Clearing the hurdles
India’s efforts to improve its access to Afghan and Central Asian markets would appear to be bearing fruit – thanks to its support for Chabahar as a gateway. The latest negotiations were positive.
The expansion of the port of Chabahar, located on the Gulf of Oman on Iran’s energy-rich southern coast, has been on the drawing board for no less than ten years (see also page 16 of our Iran Special in ITJ 23-26 / 2015). It is in easy reach of the west coast of India, with the route conveniently avoiding Pakistan. This is one of the key reasons why India is prepared to construct several container and multipurpose terminals in the hub, whilst simultaneously also being prepared to invest in overland connections. Thus India recently provided USD 400 million worth of steel for the construction of a railway line between Chabahar and Zahedan, close to the Afghan border.
This clearly illustrates that the Indian parties involved do not only have their eye on minerals, oil and gas from the region, but are rather pursuing overarching economic aims too, according to a report published by the Global Times, a Chinese English-language daily.
Thus the port has additionally been cited as serving as a counterpoise to the Pakistani port of Gwadar, which is located just 70 km east of Chabahar, and which is being modernised and expanded – with substantial Chinese funds. China and Pakistan are currently in the process of building a so-called economic corridor from Gwadar to Xinjiang, at the cost of USD 46 billion.
Open to both sides
It is crucial to remember that Iran would appear to be open to both sides at the moment; this means that besides conducting negotiations with India its connections to China are obviously also very important to the nation.
At least, Iran has never officially raised its voice against the project currently being realised in Gwadar, which is advancing at a much faster pace than the project in Chabahar. Regional reports have it, rather, that Iranian parties have been involved in supplying fresh water and fuel to construction companies carrying out building work in the port of Gwadar, for example.
Indian planning to invest USD 500 million
On the occasion of a recent state visit to Iran, Narendra Modi, India’s prime minister, assured his interlocutors that India is prepared to invest approximately USD 500 million in the overall development of the port of Chabahar. This was after the USA and the EU had lifted sanctions imposed on Iran.
One of the consequences of these developments is that in July the Shipping Corporation of India resumed services to and from Iran, after a four-year hiatus. It deployed a Suez-max tanker from Iran, which was transporting oil for the Indian state-owned oil refinery Hindustan Petroleum Corp.