The Hindu Editorial Analysis- 28th May 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Chabahar’s Opportunities and Challenges

Why in News?

The recent signing of a 10-year contract between India and Iran for the operation of a terminal at the strategically located Chabahar port marks a significant milestone in India's efforts to expand its connectivity and influence in the wider Central Asian region. Under the pact, India will invest around USD 120 million to develop and operate the Shahid Beheshti Terminal in Chabahar besides offering a credit window of $250 million for infrastructure upgradation.

However, India's involvement in Chabahar Port faces challenges despite its strategic value. To succeed, India needs diplomatic finesse, infrastructure upgrades, and diverse connectivity options.

What is Chabahar Port Project?

• Chabahar Port: Deep-water port in Sistan Baluchistan province, Iran.
• Name Meaning: 'Four springs' in Persian.
• Geographic Importance: Located in open sea, providing secure access for large cargo ships.
• Historical Reference: Mentioned by 10th-century Iranian scholar Al Biruni as the entry point to the subcontinent.
• Proximity: Close to the Gulf of Oman and the Strait of Hormuz; about 550 nautical miles from Kandla port in Gujarat, India.
• Terminals: Comprises two terminals - Shahid Beheshti and Shahid Kalantari.
• India's Investment: Focused on the Shahid Beheshti terminal.
• Development Phases: Being developed in four phases.
• Capacity on Completion: Will reach 82 million tonnes per year.

What is the Timeline Related to the Development of Chabahar Port?

Geopolitical Shift and Trade Route Focus (1990s-2000s)

• 1990s: India strategically reoriented towards trade routes as a pivotal element of its geopolitical strategy.
• Late 1990s: India and Iran intensified cooperation in response to the rise of the Taliban in Afghanistan.

Early Engagement and Strategic Cooperation (2002-2003)

• 2002: India and Iran began discussions on developing Chabahar Port, aligning with India's economic needs and desire for alternative trade routes to Central Asia, bypassing Pakistan.
• 2003: India and Iran signed a strategic cooperation roadmap, including Chabahar Port development. However, the US designation of Iran as part of the "Axis of Evil" under President Bush exerted pressure on India, hindering significant progress.

Developmental Progress and Agreements (2010 Onwards)

• Early 2010s: India remained committed to Chabahar, investing in a 218-km road connecting Delaram, Afghanistan, to Zaranj on the Iran-Afghan border to improve access. Despite this, project development proceeded slowly.
• 2015: A breakthrough in negotiations between Iran and the P-5+1 powers enabled progress on Chabahar.
• 2016: India, Iran, and Afghanistan signed the Trilateral Agreement, establishing the International Transport and Transit Corridor and accelerating Chabahar's development.
• 2017: The first phase of the Shahid Beheshti terminal was inaugurated, marking a significant milestone. India sent its first wheat shipment to Afghanistan via Chabahar, showcasing the port's functionality.
• 2015: India Ports Global Limited (IPGL) was incorporated as a key player in Chabahar's development, aligning with India's strategic objectives.
• 2018: IPGL assumed control of Chabahar operations, significantly enhancing cargo handling and humanitarian aid through the port.
• 2021: Chabahar was used to supply environmentally friendly pesticides to Iran.

Current Development (Present)

• India and Iran signed a 10-year contract for IPGL to operate a terminal at Chabahar Port, underscoring India's long-term strategic and economic commitment to the port's development.

What is the Significance of Chabahar Port for India?

Counterbalancing China's String of Pearls Strategy

• China's Strategic Facilities: Locations include Chittagong, Karachi, Gwadar (Pakistan), Colombo, Hambantota (Sri Lanka), and Kyaukphyu (Myanmar).
• Potential Naval Bases: These commercial projects could become naval bases in a conflict involving India.
• Chabahar's Role: Acts as a strategic counterweight for India under the Necklace of Diamond Strategy, allowing monitoring of Chinese activities and disrupting the "String of Pearls" encirclement.

Ensuring Connectivity amid West Asian Turmoil

• Regional Conflicts: Yemen crisis and escalations between Iran and Pakistan have disrupted maritime trade routes.
• Alternative Route: Chabahar offers India a route that reduces dependence on chokepoints like the Strait of Hormuz.

Enhancing India's Role in the New Great Game

• Geopolitical Contest: Involvement of China, Russia, and the US in Central Asia.
• India's Position: Chabahar bolsters India's standing, leveraging its economic and strategic interests.

