Great Chabahar Dream: India's Connect to Afghanistan and Beyond

Afghanistan Series

Though the broad parameters of the recent deal between Iran and P5+1 (US, UK, France, Russia, China, Germany) at Lausanne in Switzerland in the April 2, 2015 has been worked out, the devil lies in the details for implementation which is slated to be finalised by July 1.

Possible lifting of sanctions imposed on Iran by the Western powers coupled with the drawdown of NATO forces from Afghanistan should prompt India to speed up its development plans of the Chabahar port. It should be seen as an opportunity for India, which has so far been denied direct overland link to Afghanistan by Pakistan, to take up the development of Chabahar port with all sincerity and commitment.

India had earlier been harping upon the proposed International North-South Transport Corridor (INSTC) that would connect Nhava Sheva in Mumbai to Bandar Abbas in Iran and Amirabad in Iran to Astrakhan in Russia for onward shipment to Moscow. Since Bandar Abbas port is already congested and unable to handle heavy traffic load; Iran, therefore, planned to develop Chabahar port as a viable alternative. Also the proposed land and rail transit from Chabahar to Afghanistan and beyond would be more cost effective.

Further, there is another concern for India. It is China’s String of Pearls in the Indian Ocean and more particularly its presence in the Gwadar port in Pakistan. Taking advantage of India’s slackness in developing Chabahar port, China had also offered investment of about $78 million way back in July 2013 to upgrade this deep sea port. Beijing has signed an agreement with Pakistan for a multi-billion dollar LNG pipeline and terminal. The same would be extended from Gwadar to Iran for gas import when sanctions on Tehran are lifted. China sees the prospect of linking Gwadar to Xinjiang, roping in Central Asian Republics.

Chabahar port was part of a plan to develop infrastructure in eastern Iran for many years. It was put on hold in 1984 and revived in 2002 with India assuring assistance. But as US mounted pressure on India and made efforts to toughen international sanctions against Iran, India practically ceased its construction work at Chabahar port. However, when a Chinese state-owned company took over the administration of Gwadar port from a Singaporean firm in 2012, India resumed work at Chabahar the same year with partners from about 12 countries from Central Asia, Gulf and Europe. Apart from $100 million investment in Chabahar, New Delhi has completed a 200 km road from Iran’s border town Zaranj to Delaram in Afghanistan. It defied US objections to transport 100,000 tonne wheat to Afghanistan through Chabahar port.

After the new government led by Prime Minister Narendra Modi assumed office, India in October last year decided to invest $85.21 million in developing the port. It also decided to invest an annual revenue expenditure of $22.95 million to support the efforts.

India needs to tackle the geopolitics in the region with a view to go ahead with its Chabahar plans. Following the earlier agreement between P5+1 and Iran, there has been only limited easing of trade restrictions on strategic items like petrochemical products, aircraft parts and precious metals accounting for $7 billion of trade over six months, subject to Tehran’s implementation of its assurances.

Lausanne Deal and Iran

The recent interim deal with Iran and the Western powers has given Tehran a chance to come out of its economic isolation. Iran has been facing a series of sanctions imposed by the UN Security Council since 2006, on the basis of IAEA reports related to its non-compliance with its safeguards agreement under the Nuclear Non-Proliferation Treaty. Further sanctions were imposed by the European Union and the US. However, Iran remained adamant maintaining that its uranium enrichment and reprocessing was not for development of arsenals but for peaceful uses. The Western powers were sceptical about this assurance.

Several attempts were made in the past, both back channel and open negotiations, including the Geneva Accord of November 2013, to resolve the issue. Hopes were raised after the election of Tehran’s one-time nuclear negotiator, Hassan Rouhani, as Iranian President in June 2013. The US pushed for a deal with Tehran to end the impasse.

Though the broad parameters of the recent deal between Iran and P5+1 (US, UK, France, Russia, China, Germany) at Lausanne in Switzerland in the April 2, 2015 has been worked out, the devil lies in the details for implementation which is slated to be finalised by July 1.

What has been achieved at Lausanne was to not to deny Iran of its uranium enrichment, but to delay its programme. It will not produce or house any fissile material for at least 15 years. It will reduce its installed enrichment centrifuges from 19,000 to 6,000, only 5,000 of which will be spinning – all being first-generation centrifuges – and none of its more advanced models can be used for at least 10 years. Fordow, the enrichment facility buried deep within a mountain, will be turned into a physics research centre. The nuclear programmes would be subjected to IAEA inspections. But, on the conditions for lifting of sanctions both the US and Iran have given out ‘duelling’ factsheets.

