Chabahar Port: Seen As Counter To Pakistan's Gwadar Port, Why Chabahar Deal Is Crucial To India

Chabahar Port Deal: India and Iran on Monday, May 13, signed a 10-year deal for the management of the crucial Chabahar port with an aim to enhance strategic and economic ties between the two nations. The port, located on the southeastern coast of Iran along the Gulf of Oman, holds geopolitical importance for India, which is looking to bypass the ports of Pakistan. India has been developing a part of the Chabahar port since May 2016. However, the infrastructural development of the strategic port has been faced hurdles since Taliban's takeover of Afghanistan and due to US sanctions against Iran.

The Chabahar port will open up a key trade route, providing India direct access to the landlocked Afghanistan and Central Asian nations Kazakhstan, Turkmenistan and Uzbekistan. The key Chabahar deal signed between India and Iran on May 13, 2024, aims to foster trade across the West and Central Asian regions. Along with cooperation on management of the port, the deal also includes a huge investment by India on the port's infrastructure.

What Is The Chabahar Project

India Port Global Limited (IPGL), which was set up to develop the Shahid Beheshti Terminal of Chabahar port, will invest USD 370 million on the infrastructure of the port. The investment would be a push towards building the Iranian port into a regional trade transit hub. The aim of the investment is to bolster the port's cargo handling capacity, improve efficiency while bringing down transportation costs. The development of the port will also generate job opportunities in the region.

New Delhi had first proposed to develop the port way back in 2003. Later, in May 2016, India signed a deal with Iran and Afghanistan to develop the Shahid Beheshti Terminal of Chabahar port. India had then committed USD 85 million and has so far provided cranes and other important equipment. While India's role in the development of Chabahar was limited after Taliban returned to power in Afghanistan, India has continued to operate and outfit the container and multi-purpose terminals under existing agreements.

Where Is Chabahar Port Located

Chabahar, a deep water port, is located in Iran's Sistan Baluchistan province, along the Gulf of Oman. It is the closest Iranian port to India. The port is built in the open sea, which is easily accessible and secure for large cargo ships. The port is also strategically important as it is located near the Iran-Pakistan border.

Why Chabahar Port Is Important For India

The Chabahar port is crucial to India as it provides a direct trade route to Iran, Afghanistan and Central Asia. Located close to the Pakistan border, it allows India to bypass its rival neighbour and serves as a counter to the Gwadar port in Balochistan. The Chabahar port will reduce India's dependence on Pakistani ports. Further, India also looks to counter China's ambitious Belt and Road Initiative (BRI), which aims to link Asia with Africa and Europe via land and maritime routes.

This will be the first time that India will be directly managing an overseas port and it will help the nation expand its geopolitical footprints in the region. The Chabahar port will not only facilitate increased trade flow and economic integration in the region, but also place India as a key player in regional politics and the trade network.

The agreement, which is likely to attract further investments, will provide a major financial boost to both India and Iran. The port is also being projected as an alternative to the traditional trade routes for countries across the world.

India had used Chabahar port last year to send 20,000 tonnes of wheat aid to Afghanistan. In 2021, the port was used to supply environmentally friendly pesticides to Iran. Kandla port in Gujarat is the closest to the Chabahar port at 550 Nautical Miles while the distance between Chabahar and Mumbai is 786 Nautical Miles.

International North-South Transport Corridor

India plans to build the Chabahar Port into a transit hub which would help reach out to CIS (Commonwealth of Independent States) countries. The plan to develop the port falls under the International North-South Transport Corridor (INSTC), a transport route envisioned by India to economise the movement of cargo between India and Central Asia.

A multi-modal transportation route, the INSTC links the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran and onward to northern Europe via St Petersburg in Russia.

Chabahar Trade Route

The INSTC aims for direct transit of goods from Mumbai to the Shahid Beheshti Port - Chabahar (Iran) by sea. From Chabahar, goods will be transported by road to Bandar-e-Anzali, an Iranian port on the Caspian Sea. They will then be shipped across the Caspian Sea to Astrakhan, a port in the Russian Federation. Finally, from Astrakhan, goods will be transported by Russian railways to various regions of the Russian Federation and further into Europe.

US Warning On Chabahar Deal

Soon after the India-Iran deal, the United States issued a warning, saying any country having business dealings with Iran runs the "potential risk of sanctions". "We're aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its bilateral relationship with Iran," State Department Deputy Spokesperson Vedant Patel said on Monday.

(With inputs from agencies)