Chabahar Port

Boats anchored in Chabahar Bay.

The port of Chabahar is located on the Makran coast of Sistan and Baluchistan Province, 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. Being close to Afghanistan and the Central Asian countries of Turkmenistan, Uzbekistan and others, it has been termed the "Golden Gate" to these landlocked countries.[15]

Chabahar is 700 km (430 mi) away from Zahedan, the capital of the Sistan and Baluchistan province, 950 km (590 mi) away from Milak, the closest city to the Afghan border, and 1,827 km (1,135 mi) away from Sarakhs on the Turkmen border.[15]

The marine distance to Dubai is 353 nautical miles (654 kilometres; 406 miles), to Karachi in Pakistan is 456 nmi (845 km; 525 mi), and to Mumbai in India is 843 nmi (1,560 km; 970 mi) .[16] Pakistan's Chinese-funded deep sea port at Gwadar is also on the Makran coast, at a distance[17] of a mere 76 nautical miles. Gwadar also claims to provide access to Central Asia, and comparisons between the two ports are frequently made by analysts.[18][19][20]

Because 90 percent of Iran's population is concentrated in the western part of the country, the eastern part is relatively less developed. Iran is intending to change that with the development around Chabahar port, with a free trade zone and road and rail links between Chabahar and Central Asia. Its plan is to use Chabahar port as the gateway to Central Asia and to maintain the Bandar Abbas port, which currently handles 85% of Iran's seaborne trade, as a hub for trade with Russia and Europe.[15]

The highly congested Bandar Abbas port is not a deep water port and cannot handle the 250,000-ton oceangoing cargo ships. At present, such ships dock in the United Arab Emirates (UAE) and the cargo is transferred to smaller, 100,000-ton ships for onward shipment to Iran. This makes Iran dependent on the UAE for shipments and represents a loss of revenue. Unlike Bandar Abbas, Chabahar has the ability to handle standard cargo ships.[21][22]

Chabahar Port benefits from the protection of the Armed Forces of the Islamic Republic of Iran military bases located in Konarak, Iran, across Chabahar Bay to the West.

A former port named Tis in Chabahar's neighborhood dates back to 2500 BC, known during Alexander the Great's conquests. Alberuni wrote that the sea coast of India commences with Tis.[23] The Portuguese forces under Afonso de Albuquerque gained control of Chabahar and Tis, staying there until 1621. The British, and later the Portuguese in the 17th century entered this region.[24]

Modern Chabahar dates back to around 1970, when it was declared a municipality, and large port projects were started by order of Mohammad Reza Pahlavi, the Shah of Iran. The Shah planned to construct a $600 million naval base at Chabahar, mostly employing American companies as contractors. The American naval officials held talks with their Iranian counterparts on securing an "option" to operate out of Chabahar in the event of an emergency.[25] However, in 1977, the Shah got strapped for cash, caught in a tug of war between the OPEC and western oil companies over oil prices, and the construction of Chabahar base was postponed. Soon afterwards, the Shah was overthrown in the 1979 Iranian revolution.[26]

Port of Chabahar

After the Iranian revolution, the foreign companies left the projects and Iranian public companies linked to the Ministry of Jahad-e Sazandegi (or jihad for construction) took them over. The Iran–Iraq War (1980–1988) caused Chabahar to gain in logistical and strategic importance. War brought insecurity to the Strait of Hormuz and ships were unable to enter the Persian Gulf. Accordingly, Chabahar became a major port during the war.[27]

The Chabahar port actually contains two separate ports called Shahid Kalantari and Shahid Beheshti. Between 1982 and 1983, Iran constructed four 45 meters (150 feet) berths at Shahid Kalantari and four 150 meters (492 feet) berths at Shahid Beheshti.[24][28] Two larger berths, 235 meters (771 feet) and 265 meters (869 feet) meters long, were constructed in 1997 and 2004 respectively.[28]

The India–Iran–Afghanistan three-way memorandum of understanding (MoU) plans have committed at least $21bn to Chabahar–Hajigak corridor,[29] including $85m for Chabahar port development by India,[30] $150m line of credit by India to Iran,[30] $8bn India-Iran MoU for Indian industrial investment in Chabahar Special Economic Zone,[31] $11-billion Hajigak iron and steel mining project awarded to seven Indian companies in central Afghanistan,[31][32] and India's $2bn commitment to Afghanistan for developing supporting infrastructure including the Chabahar-Hajigaj railway,[32] with potential for several times more trade via connectivity to 7,200-km-long multi-mode North–South Transport Corridor (INSTC) connecting to Europe and Turkey, R297 Amur highway and Trans-Siberian Highway across Russia,[33] and planned Herat to Mazar-i-Sharif railway providing access to Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan.[33] Chabahar Port also provides direct access to India's Farkhor Air Base in Tajikistan.[34] Chabahar route will result in 60% reduction in shipment costs and 50% reduction in shipment time from India to Central Asia.[35]

North-South Transport Corridor (NSTC).

