What are India’s stakes in Iran’s Chabahar port?

Sub: IR

Sec: Places in news

Context:

India and Iran signed a 10-year contract for the operation of a terminal at the strategically important Chabahar port in Iran.
Signing a long-term contract with Iran is part of India’s strategic and economic vision for Central Asia and beyond.

Location:

Chabahar is a deep-water port in Iran’s Sistan-Baluchistan province, closest to India among Iranian ports, and provides direct access to the open sea, facilitating large cargo ships.
Located 72 km west of Pakistan’s Gwadar port.

Development of Chabhar Port- Timeline:

Discussions on developing Chabahar started in 2002 between India and Iran, underlining its strategic importance during the Iran-Iraq war. It gained a formal structure with the New Delhi Declaration in 2003, aiming to link South Asia with the Persian Gulf and beyond.
The project faced delays due to changing international dynamics, particularly India’s growing ties with the U.S., which had adversarial relations with Iran.
The situation improved post-2015 following Iran’s nuclear deal with world powers, leading to the signing of a trilateral agreement between India, Iran, and Afghanistan in 2016 to establish a transport and transit corridor.
- India constructed a 218-km road from Delaram in western Afghanistan to Zaranj on the Iran-Afghan border to link with Chabahar.
As of 2018, India has been operating the port through India Ports Global Chabahar Free Zone (IPGCFZ), handling substantial cargo and container traffic.
Chabahar has been pivotal in delivering humanitarian aid, particularly during the COVID-19 pandemic, and facilitating trade routes to Afghanistan and Central Asia.

Strategic Connectivity and Significance:

Chabahar is crucial in the context of the International North-South Transport Corridor (INSTC), aiming to enhance connectivity between India, Central Asia, and Europe via Iran.
Despite international pressures and challenges, India’s strategic focus on Chabahar underlines its commitment to securing economic and geopolitical leverage in the region.
The port not only enhances India’s connectivity to Central Asia but also serves as a counterbalance to Chinese expansionist strategies under its Belt and Road Initiative.

International North-South Transport Corridor (INSTC):

Proposed in 2000, the INSTC was designed as a transport route from India to Russia via Iran, offering an alternative to the conventional Suez Canal route.
The corridor spans 7,200 km incorporating sea, rail, and road components, crossing multiple countries and aimed at enhancing India’s access to Central Asian and Eurasian markets.
Planned route:
- The INSTC envisages the movement of goods from Mumbai to Bandar Abbas in Iran by sea; from Bandar Abbas to Bandar-e-Anzali, an Iranian port on the Caspian Sea, by road; from Bandar-e-Anzali to Astrakhan, a Caspian port in the Russian Federation by ship across the Caspian Sea; and onward to other parts of the Russian Federation and Europe by rail.
Participating Countries: Besides India, Russia, and Iran, countries such as Azerbaijan, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, Ukraine, Belarus, Oman, and Syria have signed onto the project. Bulgaria has joined as an observer state.

Operationalisation:

- Dry runs conducted in 2014 and 2017 demonstrated that the INSTC route is more cost-effective and faster than the Suez Canal route, leading to the operational start between 2018-19. The first major commercial consignment through INSTC was sent in July 2022.
Geopolitical significance:
- The INSTC serves as an economic alternative for Russia amid Western sanctions and provides India with a route that bypasses Pakistan.
- However, European hesitancy towards routing through Russia post-Ukraine conflict brings alternative routes, such as Armenia’s proposed corridor to Europe via Bulgaria, into focus.
Challenges:
- Russia- Ukraine conflict
- Armenia- Azerbaijan conflict
- China advances the “Middle Corridor” as part of its global infrastructure strategy, potentially competing with the INSTC.
- Lack of proper finances

Source: IE