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After years of negotiations and setbacks, India and Iran signed the Chabahar port agreement. This agreement will allow India to operate and manage the strategically important Chabahar Port. Union Minister for Shipping, Ports and Waterways Sarbananda Sonowal witnessed the signing of the contract between India Ports Global Ltd (IPGL) and Ports & Maritime Organisation of Iran (PMO) in Tehran.
According to the agreement, IPGL will invest approximately $120 million to equip and operate the port for the duration of the contract. Also, a credit window in rupees equivalent to $250 million was offered for mutually identified projects to improve infrastructure related to the port.
Where is Chabahar Port located? What has been the historical timeline of the Chabahar Port Agreement?
Chabahar Port- Chabahar is a deep water port, located on the Makran Coast of Iran’s Sistan-Baluchistan province. It is next to the Gulf of Oman and at the mouth of the Strait of Hormuz. It is the only Iranian port with direct access to the Indian Ocean and consists of two separate ports named Shahid Kalantari and Shahid Beheshti.
Historical Timeline of India’s Engagement with Chabahar
| Phase of Origin and conception of Chabahar | |
| 1970s-1980s | The conception of development of Modern Chabahar started in the 1970s. Iran realised the strategic importance of the port during the Iran-Iraq war of the 1980s. |
| January 2003 | Iranian President Khatami and Indian Prime Minister Atal Bihari Vajpayee signed off on an ambitious roadmap of strategic cooperation, which included the development of Chabahar Port. |
| Phase of Stagnation | |
| 2004-2015 | The US declared Iran as one of the “axis of evil” along with Iraq and North Korea. This pushed New Delhi to abandon its strategic relationship with Tehran. Chabahar project became a casualty. |
| Phase of Progress and Completion | |
| 2015 | After the signing of Joint Comprehensive Plan of Action (JCPOA) which normalised the relation between Iran and the P-5+1, a fresh impetus was given to the development of Chabahar port. |
| 2016 | Trilateral Agreement between India, Iran and Afghanistan to establish the International Transport and Transit Corridor was signed in May 2016. Thereafter, India’s Shipping Ministry worked at a brisk pace to develop the Chabahar project. |
| 2018 | Despite US’s withdrawal from JCPOA, India managed to get a waiver from the US for the Chabahar project. India cited connectivity with Afghanistan and countering Chinese aggressive infrastructure as major reasons for the push. |
What is the importance of Chabahar Port?
Geostrategic Importance
1. Viable gateway to Afghanistan and Central Asia- The Chabahar port provides an alternative route for India to reach Afghanistan and Central Asia. India’s land access to Afghanistan has been blocked by a hostile Pakistan.
2. Enhancing India’s Connectivity with Russia and Eurasia- The Chabahar port compliments INSTC for optimising Indian connectivity with Russia and Eurasia.
3. Diversification of India’s Import routes- The Chabahar Port provides strategic advantages to the Indian oil and gas sector through diversification of import routes
Geopolitical Importance
1. Facilitate supply of Humanitarian assistance- The Chabahar port has facilitated the supply of humanitarian assistance, especially during the Covid-19 pandemic. Till date, a total of 2.5 million tonnes of wheat and 2,000 tonnes of pulses have been trans-shipped from India to Afghanistan through Chabahar port.
2. Bolstering bilateral Relations- The Chabahar port has given a boost to deepening of bilateral relations between India and West Asian neighbours. For ex- India supplied 40,000 litres of the environment friendly pesticide (malathion) through the port to Iran to fight locust attacks in 2021.
3. Countering Chinese aggressive infrastructure push- Chabahar project helps in countering the aggressive Chinese push in the Central and West Asian region due to projects such as BRI. For ex- Counters the Gwadar Port being Developed by China in Pakistan.
Geoeoconomic Importance
1. Anchor for Indian trade in the West Asian region- Chabahar port serves as an anchor for Indian trade in the West Asian region. It also enhances India’s role in the Global Supply Chain.
2. Enhanced access to new markets-The Chabahar port provides India the opportunity to access to new markets in Central Asia, and for infrastructure development opportunities. The development of Chabahar Port will increase trade between India and Central Asia, with a potential bilateral trade value surpassing US$ 200 billion
What are the Challenges to Chabahar Project?
1. Potential US sanctions- United States has warned that “anyone” considering business deals with Tehran needs to be aware of the “potential risk of sanctions.” The Chabahar deal can attract US Sanctions.
2. Geopolitical uncertainty over INSTC project- The war in Ukraine and the destruction of Europe’s relationship with Russia has complicated the integration of Chabahar port with INSTC.
3. Rising Regional tensions in West Asia- Rising regional tensions between Iran and Israel, Saudi Arabia and Iran is also a major geopolitical challenge for smooth operation of the Chabahar project.
4. Declining India-Iran Trade- The stringent western sanctions on Iran has led to a significant drop in India’s energy imports from Iran. These sanctions can impact the volume of trade through the Chabahar port.
5.Infrastructure development- The Chabahar Project aims to enhance infrastructure like ports, roads, and railways. It demands substantial investment, time, and expertise. Delays or inefficiencies can hinder its advancement.
What Should be the Way Forward?
1. Focus on Connectivity- Cooperation regarding the integration of the Chabahar port and the International North-South Transport Corridor should be undertaken.
2. Securing Waivers from US sanctions- India must strive to obtain waivers from US sanctions on Iran, for smooth port operations.
3. Enhancement of bilateral trade- The bilateral trade between India and Iran must be increased to reap the full benefits of the Chabahar port.
| Read More- The Indian Express UPSC Syllabus- GS 2- India and neighbourhood relations |
