The Iranian port of Chahbahar, being developed by India was inaugurated by the Iranian President Hassan Rouhani today. The port, towards which India has committed $500 million, will help India to bypass Pakistan and open a new trade route to Afghanistan and Central Asia. The port is expected to vastly increase trade among India, Afghanistan, Iran and the Central Asian nations in the wake of Pakistan denying transit access to New Delhi for trade.
Chabahar: A game changer
Chahbahar, situated in the Sistan-Baluchistan province of Iran bordering Pakistan, is only 72 kms away from the Gwadar port, which China is building as a part of China Pakistan Economic Corridor (CPEC). Being situated in a relatively stable region, Chahbahar is less likely to see disruptions compared to Gwadar, which falls under the restive Baluchistan province of Pakistan, which makes operations much more difficult there.
India, Afghanistan and Iran have already signed a tripartite trade and transit agreement to facilitate trade between them. Already, India has sent shipments of wheat to Afghanistan through Chahbahar. This trade via Chahbahar is likely to increase manifold as landlocked Afghanistan looks to cut its dependence on Pakistani ports like Karachi. India is building a railway line connecting Chahbahar to the Iranian railway network which will allow it to reach Central Asia and Afghanistan and even Russia.
An upcoming Special Economic Zone is also being readied which has seen interest from Japan. Investment from Japan will infuse much-needed capital and expertise into the project and will perfectly play into India and Japan’s geostrategic vision of containing China by developing an alternative economic and connectivity framework.
The Chinese factor
China has garnered a lot of buzz around its Belt and Road Initiative (BRI), a huge network of land and maritime trade linkages aimed to link China with Eurasia and Europe physically and economically. It aims to invest billions of dollars to improve infrastructure in countries along the old Silk Road and Maritime Silk Route to ensure that these countries are drawn into China’s political and geographical sphere as it aims to recast Asia and the World in the image of Imperial China, which was known as the Middle Kingdom.
India has steadfastly refused to participate in the BRI, despite many efforts by China. Indian opposition comes from the fact that the China Pakistan Economic Corridor or the CPEC passed through PoK, which is claimed by India. Sovereignty issues aside, a rising China with increased aggression is not good news for India. Chinese activity in the IOR is already raising alarm in India and as Doklam incident shows, China is not averse to using any means necessary to keep India in tenterhooks.
So, it makes sense for India to develop alternative options for trade and commerce as it seeks to raise its global profile and ward off the increasing Chinese influence.
Chahbahar port: A key piece of the puzzle
India has quietly moved to work towards developing multi-national trade and transit networks that may ensure that while the Chinese have stolen a march, India is not left too far behind. A key component of that architecture is the International North-South Transport Corridor (INSTC), a 7,200-km-long multi-modal transport corridor between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe. The corridor will significantly reduce the cost and time of transporting goods from Mumbai to Russia and Europe, increasing trade and commerce and help India increase its exports there.
The route involves moving goods from Mumbai to Bandar Abbas in Iran via ship and then transport it overland to Europe and Russia. With the upcoming development of Chahbahar, potentially Chahbahar can be linked to this project which increases the synergy between the various initiatives taking place in Chahbahar. From Chahbahar, Goods can move to Afghanistan and Central Asia or diverge to Russia and Europe, thus increasing the sustainability of the route and the port itself.
Another initiative, the Asia Africa Growth Corridor (AAGC) sponsored jointly by India and Japan is developing to provide a counterweight to the BRI, which seeks to link Japan with Southeast Asia with India and Africa. Unlike the BRI of China which seeks to build infrastructure in recipients countries with the sole aim to exploit the extract resources for China, the AAGC will look to act as a partner for the development priorities of different countries and sub-regions of Asia and Africa, creating policies and priorities to specific to each country.
The AAGC will naturally find synergy with Chahbahar and the INSTC and complement each other. The ultimate result will the linking of the vast area from Japan to Europe with Southeast Asia, India, Africa and Central Asia. These regions include the fastest growing economies of the world and in India and Africa, two of the most demographically favourable regions of the world. Given that demography of Europe and Japan is less than favourable, the vast network will serve to complement and leverage respective advantages to benefit all.
Thus, with the opening of the Chahbahar port, India is ready to step upto the plate and build its own narrative that showcases a bold new vision and engage proactively to work with partner nations to ensure that the fruits of the co-operation are shared as partners and ensures mutual development based on cooperation, dignity and shared sense of the future.