Indian companies have chosen Pakistani ports over Iran’s Chabahar Port for transporting goods to Afghanistan, despite age-old political conflicts between New Delhi and Islamabad, says the head of the board of directors with the Shipping Association of Iran.
“This shows that the problems Indian companies face in Chabahar are so much that they have been made to put aside the trilateral agreement among Iran, India and Afghanistan as well as their conflicts with Pakistan, to transit their goods to Afghanistan,” Rouzbeh Mokhtari was also quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.
He says Iran has failed to take advantage of its full potential while it boasts a strategic location in the region at the crossroads of major international transportation corridors.
“We have to allow the private sector to step in and take control of the economic activities and planning without interfering in their decisions with state-dictated regulations and roadmaps,” he added.
Mokhtari noted that in the case of Chabahar, the Iranian side did not succeed in meeting part of its commitments but what happens is local officials keep blaming the Indians for the failure of the trilateral agreement.
It took 20 days to unload the first Indian consignment of wheat bound for Afghanistan at Chabahar, according to the official, while it was supposed to take only 24 hours.
Sanctions Factor
The Iranian official noted that the economic sanctions against Iran have made foreign companies reluctant to send their freight to Chabahar and use it as a point of transit, despite the fact that the port has been exempted from sanctions.
This is while India’s External Affairs Minister S. Jaishankar told Lok Sabha (the lower house of India's bicameral Parliament), on Dec. 10 that the US sanctions on Iran have not affected India’s Chabahar Port project.
Replying to a question from BSP member Ritesh Pandey, the minister also clarified that the US sanctions are “not relevant” to India’s Chabahar Port project in Iran “at all”, The Hindu reported.
During the Question Hour, Pandey sought to know from the government if the US sanctions on Iran had any bearing on India’s project at the Chabahar Port and claimed that the Iranian government is “publicly saying that our Chabahar Port project has been miserably delayed” due to sanctions imposed by the US.
The BSP member also claimed that he is “aware” of China trying to work on the project by taking advantage of the US sanctions on Iran as it did “with the rail link”. He also asked the government if it is working on a “solution”.
“I would like to inform the member that [his] assertion is completely inaccurate. This agreement was signed in 2016. We took possession of the terminal in 2018. We have already supplied six cranes. The terminal is fully functional,” Jaishankar said.
“The US sanctions are not relevant to this project at all,” he said in his reply.
In a supplementary question, the BSP member sought to know from the government if India has signed “any backdoor agreement” to continue using the Chabahar Port to provide help to Central Asian countries and Afghanistan after Taliban took control of the Afghanistan government.
“All our agreements on the Chabahar Port operations are limited to Iran. Originally, there was a trilateral agreement but that was the basis to set it up. In terms of port operations, we are not required to have any agreement with the government of Afghanistan. And, I assure you that the port is functioning and functioning back,” the minister said.
Massive Potential
Director General of Iran’s Ports and Maritime Organization’s branch in Sistan-Baluchestan Province Behrouz Aqaei, says Chabahar is the most cost-effective, safest and most economical way to trade for more than 3 billion people in different parts of the Indian Ocean, Central Asia, the Caucasus and Eastern Europe.
A bilateral contract between Iran and India was signed on May 23, 2016, with a total value of $85 million for equipping, mechanizing and starting operations at Chabahar Port under the first phase.
New Delhi has supplied six mobile harbor cranes - two with a capacity of 140 tons and four that can handle 100 tons, in addition to other equipment worth $25 million.
Chabahar Port is located in the Sea of Oman, near Iran’s border with Pakistan. It is Iran’s only major oceanic outlet lying beyond the Straits of Hormuz and provides direct access to the Indian Ocean. It connects to Afghanistan at the Zaranj-Deleram highway. The port serves as the nearest port entry, after the Pakistani ports at Karachi and Gwadar, for India into Central Asia.
India’s Chennai, Kandla and Mumbai ports are all connected with Iran’s Chabahar Port, which coupled with the International North-South Transport Corridor will be able to utilize connectivity through Iran, Afghanistan, the Central Asian States, Russia and Europe.
India sent 75,000 tons of wheat as humanitarian food assistance to Afghanistan last year via Chabahar.
According to the Diplomat, the port has a number of distinguishing features that make it attractive from both domestic and international perspectives. Located on the edge of the Indian Ocean, it is the only deep-sea port in Iran with direct ocean access. Its geographic proximity to countries such as Afghanistan, Pakistan and India, as well as its status as a key transit center on the burgeoning International North-South Transportation Corridor, gives it the potential to develop into one of the most important commercial hubs in the region. Chabahar is also one of the few places in Iran that is exempt from US sanctions, which significantly simplifies trade procedures with other countries.
The construction of the port project in the Iranian city of Chabahar has been gaining increased attention as a potential global trading hub and an arena for geopolitical competition. India has served as the primary investor in Chabahar Port, as New Delhi sees the port as a way to access Afghan and Central Asian markets without relying on Pakistan’s land routes. Furthermore, the port could strengthen Indo-Iranian ties, which would balance out growing Sino-Pakistani cooperation.
With India and China competing to invest in this harbor, Iran is trying to play the two rivals off each other to boost its own international standing while not becoming dominated by either one of these powers. Chabahar Port is thus a key case study in both international collaboration and competition: It could offer a trade revolution in the area, but it could also exacerbate regional rivalries.
Chabahar Port has the capacity to transform trade in South and Central Asia. The proposed land-based trade routes linked to the port would facilitate greater access to the Afghan and Central Asian markets. The impact of this increased connectivity has enormous implications for Afghanistan in particular, although the fallout from the Taliban’s rapid takeover of the country could jeopardize these plans moving forward.
Currently, Afghanistan conducts most of its trade via routes through Pakistan; Chabahar Port could provide an alternative trade outlet for the country. In turn, Chabahar has the potential to generate massive economic growth in Afghanistan, as it would allow goods from other countries to more easily enter the country and bolster its export potential.
Two direct container shipping lines were recently launched from Chabahar Port to India’s Jawaharlal Nehru Port and Kandla Port.
The first container vessel to travel these routes was scheduled to dock at Chabahar on Feb. 16, according to the caretaker of Ports and Maritime Organization’s Economic Affairs Department.
“Shipping on these routes will be in collaboration with the Islamic Republic of Iran Shipping Lines Group. It will take container ships between 10 and 15 days to travel between the ports in Iran and India,” Jalil Eslami was also quoted as saying by IRNA.
Jawaharlal Nehru Port Trust or JLN Port, also known as Nhava Sheva Port, is the largest container port in India.
Kandla, officially Deendayal Port, is a seaport and town in Kutch district of Gujarat state in Western India, near the city of Gandhidham. Located on the Gulf of Kutch, it is one of the major ports on the west coast.
