Explained | Reinvigorating the Chabahar port

The story so far: After months of what appeared to be a “go-slow”, the Union government has revved up its interest in using Iran’s Chabahar port to connect to Afghanistan and Central Asia for trade, with the visit of the Union Minister of Ports, Shipping & Waterways Sarbananda Sonowal to the port on August 20.

Why is Chabahar back in the news?

Ahead of the visit to Iran, where Mr. Sonowal met with senior Ministers as well as officials connected to the Shahid Beheshti terminal project development, an official statement said that the visit would be a chance to “strengthen ties and the maritime relationship” between the two countries. “Due to [the] pandemic, there were less number of visits from India to Iran and vice-versa… This visit will also highlight the importance of Chabahar as a gateway for Indian trade with Europe, Russia and CIS [Commonwealth of Independent States] countries,” the statement said. During the Chabahar visit, Mr. Sonowal reviewed the progress in the work on the terminal and handed over six mobile harbour cranes “to improve efficiency” and “invigorate the potential of Chabahar” in the loading and unloading operations at the port.

What is India’s strategic vision for Chabahar?

When the first agreement for Chabahar was signed by then Prime Minister Atal Bihari Vajpayee in 2003, the plan had a three-fold objective: to build India’s first offshore port and to project Indian infrastructure prowess in the Gulf; to circumvent trade through Pakistan, given the tense ties with India’s neighbour and build a long term, sustainable sea trade route; and to find an alternative land route to Afghanistan, which India had rebuilt ties with after the defeat of the Taliban in 2001.

Subsequently, Prime Minister Manmohan Singh’s government constructed the Zaranj -Delaram Highway in Afghanistan’s South, which would help connect the trade route from the border of Iran to the main trade routes to Herat and Kabul, handing it over to the Karzai government in 2009.

In 2016, Prime Minister Narendra Modi travelled to Tehran and signed the agreement to develop Chabahar port, as well as the trilateral agreement for trade through Chabahar with Afghanistan’s President Ashraf Ghani. Since the India Ports Global Chabahar Free Zone (IPGCFZ) authority took over the operations of the port in 2018, it has handled 215 vessels, 16,000 TEUs (Twenty-foot Equivalent Units) and four million tons of bulk and general cargo, the government said in Parliament last month.

In the last few years, a fourth strategic objective for the Chabahar route has appeared, with China’s Belt and Road Initiative making inroads in the region. The government hopes to provide Central Asia with an alternate route to the China-Pakistan Economic Corridor (CPEC) through Iran for future trade. Speaking a few days earlier on the occasion of a “Chabahar Day” function in Mumbai, Mr. Sonowal said that it is India’s vision to make the Shahid Beheshti port a “a transit hub” and link it to the International North South Trade Corridor (INSTC), that also connects to Russia and Europe.

Why is the Chabahar dream taking so long to realise?

Since the beginning, the development of the Shahid Beheshti terminal in Chabahar as well as surrounding infrastructure has hit geopolitical road-block after road-block; the biggest issue has been over Iran’s relationship with western countries, especially the United States. In years when western sanctions against Iran increased, the Chabahar project has been put on the back-burner, while in the years when nuclear talks that resulted in the Joint Comprehensive Plan of Action (JCPOA) in 2015 came into being, the Chabahar port has been easier to work on. In 2018, the U.S. Trump administration put paid to India’s plans by walking out of the JCPOA and slapping new sanctions on dealing with Iran. This led to the Modi government “zeroing out” all its oil imports from Iran, earlier a major supplier to India, causing a strain in ties. Despite the fact that the U.S. made a special “carve-out” on sanctions for Chabahar, on the ground, it has been difficult to source equipment for the port construction from infrastructure companies that continue to fear secondary sanctions, as well as to engage shipping and insurance companies for trade through Chabahar.

The Modi government also snapped ties with Afghanistan after the Taliban takeover in August 2021, which put an end to the humanitarian aid of wheat and pulses that was being sent to Kabul via Chabahar. When India restarted wheat aid to Afghanistan this year, it negotiated with Pakistan to use the land route instead.

With the government now reopening the Indian Embassy in Kabul, and establishing ties with the Taliban government, it is possible that the Chabahar route will once again be employed, another reason for the recent flurry of activity at the Iranian port terminal that India has pinned so many hopes on.