This week, India signed a 10-year agreement to develop and operate Iran’s strategic Chabahar Port, aiming to boost trade ties with landlocked Afghanistan and Central Asian countries while bypassing ports in its western neighbor and arch-foe Pakistan.
India asserts the agreement will benefit the entire region. “The port serves as a vital trade artery connecting India with Afghanistan and Central Asian countries,” India’s Shipping Minister Sarbananda Sonowal said.
However, the United States has issued a warning about potential sanctions. “Any entity considering business deals with Iran needs to be aware of the potential risk of sanctions,” US State Department spokesman Vedant Patel stated.
India dismissed this warning. Foreign Minister Subrahmanyam Jaishankar told reporters that New Delhi would “communicate the benefits” of the deal to the US and urged countries not to “take a narrow view of it.”
Chabahar, located in Iran’s Sistan va Balochistan province, is the closest port to India in Iran. It provides a safe and accessible route for large cargo ships due to its location in the open sea. Through this port, India can export goods to Afghanistan, Central Asia, and other countries.
Back in 2016, during Indian Prime Minister Narendra Modi’s visit to Iran, India, Iran, and Afghanistan signed a tripartite agreement to develop the port. New Delhi pledged to invest $500 million to reconstruct a 600-meter container handling facility as part of its efforts to develop the deep-sea port as a transit hub.
Despite U.S. trade sanctions against Iran, India secured an exemption from the Trump administration to proceed with the port’s development due to the transit route’s potential to assist Afghanistan, a key security interest for the US at the time. An under-construction railway link connecting the Chabahar Port to Afghanistan was also exempt from the sanctions.
Dr. Ritosha Tiwari, quoted in a BBC Urdu report on the latest agreement, stated, “This agreement is regionally significant for India. India wants to expand its trade to Central Asia. Since Chabahar is located in the Gulf of Oman, it will help India connect to the International North-South Transport Corridor.”
Tiwari added, “It will also provide a direct trade route to Russia through Iran. Chabahar Port is only 550 nautical miles from Gujarat’s port and 786 miles from Mumbai’s port. India has struck this deal at a very opportune moment.”
Dr. Tiwari also noted the proximity of Pakistan’s Gwadar port, which is being developed with China’s assistance. “Just 70 nautical miles from Chabahar, Pakistan is building a modern trade hub in Gwadar, but it will be difficult for Pakistan to be included in Iran’s corridor due to the nature of agreements between China and Pakistan and the geopolitical situation in Balochistan.”
India has long sought a land route through Pakistan to export goods to Afghanistan, but strained relations have thwarted progress. Dr. Fazal Rahman of the Indian Council of World Affairs commented in the BBC Urdu report, “In the past eight to ten years, economics has become a crucial aspect of international politics. Connectivity and trade routes are central to any country’s foreign policy.”
Rahman noted, “Iran also seeks to mitigate the impact of U.S. sanctions. Iran has faced sanctions in various forms for decades. As U.S. dominance in global politics wanes and a multipolar system emerges, Iran is finding alternative trade routes with countries like Russia, China, and India.”
Analysts believe India’s main aim is to counter China’s partnership with Pakistan and Beijing’s growing influence in the Gulf of Oman region. The China-Pakistan Economic Corridor, part of China’s Belt and Road Initiative, includes significant investments in Gwadar port, serving as a gateway for Chinese goods to global markets via the Indian Ocean.
Conversely, the long-standing tensions between India and Pakistan have complicated India’s efforts to establish secure transit routes to markets in Iran, Afghanistan, Central Asia, and the Gulf region. With Pakistan prohibiting land transit of Indian goods across its territory, India aims to resolve this issue by investing in Chabahar Port, thereby securing an alternative transit route.
However, this strategic move could exacerbate tensions with Pakistan and China, as both countries view India’s expanding influence in the region with concern. The development of Chabahar Port may thus lead to increased geopolitical tension, potentially setting the stage for new confrontations in the region.