January 23, 2018

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Chabahar port phase-I opens, to boost India-Iran trade

05 December 2017

Iran is believed to have asked the Indian government to "manage" or operate the first phase of the port until work for the second phase is finalized. India committed up to $500 million for the development of the Chahabar Port along with associated roads and rail lines. On the inauguration of Chabahar port India said this construction will contribute to regional trade and provide Afghanistan with global market alternative access.

So why is Chabahar a key project for India? Speaking at the event, however, Iran's president said regional rivalries should give way for "more engagement and unity" in the region. "We should go after competition", he said. Interest in the project was rekindled in 2013 after Iran and the US, UK, France, Russia, China and Germany reached an interim agreement on Tehran's nuclear programme and some sanctions were lifted. For years, New Delhi has been trying to persuade Pakistan to allow it to transport goods to Afghanistan using the land route-i.e, through its soil into the landlocked country.

"In effect, Pakistan has emerged as the largest wall in history, inhibiting connectivity between India and Afghanistan". But, given the fact that the USA is now India's close ally and Russian Federation too stands to gain from the trade routes, it is fair to assume that both Pakistan and China won't indulge in disruptive activities. The shipment is to be taken by trucks to Afghanistan from Chabahar. "For them to carry goods to Afghanistan via Pakistan is either impossible because of security concerns or it is subject to excessive costs".

Over a month ago, India sent the first consignment of wheat to Afghanistan through Chabahar Port, which Swaraj remarked as a gift from Indians to Afghans.

In a major step forward, the first phase of Iran's Chabahar port, which holds significant strategic and economic importance for India, was launched on Sunday.

He emphasised that the project was specifically important, given that it connects the trade corridors that pass through Iran to the sea route. And with India steadily improving ties with East Asian countries, this may end up becoming a new worldwide trade route that will counter the China-led Belt and Road initiative.

Once two-thirds of this capacity is realised, five other jetties will be built to increase the capacity of the port to 82-85 million tonnes. Besides bilateral issues, Swaraj and Zarif are understood to have had discussions on regional and political developments in the Gulf region. The port is expected to be operational by the end of 2018. With a hostile neighbour like Islamabad blocking access to Central Asia, New Delhi's presence in the region for trade purposes had been extremely limited.

Chabahar port phase-I opens, to boost India-Iran trade