Chabahar: A good project for India, Iran and the Region, but the Geopolitics?

By Mahendra Ved

India is again on the back foot regarding its cooperation with Iran on the strategic Chabahar project. Within hours of announcing the much-awaited agreement this month under which India would operationalise the Chabahar project along the Iranian coast, the United States said that there could be ‘consequences’ for India. This is not the first signal and needs to be placed in regional and global contexts.

The US sees India as an ally, but Iran as an adversary in the conflict-ridden West Asian region, particularly due to Teheran’s diplomatic and geographical proximity with Moscow.

So far, India has the advantage of dancing in both camps as the US-led camp sees it as a bulwark to China in the East and a destination for investment. But for how long? India may have to take sides if push comes to shove as in this new chapter of the Cold War. Every nation, big or small, must choose sides. Like last century’s “non-alignment”, the era of exercising “strategic autonomy” also change if not end soon.

Whether Joe Biden wins this year’s American election or Donald Trump, the US wants to reduce Russia’s power. It is also making desperate efforts to contain China to retain global supremacy, whereas Russia and China have come closer, dividing the world into two rival camps.

This context impacts many nations and their ambitious projects. The long-delayed Chabahar may suffer further delay. The writing on the diplomatic wall is that India will have to exercise extreme caution while dealing with Iran or any nation or entity that the US does not like.

India and Iran conceived the Chabahar project in 2013. India unveiled plans to develop this port on Iranian east coast in the Sistan-Baluchistan province, overlooking the Gulf of Oman. It is the nearest Iranian port for India, closer than Bandar Abbas, which lies on Iran’s West coast.

Though the original intent behind the port was to bypass Pakistan in accessing Afghanistan, it was also meant to counter the China-developed Gwadar, 170 kilometres away. The latter is part of Beijing’s China-Pakistan Economic Corridor (CPEC), a flagship project under China’s ambitious Belt and Road Initiative (BRI). With Beijing’s rising influence in South Asia and the Indian Ocean – most recently highlighted in events in the Maldives – the Iranian port takes on an entirely new salience.

The signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015 between Iran on one hand and the US, UK, France, Russia, China, Germany, and the European Union on the other eased the way for India to commit to the development of the Shahid-Beheshti terminal of the Chabahar port. When Prime Minister Narendra Modi visited Tehran in 2016, he earmarked $500 million for the work. A trilateral agreement between Iran, India and Afghanistan on the ‘Establishment of International Transport and Transit Corridors’ was also signed to facilitate the movement of goods between India and Afghanistan. Since 2018, the port’s operations have been managed by the New Delhi-backed India Ports Global Limited (IPGL).

In August 2017, India’s Transport Minister Nitin Gadkari announced that “the civil work at the Chabahar port developed by India was complete and the Indian government was ordering INR 400 crores (US $63 million) worth of mechanised equipment and cranes. The port will be operational in 2018 to export Indian wheat to Afghanistan.” After meeting with then-Iranian President Hasan Rouhani, he said: “Now, we are building a railway line in Iran. From Chabhar, we can go to Afghanistan, Uzbekistan and Russia.”

This was done under a Trump-era waiver. The then-US President understood the importance of Chabahar and a corridor to Afghanistan. Two points arise: have the US priorities changed after it evacuated from Afghanistan? Will Chabahar’s push come if Trump gets elected and retains the same perspective? There are no easy answers, but a delay in the Indian plans is definite.

The intervening period seen India ending its Iranian oil imports. If Iranian oil is the issue, another major buyer – China – imports large volumes of Iranian oil. For India, the Russian oil at concessional rates in the wake of the Ukraine conflict came as a boon, but again, the US and its European allies constantly criticised India. Today, India has saved USD 7.9 billion thanks to these imports. But it has meant a constant diplomatic fight.

This time round, the US reacted after the ceremony in Tehran attended by Minister Sarbananda Sonowal.

At first, the foreign office and then the External Affairs Minister S. Jaishankar, stressed that the project would benefit a large region, not just India and Iran, and that it was key to access landlocked Afghanistan and beyond it to Central Asia.

The US recognises this but seems unready to allow anyone to cooperate with Iran. The raging conflict in Gaza and Iran’s  support to the Houthis in Yemen complicate the situation. Given the region’s volatility, the India-Middle East-Europe Corridor that was highly publicised during the India-hosted G20 summit remains unworkable.

The US is aware of India’s ties with Iran, or for that matter, with Russia from which India could purchase missile systems only after an American waiver. Like its other allies, Washington will always retain the waiver as a whip and choose if and when to use it for or against India.

All that can be said at this stage is that the context of why India, Iran and the region need a fully operationalised Chabahar remains. There are obvious economic and strategic gains for India.

Chabahar will open up opportunities to further its interests in Iran, especially when China is eyeing Iran’s ports and coastal infrastructure, and facilitate trade with Afghanistan and Central Asia. The port agreement is premised on long-term economic and strategic interests, and, perhaps, suggests how New Delhi and Tehran, despite their current diplomatic stance and friends, are careful to exercise strategic autonomy to further their respective national interests.

That will require some thoughtful and consistent balancing, though.