Facilitating India's Extended Neighborhood Policy

• Extended Neighborhood Policy: Aims to enhance India's influence beyond its immediate neighborhood.
• Strategic Gateway: Chabahar serves as a gateway to Central Asia, promoting India's soft power and economic influence.

International North-South Transport Corridor (INSTC)

• Key Link: Chabahar is crucial for the INSTC, reducing transportation time and costs for goods between India, Iran, Afghanistan, Russia, and Europe.
• Efficiency: Shipments through INSTC take 15 days less compared to the Suez Canal route, which has faced transit issues recently.

What are the Major Challenges India Faces with the Chabahar Port Project?

Navigating the India-U.S.-Iran Triangle

• U.S.-Iran Tensions: India's challenge is to ensure its investments in Chabahar do not lead to secondary sanctions from the U.S., risking broader economic and strategic ties with the U.S.
• New U.S. Sanctions: Following Iran's drone strikes on Israel, new sanctions increase the risk of companies avoiding involvement in Chabahar.

Unstable Political Environment in Iran

• Political Instability: Iran's internal conflicts and political instability can disrupt project continuity.
• Regional Instability: Ongoing conflicts, such as Israel's war in Gaza and disruptions to maritime trade in the Red Sea by Iran-backed groups, add to regional instability.
• Ease of Doing Business: Iran ranks 127th out of 190 countries, indicating a challenging business environment (World Bank).

Iran's Openness to China and Pakistan

• Chinese and Pakistani Investment: Iran remains open to investments from China and Pakistan in Chabahar alongside India.
• Chabahar-Zahedan Railway Project: India's withdrawal in 2020 was linked to Iran's exploration of a 25-year agreement with China, involving USD 400 billion for infrastructure development.

Reconciling Divergent Regional Priorities

• Regional Relations: India's involvement in Chabahar might strain relations with Saudi Arabia and Israel, who see Iran as a destabilizing force.

Environmental Concerns

• Ecosystem Vulnerability: The Gulf of Oman, where Chabahar is located, is delicate and vulnerable to pollution from increased shipping and potential oil spills.
• International Criticism: Environmental issues could attract international criticism and complicate project financing if not addressed proactively.

What Measures can India Adopt to Curtail Issues Related to Chabahar?

Multilateral Financing Mechanism

• Multilateral Financing: India could explore setting up a financing mechanism involving like-minded countries to fund the Chabahar project.
• Potential Partners: Countries like Russia and European nations interested in the International North-South Transport Corridor (INSTC).
• Risk Mitigation: A diverse group of investors could insulate the project from unilateral sanctions or political pressures.

Regionalize the Project

• Regional Participation: Transform Chabahar from a bilateral India-Iran initiative to a regional project.
• Involving Central Asia: Invite Central Asian nations to participate in the development and operation of the port.
• Mitigating Concerns: This could reduce concerns about Iran's destabilizing influence and ease tensions with neighboring countries.

Green Shipping Corridor

• Environmental Standards: Establish Chabahar as a "Green Shipping Corridor" by implementing stringent environmental standards.
• Green Technologies: Adopt green technologies and promote sustainable practices.
• International Support: Attract international support and financing from institutions focused on environmental sustainability, countering ecological concerns.

Digital Silk Road

• Digital Infrastructure: Leverage Chabahar to establish a "Digital Silk Road" in the region.
• E-Commerce and Data Flows: Develop digital infrastructure, promote e-commerce, and enable cross-border data flows along the INSTC.
• Tech Investments: Attract investments from technology companies, diversifying stakeholders and reducing reliance on traditional players affected by geopolitical tensions.

Soft Power Diplomacy

• Cultural Exchanges: Complement economic efforts with cultural exchanges and educational partnerships.
• People-to-People Initiatives: Engage countries along the INSTC route in people-to-people initiatives.
• Building Goodwill: Foster understanding, build goodwill, and ease geopolitical tensions impacting the Chabahar project.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Prelims

Q. What is the importance of developing Chabahar Port by India? (2017)

(a) India’s trade with African countries will enormously increase.

(b) India’s relations with oil-producing Arab countries will be strengthened.

(c) India will not depend on Pakistan for access to Afghanistan and Central Asia.

(d) Pakistan will facilitate and protect the installation of a gas pipeline between Iraq and India.

Ans: (c)