Consistent with its desire to be seen as a significant regional player, Iran has taken the initiative to engage with all the neighbouring countries to enhance the transit potential of Chabahar. It has signed a memorandum of understanding (MoU) with Afghanistan and Tajikistan on the construction of railway lines, water pipelines and energy transmission lines. It has been keen to extend the Khvaf-Herat rail line to connect to the railways of Central Asia, Turkey, and Europe. It has entered into an agreement with Oman, Qatar, Turkmenistan and Uzbekistan to establish a transport corridor between these countries. It is also a key partner in the International North-South Transport Corridor (INSTC) along with Russia, Ukraine, Turkey, Oman, Syria, India and the Central Asian countries, which aims to connect South and Central Asian countries to Northern Europe via Iran and Russia. Specifically with respect to Chabahar, Iran has envisioned it as a key port in linking India with Afghanistan and Central Asian countries. Initiatives in this regard include a roadway from Chabahar to Milak on the Afghanistan border, Chabahar-Faraj-Bam railway, Chabahar-Zahedan-Mashhad rail link, which will be further extended to Herat and Mazar-e-Sharif in Afghanistan and Termez in Uzbekistan.[36] Iran also plans to build the Iranrud, a Suez canal like canal through Iran to connect the Caspian sea with the Persian gulf.

India-Iran-Afghanistan transport corridor map

In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabar Special Economic Zone, including an aluminium smelter and a urea making facility, at Chabahar port is being developed was a transit route to Afghanistan and central Asia.[31] India has already built a 240-km road connecting Afghanistan with Iran.[31] Also in planning is a rail route connecting Chabahar with the India-promoted $11-billion Hajigak iron and steel mining project in central Afghanistan,[31] as seven Indian companies in 2011 acquired rights to mine central Afghanistan's Hajigak region, which contain Asia's largest deposit of iron ore.[32] The Government of India has pledged to Afghanistan to spend $2bn in developing supporting infrastructure including Chabahar to Hajigaj railway.[32] All this will bring cargo to Bandar Abbas port and Chabahar port, and free Kabul from its dependence on Pakistan to reach the outer world, giving India access to Afghanistan and beyond to Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and Europe via 7,200-km-long multi-modal North–South Transport Corridor (INSTC).[31]

During the 1990s Iran and India, along with Russia, collaborated in backing the Northern Alliance in Afghanistan against the Pakistan-backed Taliban. At this time, Iran invited India to develop the Chabahar port to obtain ready access to Afghanistan.[37][38] In 1997, a trilateral agreement was signed with Turkmenistan to expand trade into Central Asia and, in 2000, another agreement with Russia to provide seamless transport between India and Europe via an International North-South Transport Corridor.[39]

After the American presence in Afghanistan, India, Iran and Afghanistan got together in January 2003, agreeing on a joint development of transportation links to Afghanistan. India agreed to expand the Chabahar port and to lay a railway track between Chabahar and Zaranj. Iran has completed 70 percent of the first phase of the Chabahar project at a cost of $340 million.[40] India has spent $134 million during 2005–2009 to construct a road from Delaram in Afghanistan to Zaranj at the Iran-Afghanistan border.[41] Iran has also built a roadway between Milak, close to Zaranj, and Chabahar passing through Zahedan and Iranshahr. Through Milak, Zaranj and Deleram, connectivity has been established to the Afghan `garland road', which connects the major Afghan cities Herat, Kandahar, Kabul and Mazar-e-Sharif.[42] In March 2012, ships from India docked at Chabahar carrying 100,000 tonnes of wheat under humanitarian aid to Afghanistan.[43] The Afghan businesses have begun to shift from the Karachi port to Chabahar port for transit.[44]

