Written by Arjun Chawla.
In the last week of October, a shipment of wheat from Kandla port in Gujarat, India, arrived at Chabahar in the Sistan-Baluchestan province in Iran, officially markingthe operationalisation of the Chabahar port.
According to the Indian Ministry of External Affairs, the consignment was part of an agreement to supply Afghanistan with 1.1 million tonnes of wheat on a grant basis. The genesis of the project dates back to a joint statement between New Delhi and Tehran in 2003 to construct a port in Chabahar with Indian assistance and investment. However, since then the project was stalled due to external political pressures and bureaucratic hesitance. The most significant obstacle in the project’s development were the Western sanctions imposed on Iran and the repeated the US threat to impose secondary sanctions on third-country entities engaging in business relations with Iran. However, the Iran Nuclear Deal was signed in 2015 and saw the lifting of the sanctions, allowing for a revival of the project. In May 2016, the project was given a new impetus when India, Iran, and Afghanistan signed the Trilateral Agreement on Establishment of International Transport and Transit Corridor. Under this agreement, New Delhi committed $500 million towards developing Chabahar port as well the land-based route connecting the port to Afghanistan.
Chabahar provides landlocked Afghanistan with an alternative access route to the sea, thereby diluting its traditional dependency on Pakistan. Previously all sea route trade to and from Afghanistan was directed through the Karachi port in Pakistan and the threat of cutting off this route served as a powerful bargaining chip for Islamabad
The timing of Chabahar’s activation is especially significant as it is congruent with the Trump administration’s new Afghanistan strategy, which calls for India to establish a larger footprint in Afghanistan especially by partnering with the US in economic development initiatives.
From the Indian vantage point, Chabahar serves two immediate interrelated foreign policy objectives. First, the port acts as a natural geo-economic enabler by allowing India better trade access to Afghanistan via Iran. Despite India’s development aid in infrastructure, health and education, and civil service, police, and military training, supplemented by geographical and cultural proximity, India-Afghanistan trade has not been realised to its full potential. The bilateral trade for 2014-15 stood at a sub par $422 million in export and $262 million in import by India, well below potential, given the geographical proximity. The pre-eminent constraint to bilateral trade has been the unwillingness of Pakistan to allow a transit route due to the political hostility between New Delhi and Islamabad. While, earlier this year India and Afghanistan established an Air Freight Corridor, in an attempt to bypass Pakistan, the activation of Chabahar officially marks the circumvention of the land route by establishing a viable alternative by sea.
CPEC and INSTC
Second, Chabahar provides landlocked Afghanistan with an alternative access route to the sea, thereby diluting its traditional dependency on Pakistan. Previously all sea route trade to and from Afghanistan was directed through the Karachi port in Pakistan and the threat of cutting off this route served as a powerful bargaining chip for Islamabad in getting Kabul to comply with its agenda, an integral part of which involved keeping India out of the region. This dilution in the asymmetry of bargaining positions is of significant geo-strategic interest for New Delhi as it allows for a more prominent and consistent role for India in Afghanistan’s future in compliance with the demand for such a role by successive administrations in Kabul. Additionally, despite denial at the official level, Chabahar is increasingly being interpreted as a counter to the already operational Gwadar port in the Balochistan province of Pakistan, which forms a critical part of the China-Pakistan Economic Corridor (CPEC), allowing Beijing direct access to the Arabian Sea for civilian and military use, fuelling India’s concerns over China’s increasing maritime presence in the wider Indian Ocean Region.
In the long run, the Chabahar project has the potential to expedite the development of the International North-South Transport Corridor (INSTC), which is a multi-mode network involving land and sea links connecting Mumbai to Moscow via central Asia. Initial talks about the establishment of the Corridor between Moscow, New Delhi, and Tehran, took place back in 2000. Today, the INSTC project has more than ten member countries from Central Asia and Eastern Europe. This grand project was envisioned to promote trade connectivity and reduce the cost and time in transportation of freight. However, the INSTC network, of which Chabahar is a key link, is also critical to India’s future energy security, as it will provide New Delhi quicker land route access to oil from Russia and natural gas from Central Asia.
In order to translate the potential geopolitical advantage offered by Chabahar into reality, a note of caution is necessary. Firstly, New Delhi’s trade and infrastructure development policies have to work in tandem with its security policy towards Afghanistan, which involves military assistance and training to Afghan forces to combat the Taliban, whose stronghold continues to cause conflict and instability. Additionally, Afghanistan needs to reap the tangible economic benefit of access to the Indian market through Chabahar soon for Kabul’s policymakers to sustain their interest in the project given China’s recent attempts to court Afghanistan into joining CPEC under its Belt and Road Initiative (BRI) using trade and development investment incentives. This would require efficient and timely development of the road infrastructure linking the port to Afghanistan, as well as expanding the storage capacity at the port itself. Finally, the success of the Chabahar project is highly contingent upon the future of the Iran Nuclear Deal.
The Trump administration’s recent decision to review the sanctions regime against Iran attributed to Tehran’s alleged violation of the sanctity of the deal, is a source of great concern for New Delhi. The reinstatement of sanctions on Iran would not only deliver a striking blow to India’s geopolitical interests in the region, but also adversely impact Afghanistan, and violate the United States’ own recently stated policy of encouraging an increased Indian presence in Afghanistan. Therefore, the success of the high-risk high-reward Chabahar project ultimately rests precariously upon the wider geopolitical game being played in the region.
Arjun Chawla is currently pursuing an MSc in International Relations at LSE. He previously worked as a researcher at Gateway House: Indian Council on Global Relations, a foreign policy think-tank based in Mumbai, India. He can be contacted at firstname.lastname@example.org. This article was first published on the LSE’s South Asia blog and can be found here.Image credit: by India Ministry of External Affairs/Flickr.