The Chabahar minefield

It was late February in 2019. Tehran was emerging from its harsh winter when a sizeable business delegation from the Confederation of Indian Industry (CII) touched down there. The delegation was in Iran to participate in the Chabahar Day celebrations, signalling the importance both New Delhi and Tehran attached to the development of this strategically-located port overlooking the Gulf of Oman. Chabahar is not too far away from the western Indian coastline and is close to the Strait of Hormuz, a vital global trade route. Its proximity to the Chinese-built Gwadar port in Pakistan also makes it important for India. 

The CII delegation travelled to Chabahar in Iran’s Sistan and Baluchistan province where Tehran showcased what it had to offer – the port as a transhipment hub, with the added incentive of a free trade zone there. But with US sanctions on Iran having hobbled the port’s development, the delegation members had their misgivings about using it as a business hub.

Five years on, it’s the very same threat of sanctions that could play spoilsport in New Delhi and Tehran’s ambitious plans to give a further push to develop Chabahar, for which the two nations recently signed a 10-year contract. Until the signing of this pact for the Shahid Beheshti terminal at Chabahar, India Ports Global Limited (IPGL) and Iran’s Ports and Maritime Organisation (PMO) would sign only short-term contracts for Chabahar’s development. New Delhi also committed a $250 million Line of Credit for the project, apart from having promised investments worth $120 million for infrastructure development. 

While there is obvious delight on both sides on the inking of the pact, the hosannas will have to wait. For, the US has already warned of the “potential risk of sanctions” on this deal. India, of course, will hope for a sanctions waiver. Earlier, it had got a “narrow waiver” from the sanctions by the Trump administration on grounds of providing humanitarian assistance to Afghanistan via Chabahar. Nevertheless, the port’s development was severely impeded, with even buying equipment for the port proving difficult. 

Within days of the signing of the recent contract, Iranian President Ebrahim Raisi, who was pushing to fast-track the project, died in a chopper crash, along with Iran’s Foreign Minister Hossein Amir Abdollahian. The consequent change in leadership is, however, not expected to alter the course of Iran’s foreign policy. But as Iran prepares for a snap presidential election to elect a successor to Raisi, and the country goes through a period of leadership transition, India, like the rest of the world, will be keeping a close watch on the developments there. The ongoing Israel-Hamas conflict, with Iran backing the Palestinian outfit, shows no sign of abating. A waiver from US’ Iran sanctions for India’s Chabahar project may be hard to come by in this circumstance. 

Delhi, therefore, will have to work doubly hard to convince Washington. Else, the effort to boost regional connectivity will be stymied. For now, India is banking on its pitch that the Chabahar project will benefit the region as a whole. However, the US may have a different view, having exited from Afghanistan and in no mood to assist the Taliban regime there. 

For India, a lot is at stake in the project, apart from the money it’s pouring into it in the hope that it will take-off and be viable. With Pakistan being recalcitrant on giving India access via the land route, Chabahar is vital to Delhi’s efforts to have access to Afghanistan, the landlocked Central Asian countries, and beyond up to St Petersburg in Russia via the International North-South Corridor (INSTC). The INSTC project, backed by India, Iran and Russia, however, remains a daunting one. The continuing Russia-Ukraine war, and the consequent nose-dive in Moscow’s relations with European countries, is a further setback
for this ambitious connectivity project. 

The bid to lend a fresh impetus to Chabahar also signals India’s desire to maintain close ties with Iran despite what is seen as its marked shift to the US camp and closeness to Israel. Delhi knows well it cannot slacken its strategic moves in West Asia. While Tehran has been unhappy about Delhi’s decision to stop all oil imports from Iran due to the US sanctions, the two sides have managed to maintain cordial ties. 

In the geopolitical battle for influence in the region, Iran’s close friend China has stepped in to not only buy oil from the sanctions-hit country but also to emerge as its largest trading partner. In 2021, Beijing also promised Tehran $400 billion in investments over a period of 25 years. In such a scenario, only time will tell whether India’s renewed push for Chabahar will bear fruit. 

(The writer is a senior journalist based in Delhi)