India Iran Agreement On Chabahar Is A Strategic Opportunity, Monish Gulati
Following the
Indo-Iran bilateral summit in Tehran in May 2016, the two countries signed
12 pacts, including two agreements on India’s participation in the expansion
and operation of the Chabahar port. The Chabahar agreement since then has been
debated as a ‘strategic game changer.’
Some of the analysis
and comments have framed Chabahar in the correct strategic context; not just as
a gateway to Afghanistan bypassing Pakistan but as India’s first truly
strategic connectivity endeavour. To that end, while Chabahar is a symbol of
Indo-Iranian cooperation, it is also India’s gateway to Eurasia. This
article examines the Indo-Iranian agreement on the port of Chabahar, in a
strategic context.
The Deal
India has pledged to
invest $500 million for the development of the Chabahar port. [1] The bilateral
contract signed between IPGPL (India Ports Global Private Limited) and Arya
Banader of Iran envisages development and operation of two terminals of five
berths handling both multipurpose and general cargo for the next ten years.[2]
Also India’s Export
Import Bank (EXIM) has signed a MoU with Iran’s Ports and Maritime Organization
(PMO) that will enable it to extend a credit of $150 million for the
development of Chabahar port. For rail connectivity, a MoU between IRCON and
Construction, Development of Transport and Infrastructure Company (CDTIC) of
Iran will enable the former to provide all superstructure work and financing
the project (around USD 1.6 billion) for the construction of the
Chabahar-Zahedan railway line which forms part of transit and transportation
corridor in trilateral agreement between India, Iran and Afghanistan.
Earlier in May 2015,
Nitin Gadkari, Minister for Shipping and Road Transport & Highways had
concluded an inter-Governmental MoU regarding India’s participation in the
development of the Chabahar Port with Iran.[3] The MoU paved the way for
designated Indian and Iranian commercial entities to commence negotiations
towards finalization of a commercial contract under which Indian firms were to
lease two existing berths at Chabahar and operationalize them as container and
multi-purpose cargo terminals through an investment of $85 million.
Strategic Context
The port is not just
about Afghanistan for India nor is it about India for Afghanistan. India’s
effort to develop a trade route to Afghanistan, in face of Pakistan’s denial of
an overland access will seek to co-exist with other trade corridors which may
come up in the region and involve Afghanistan. The Chabahar route in the case
of Afghanistan, supplements its existing sea access routes through Karachi in
the south and Bandar Abbas in the west. The fact that it provides Afghanistan
options in routing its trade and lessens Pakistan’s leverage on the country is
incidental. It would be a bonus if Pakistan would view the Chabahar access
in a positive light and compete to provide better facilities to the Afghans at
Karachi/Port Qasim and possibly at Gwadar (via Chaman) in the future. On
the other hand loosening of the Pakistani chokehold on its sea access will
allow Afghanistan to more effectively leverage the overland transit rights to
the Central Asian Republics (CARs) which Pakistan has been seeking.
From the Indian point
of view, the broadening of the connectivity scope of Chabahar to include the
INSTC or the International North South Transport Corridor (earlier Bandar Abbas
was the only proposed maritime access gateway) as distinct from only serving
the security unpredictable Afghanistan, has increased the economic potential
and viability of the project and sustainability of Indian investment. The
Indian component of the port is reportedly part of the ‘Ashgabat agreement’ for
creating transport and transit corridor for facilitating transportation of
goods.[4] Iran supports India’s desire to join the Ashgabat Agreement on
connectivity[5].
By seeing Chabahar
just as a means to rid Afghanistan of the Pakistani chokehold, India had
appeared to have marked down Chabahar’s importance and consequently pursued it
with less urgency and vigour that it actually merited. On the other hand, the
Pakistani development of Gwadar had been more farsighted. Pakistan appreciated
far earlier the advantage geography had bestowed on it not only in terms of
their dealing with Afghanistan but also with the CARs bordering Afghanistan. It
was only their desire to keep India and possibly Iran out of the equation that
led to Gwadar’s under-utilisation and other woes, till the Chinese stepped in
with their proposal on CPEC.
The China Factor
The current
India-Iran understanding on Chabahar provides the indication that, post its
nuclear deal with the P5+1, Iran still feels the need to strategically balance
China and that India is the option. However the China factor also needs to be
correctly understood. Iran’s approach to balancing Chinese presence is not by
keeping them out but by giving equal opportunity to other regional stakeholders
to participate and partner Iran in the country’s development. In the case of
Chabahar port given China’s overbearing presence in Gwadar, it would be imperative
from the Iranian point of view that in the near and midterm, Chabahar port is
developed and operated by a third country. Hence, India remained the
preferred choice despite the see-saw developments over the last decade. There
were of course two other factors in India’s favour; its determination to
support Afghanistan (therefore the tripartite India-Iran-Afghanistan pact) and
its partnership with Iran in the INSTC.
Conclusion
The deal comes with
its own set of imponderables; stability in Afghanistan, the security situation
in Sistan-Baluchestan and the progressive operationalisation of the Iranian
nuclear deal. There is also the much talked about Indian ability to deliver
projects in time. India’s resolve is not in question here and projects such as
the Delaram-Zaranj road, Salma Dam and other projects particularly in western
Afghanistan are a testament.
India intends to
undertake projects worth $20 billion in Iran including setting up an LNG plant
and a gas cracker unit in the Chabahar free trade zone.[6] Having also been
identified as the start point of Iran-Oman-Iran undersea pipeline, Chabahar is
the pivot of India’s cooperation with Iran and the region; it remains to be
seen how India’s plans are realised.
About the author:
Monish Gulati is an independent
defence analyst based in New Delhi.Views expressed by the Author are personal.
Source:
This article appeared at CLAWS
This article appeared at CLAWS
References:
[1]http://www.mea.gov.in/bilateral-documents.htm?dtl/26841/List_of_AgreementsMOUs_signed_during_the_visit_of_Prime_Minister_to_Iran_May_23_2016#
[1]http://www.mea.gov.in/bilateral-documents.htm?dtl/26841/List_of_AgreementsMOUs_signed_during_the_visit_of_Prime_Minister_to_Iran_May_23_2016#
[2] India Ports
Global, a recently formed port project investment arm of the shipping ministry
and a joint venture between the Jawaharlal Nehru Port Trust and the Kandla
port, will invest $85 million in developing two container berths with a length
of 640 metres and three multi-cargo berths. The contract is for 10 years and
extendable. It will take 18 months to complete phase one of the Chabahar port
construction. The first two years of the contract are grace period during which
India doesn’t have to guarantee any cargo for the port.) From the third year,
India will facilitate 30,000 TEUs (Twenty Foot Equivalent) of cargo at the
port. The quantum will rise to 2,50,000 TEUs by the 10th year.
http://economictimes.indiatimes.com/articleshow/52400399.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
[3]Inter-Governmental
MoU between India and Iran, Ministry of External affairs GoI, May 06, 2015
[4]Dipanjan Roy
Chaudhury. ‘India, Iran and Afghanistan sign historic three-way transit
accord,’ The Economic Times, May 24, 2016. http://articles.economictimes.indiatimes.com/2016-05-24/news/73315308_1_chabahar-port-india-gains-modi
[5] Monish Gulati.’
India’s Central Asia connect may lie through Ashgabat,’ South Asia Monitor,
November03, 2015.
[6] Devirupa Mitra.
With Chabahar Text Finalised, India’s Dream of a Road to Afghanistan Gathers
Speed, The Wire, 13/04/2016.
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