Importance of Chabahar Port Deal for India

port

A historic trilateral contract has been signed between India, Iran and Afghanistan for the establishment and benefit of transport and transit corridor among the three countries.

The deal was signed by Prime Minister Modi at the visit where he met Iran’s President Hassan Rouhani and Afghan President Ashraf Ghani.

Construction of the Chabahar port will happen in 2 phases. Construction of the port will be done by India Ports Global Private Limited (IPGPL) and Iran’s Ports and Maritime Organization (PMO). A agreement has been signed between them. India is doing an investment of $5oo Millions to construct this port.

Chabahar is located in the Gulf of Oman on the border with Pakistan and is just less than hundred kilometers from the Pakistani border city of Gwadar where China is developing a port to groom Pakistan as the gateway to Central Asia. Chabahar is Iran’s closest access point to the Indian Ocean.

Importance of Chabahar Port to India

The Chabahar as a transit point will be the center of a regional trade, investment and transportation hub with links from the Indian Ocean to Central Asia. For the first time in the history, India will get access to the region through friendly nations.

(1) Chabahar and its road connectivity to Central Asia

From Chabahar port, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 km from the port. The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan’s Garland highway, setting up road access to four major Afghan cities –Herat, Kandahar, Kabul and Mazar-e-Sharif. Mazar e Sharif is near to Uzbekistan.

(2)  Politically sustainable connectivity between Afghanistan & India

The Chabahar-Zahedan-Zaranj corridor is a potential game-changer for regional connectivity, as it gives an alternative access for Afghanistan to India via the sea. This connectivity will enhance the development nature of economic engagement between the two countries.

(3) Dependency on China sponsored Road and Belt projects to connect with Central Asia will get reduced

At present, central Asia is getting lot of connectivity projects sponsored under the China sponsored Road and Belt Policy. India is not a part of the endeavor and in this context, an own initiative will help India to avoid dependence on China sponsored Central Asian connectivity.

As the West imposed ban on Iran has ended, there will be more expansion of Iran bound trade. India has increased its crude purchase from Iran ever since the end of the ban.

With reducing remittance attraction and reciprocal commitment with Arab countries, Iran may get a higher role in India’s economic engagement.

Hence, in future, there is higher scope and benefit for mutual trade between the two countries and the new port deal is very important as a trade facilitator.

Source : Indian Economy