Introduction
An India-operated port in Iran's Chabahar would
open a gateway for the country to Afghanistan and Central Asia. The port is of
strategic importance.
The decision to ink MoU with Iran for expansion of
Chabahar Port, after a long delay, opens up major commercial and strategic
opportunities for India
Why Chabahar is Crucial ?
1.
Sits at mouth of Strait of
Hormuz area. It is at the Junction of shipping, oil trade routes About 100,000
ships sail by yearly
2.
It Connects three regions:
Central Asia, South Asia and West Asia
3.
Chah Bahar will foster Closer
ties with Iran will allow Delhi to secure cheaper energy imports. Chah Bahar
has hold on two-thirds of world oil reserves. Chabahar Port route helps connect
India with energy-rich Azerbaijan, Turkmenistan & other central Asian
nations. An estimated 17 billion barrels of crude oil passes this way daily.
4.
It Gives India strategic heft
in region; helps it bypass Pakistan & build closer ties with Iran and
Afghanistan
5.
This route is 40% shorter, 30%
less expensive than trade via the Red Sea-Suez Canal-Mediterranean route
6.
In the absence of transit
through Pakistan, Iran is India's gateway to Afghanistan, Central Asia, and
Russia and beyond and the Chabahar port is the key element in that
7.
The location of the port is
significant as It is located barely 72 km away from the deep-sea Gwadar port.
Thus Once functional, Chabahar will Offset China's growing influence and reach
in the region. will further undermine Gwadar.
8.
While the Chabahar port is
essentially meant for commercial purposes and provides transit route to
Afghanistan, India Can use the facility to monitor Pakistani & Chinese
activities in the India Ocean Region as well as Gulf. It could be convenient
location for India to monitor activities of Pakistani Navy
9.
Indian investment in the port
would serve as a link to Delaram-zaranj road that India built in Afghanistan.
Chabahar port would give New Delhi a base to position itself after international
troops withdraw from Afghanistan
10.
India-built Zaranj-Delaram
road in Afghanistan will connect to the Chabahar port via Milak. Iran with
financial aid from India is upgrading the Chabahar-Milakroad
11.
The
Chabahar-Milak-Zaranj-Delaram highway will open up the Indian market to Afghan
farm products and other exports. It will also help combat the scourge of
illicit drugs production and export and assist the trade, transport and transit
network of Iran
Significance of the deal for Afghanistan
1.
Unhindered access to the
Indian Ocean
2.
India-built highway will link
country to Chabahar port, further trade
3.
Afghanistan hopes to exploit
$ltrillion of untapped mineral wealth to earn revenue
Run-Up To The Deal
In 2009, India built a 218 kin long (@$100m) link
road from Delaram in western Afghanistan to Zaranj on the Iran-Afghan border to
link up with Chabahar port
Zaranj Delaram highway connects with the 2,200 km
two-lane metalled road network, known as the Garland Road that connects major
cities in 'the country
Rational for indian Investment in Chabahar
An Indian JV company will lease two berths in
Chahbahar's Phase-I for 10 years, which could be renewed by "mutual
pact". The JV will invest $85.21 m for equipping the two berths further
within 12 months.
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India will invest $85m to
build a container terminal & a multi-purpose cargo terminal
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On May 6, 2015, Union minister
Nitin Gadkari signed MoU with Iran to complete this by Dee 2016
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Iran wants Chabahar to be the
third major hub for its petrochemical industries
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Indian private & public
sector entities projected investment worth $22b in the free trade zone area
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Chemicals, petrochem, steel,
fertilizer are major sectors, besides Indian railways likely to invest
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India was offered the project
to develop Chabahar port in 2003 by Iran, intended to be a critical
access-point to land locked Afghanistan
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For Afghanistan, an
operational Chabahar route was a better alternative. It would reduce its
dependence on Pakistan - the sole nation
providing it access to the sea
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Pakistan has been reluctant to
allow Indian goods to pass overland through its territory
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The project did not take off
over US sanctions against Iran, but India has gone ahead now follwing lifting
of the sanctions
Factors that will obstruct Chabahar in its full
development.
Chahbahar has the
potential to alter the entire strategic relations of Afghanistan and Iran with
India and oil geopolitics of Central Asia. But the path is not going to be easy.
1.
The
fate of the Chabahar project will depend on successive governments showing
sustained resolve in the face of geopolitical hurdles. The potential spoilers
are several.
(a) For one, relations between Tehran and the
West, though vastly improved, remain fraught, with many hardliners in Iran
believing the country was short-changed in the nuclear deal that paved the way
for an end to sanctions. That, potentially, could lead to tensions
(b) There could be differences over Iran’s role
in Syria and Afghanistan.
(c) Indian governments will also have to
incentivise private corporations for using the Iranian route to transit goods
to Central Asia, rather than the fast, cheap networks they now use through
Singapore and China.
(d) Finally, the project can only be successful
if Indian manufacturing is globally competitive.