However, without further development of the Chabahar port, these road links would remain underutilized.[42] Despite intentions, India's involvement in the infrastructure development within Iran has been minimal, possibly due to the Western pressure to apply sanctions. Iran is also believed to have a shown a preference for Iranian contractors instead of Indians.[45][46] The initiative was restarted in August 2012 in a trilateral meeting on the sidelines of a Non-Aligned Summit.[45]

May 2016 Transit Trade Agreement between India, Iran, and Afghanistan

"This is a very, very crucial agreement for Afghanistan. The opening of this corridor will help us to fully reach our potential, give us a new trade route. This is a completely new chapter".
— Shaida Abdali, Afghan ambassador to India, April 2016.[46]

Afghan President Ashraf Ghani, Indian Prime Minister Narendra Modi, and Iranian President Hassan Rouhani at the signing of the trilateral transit agreement between the three countries in May 2016.

In May 2016, India signed a series of twelve memoranda of understanding which centered upon the Port of Chabahar.

The trilateral transit agreement signed by India, Iran and Afghanistan allows Indian goods to reach Afghanistan through Iran. It links ports in the western coast of India to the Chabahar port and covers the road and rail links between Chabahar and the Afghan border.[47]

The bilateral agreement between India and Iran gives India the right to develop two berths of the Chabahar port as agreed in 2015 and allows them to be operated for 10 years by India Ports Global, a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust, in partnership with Iran's Aria Banader.[48] India Ports Global has guaranteed handling of 30,000 TEUs by the third year of operations, and aims to eventually handle 250,000 TEUs.[49]

The berths will be developed at a cost of $85 million over the course of 18 months.[50] Under the agreement, India Ports Global will refurbish a 640 meters (2,100 feet) long container handling facility, and reconstruct a 600 meters (1,970 feet) long container handling facility at the port.[5] India Ports Global will modernize ancillary infrastructure by installing four rail-mounted gantry cranes, sixteen rubber-tire gantry cranes, two reach stackers, two empty handlers, and six mobile harbor cranes.[51] Upon completion of upgrade works agreed to in the May 2016 agreements, Chabahar's capacity will be increased to 8 million tons from the current 2.5 million ton capacity.[4]

The investment is supplemented with a $150 million credit line to Iran through the Exim Bank of India.[47][52] India has also offered to supply $400 million worth of steel towards the construction of a rail link between Chahbahar and Zahedan.[30] Indian commitments to Iranian infrastructure could total $635 million as per the twelve memoranda of understanding signed in May 2016.[53]

As per the deal, India will also be developing various industries, including aluminum and urea production plants, in the Chabahar economic zone attached to the port.[54]

Iran's ambassador to Pakistan, Mehdi Honerdoost stated that Pakistan and China had both been invited to contribute to the project before India, but neither China nor Pakistan had expressed interest in joining.[55][56]

On 29 October 2017, the trilateral transit trade and route was implemented when the first shipment of wheat was sent from India to Afghanistan via Chabahar.[57]

Chabahar–Zahedan-Bam-Hajigaj Railway

See also: Rail transport in Afghanistan § Chabahar-Hajigak rail

Existing Iran railway network in 2006, Zahedan-Bam-Mirjaveh railway is already complete and operational

India had initially proposed a plan to construct a 900-km Chabahar-Zahedan-Hajigak railway line that would connect Chabahar to the mineral-rich Hajigak region of Afghanistan.[58][59] In 2011, seven Indian companies acquired rights to mine central Afghanistan's Hajigak region, which contain Asia's largest deposit of iron ore. The Government of India had pledged to spend $2bn in developing supporting infrastructure.[32] In May 2016, a MoU was also signed for financing of the planned Chabahar–Zahedan railway section of Chabahar–Zahedan-Hajigak railway,[60] as part of North–South Transport Corridor, by Indian Railway's public sector unit Ircon International.[61]

India had offered to supply approximately $400 million worth of steel towards the construction of this railway,[62] as well as offered to finance construction of the Chabahar to Zahedan rail line at a cost of $1.6 billion.[63] India began shipping rail tracks worth US$150 million in July 2016, and in December 2016 Iran also allocated US$125 million toward this rail route.