Likely Resurgence of Iran

The phasing out of sanctions will help Iran to develop economically and project it as an effective regional power. In the current situation of Shia-Sunni divide in West Asia and North Africa, the Shias in the region look upon Iran as their natural leader. Iran is supporting the al-Assad regime in Syria and Shia group in Iraq. Sunni-dominated Saudi Arabia is perturbed over the overthrow of Yemeni President Abed Rabbo Mansour Hadi by Houthi rebels reportedly backed by Iran. It is also perturbed over Iran gaining support in its Eastern Province and in Bahrain. Riyadh, therefore, is in no mood to tolerate a resurgent Iran.

Several analysts believe that after the Lausanne deal comes into effect, Washington may gradually distance itself from its Saudi Arabian ally and play a more balancing role between the Shias and Sunnis in the region. Riyadh is, therefore, not pleased over the Lausanne deal that may pave the way for a resurgent Iran. Israel, too, has made open its reservations over the deal, but President Obama has emphasised that US will ensure that the existence of Israel is not endangered. Thus in the days to come, a new balance of power is likely to emerge in the region between Saudi Arabia and Iran.

Iran has so far been able to silence the hardliners at home over its deal with P5+1. Iranian Revolutionary Guards Corps are supportive of the deal, but supreme leader Ayatollah Ali Khamenei still has the last say. He has said, “What has happened so far neither guarantees a deal - or talks leading to a deal.” Perhaps this is to pacify the hardliners. In fact, Iran does not stand to lose if its nuclear enrichment is put on hold. It would gain much if sanctions are lifted.

But for the deal to be a success, President Obama faces the challenge of Republican hawks in getting it ratified by the Congress for lifting of sanctions. If all goes well and an amicable settlement for implementation of the deal is reached by July 1, 2015, all sanctions on Iran will be lifted and the country will be on a path to economic recovery. India will benefit immensely in the process.

Region’s Geo-Politics

Even after withdrawal of its troops from Afghanistan, US ambition in the region has not yet faded away. New Delhi, therefore, faces the challenge of cleverly playing its diplomatic cards to win US confidence. Washington had earlier pressurised Musharraf regime in Pakistan to favour a Singaporean firm over the Chinese in operating the docks at the Gwadar port. Later, the Singaporean firm backed out paving the way for the Chinese.

However, Washington is not pleased with the growing Chinese presence in the region and its ambition to play an important role in Afghanistan. The US has no option but to see a more proactive Indian involvement but at the same time it would not like Iran gaining importance in the region. India also needs to strengthen cooperation with Russia, which is interested to play an effective role in Afghanistan.

Tehran feels the necessity of having a deep sea port at Chabahar as its Bandar Abbas port on the Strait of Hormuz, though strategically located, is unable to handle high traffic load. Bandar Abbas that handles 85 percent of Iran’s seaborne trade can only receive 100,000 tonne cargo ships. As most shipping is conducted through 250,000 cargo vessels, the cargo are first offloaded in UAE port and then sent in smaller ships to dock in Bandar Abbas. This results in Tehran’s outgo of hundreds of millions of dollars to UAE. Tehran also faces the possibility of UAE closure of this facility in case of a conflict between Iran and the UAE or GCC countries and their Western allies. Iran is also conscious of the presence of US naval patrol in the area.

Similarly, Pakistan is interested in developing Gwadar as Karachi port is already heavily loaded with serious congestion from commercial fishing, civil and military shipping. It also fears that Indian Navy may target Karachi port in case of a conflict. China has stepped in to gain advantage in the Indian Ocean.

The distance between Chabahar and Gwadar is only 72 km. Both these ports with appropriately planned road and rail connectivity can offer trade facilities to landlocked Central Asian countries and even extend the facilities to Gulf countries, Russia and Europe.

Regarding implementation of the work, Chabahar stands at a more advantageous position than Gwadar. Gwadar is among the worst under-developed districts in Pakistan. The local Baluchis are up in arms against this mega project and this has led to the killings of Chinese engineers. The Balochistan National Party-Mengal, Baloch National Front, Baloch Republican Party and militant organisations like Balochistan Liberation Front, Balochistan Liberation Army and Balochistan Republican Army are among those who oppose the deal with China. This situation has delayed the work on the Gwadar project.

Comparatively, the Chabahar project is more or less hassle-free. The proposed road and rail link bypasses Pakistan and connects with Afghanistan. However, its success will depend on the security situation in Sistan-Balochistan province where it is located and subsequently in the rail and road links in Afghanistan that connects to Central Asia. Further, Iran has been successful in capping any possible insurgency in Sistan-Balochistan.

India stands to benefit much from the Chabahar project, not only in terms of its trade connectivity with Afghanistan, Central Asia and beyond, but also in terms of easier access to oil and gas in the region. India and Iran plan to establish direct shipping between Chabahar and Mumbai and Kandla. The proposed North-South and East-West corridors and rail links will further facilitate trade.

India, should, therefore take up the Chabahar project with utmost sincerity and commitment and play its cards wisely in the geopolitics in the region.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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