters, too much is being made of Chabahar’s competition to Gwadar in the Makran coast of Pakistan. China had built
Gwadar and is now involved in running it. Compared to that, India’s presence in Chabahar is minuscule and as of now, it is involved in a very small way. India's efforts overall pale in comparison to China’s footprints in the region.

India’s record in projects is not good

In the past, India’s record in projects has been dismal. There have always been inordinate delays. Modi, however, is a man in a hurry and will possibly prod the Indian side to deliver on time. Possibly in an attempt to smooth these problems, a ministerial team will monitor the connectivity project.

Having firmed up a good deal, it is now for India to deliver.

Sending goods by sea to Chabahar will and then on by rail or road will bring down nearly 50 percent of the cost. All eyes will now be on how and when India delivers on Chabahar. Other factors that may act as spoilers are the situation in Afghanistan as well as Iran’s own problems with the US. The Republicans are unhappy with the nuclear deal and have been critical of President Barack Obama’s efforts. Much will depend on who wins the presidential race in November and how relations with Iran pan out.

But if the situation remains as it stands at present and India delivers on time, Chabahar could open a new chapter in the region's history.

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Updated Date: May 25, 2016 08:42:40 IST

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