However, on 14 July 2020, Iran announced that it would be proceeding with constructing the Chabahar-Zahedan railway independently, citing delays in the Indian funding as the reason for dropping the partnership.[64] The Iranian government has projected completion of the rail link by March 2022, utilising the Iranian National Development Fund to complete the project.[64]

Chabahar's connection to the country's railway plan is under study and consideration. A rail link between Chabahar and Zahedan, when completed, can connect Chabahar to the Kerman–Zahedan railway and further to the Trans-Iranian Railway.[65]

American policy analyst Rorry Daniels has characterized both the Indian investment in Chabahar and the Chinese investment in Gwadar as generating perceptions of "strategic encirclement". According to her, China fears encirclement by the US, India by China, and Pakistan by India. All of these encirclements are seen by the respective countries as "containment strategies", which they attempt to break out of.[18] Indian news commenter Shishir Gupta described India's Chabahar Port deal as "a counter to the China-Pakistan Economic Corridor," as it has "broken through the strategic encirclement by China and Pakistan."[81]

Scholar Neil Padukone however disagrees that India has a goal of encircling Pakistan.[82] India needs access to iron from Afghanistan's Hajigak mine and other natural resources from the Central Asian countries of Kazakhstan, Turkmenistan, and Uzbekistan, which is made possible by the Chabahar port. But, in the long run, the pipeline-to-road-to-rail-to-sea-to-road shipment costs through Chabahar should be circumvented by direct transit through Pakistan. So far, Pakistan has been reluctant to provide such access.[83] The US State Department does not currently see military cooperation between Iran and India as part of the Chabahar project, although it has cautioned India to remain within the legal parameters with respect to collaboration with Iran.[84] The US also sees the Indian presence in greater Central Asia beneficial for spreading the soft power of democratic and friendly regimes.[18] India hopes to see the Western countries use the Chabahar route to link to Afghanistan and reduce their dependence on Pakistan.[85]

Padukone agrees that India has need for establishing a "naval counterweight" to China's presence in Gwadar,[82] as India sees the Gwadar Port as a manifestation of a strong China–Pakistan alliance that seeks to choke Indian investments in the Indian Ocean region.[18] Scholar Christophe Jaffrelot states that Gwadar gives the Chinese a key listening post to monitor US and Indian naval activity in the Persian Gulf as well as a dual-use civil-military base for Chinese ships and submarines. India perceive a direct threat and its response has been to help build the Chabahar port.[19]

Iran has stated that Chabahar is not a rival to Pakistan's Gwadar and invited Pakistan to join in its development. Pakistani analysts have endorsed the view, stating that Gwadar has an advantage by being a deep sea port and the expansion of Chabahar would in fact expand trade through Gwadar. Larger vessels that cannot dock at Chabahar could dock at Gwadar and the cargo transshipped to Chabahar.[86] Pakistan's foreign policy advisor Sartaj Aziz has signalled that Pakistan may link the Gwadar port to Chabahar.[87]

However, in 2016, a retired Pakistani military officer characterized cooperation between India, Iran, and Afghanistan as a "security threat to Pakistan", that had "ominous and far-reaching implications" to the region. He also bemoaned the country's increasing "isolationism" and blamed what he called the “inaction” of the Foreign Office of Nawaz Sharif's government.[88]

In light of trade restrictions imposed on Iran by USA, India had reduced oil imports from Iran, but USA has not intervened directly in the port's development because "conservative analysts in (Washington) DC have accepted the fact that India will maintain some form of relationship with Iran, Iran is more about a transport corridor to Afghanistan; that it has no interest in advancing Iran's agenda in the Middle East; and that whatever space India evacuates there will be filled by China", South Asia expert at "The Heritage Foundation" in Washington Jeff Smith said in November 2017.[57]

Chronic instability in Afghanistan may limit the usefulness of Chabahar as a conduit to Afghanistan and Central Asia.[89] Road networks between Chabahar and Afghanistan rely upon connections to the Afghan Ring Road.[90] In August 2016, insurgent activity by Afghanistan's Taliban militant group forced closure of the Ring Road between Kandahar and Helmand Province. [91]

Iran's Sistan and Baluchestan Province, in which Chabahar port is located, is also the stage for insurgent activity by the insurgent group Jundallah, which claims to be fighting for the rights of Sunni Muslims,[92] and the local ethnic Baloch.[93] In 2010, Jundallah militants dispatched a suicide bomber to a Shi'ite mosque in Chabahar, killing 38 people.[94]

• India's plan to develop key Iranian port faces U.S. headwinds, Reuters, 9 June 2017.

• Afghanistan rail network

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