Economy, Business And Markets

India, China Compete Over Chabahar Development

India, China Compete Over Chabahar Development
India, China Compete Over Chabahar Development

Wary of Beijing’s move to strike a deal with Tehran for development of the Chabahar Port, India is set to move fast on its own projects at the seaport in southeastern Iran.

India's Shipping Minister Nitin Gadkari said that New Delhi had set a timeline of 18 months to build a container terminal and a multi-purpose cargo terminal on two berths at Chabahar Port, According to a Tuesday report by Deccan Herrald, a leading English-language daily newspaper in the Indian state of Karnataka.   

He also said that efforts would be made to complete the project within one-and-a-half months.     

India is understood to be keen to make up for time lost over the past few years, when it was hesitant to go full throttle on the project primarily in view of the strict sanctions that the US and the European Union had imposed on Iran over its nuclear program.

Sources said that New Delhi was also keen to counter China’s bid to get a toehold in the strategically important port, which is located on the border of the Indian Ocean and the Sea of Oman. Beijing’s offer of a credit line of $80 million to Tehran for developing the Chabahar Port caused concern in New Delhi, which is now keen to take advantage of easing of sanctions on Iran by the US and the EU in the wake of current negotiations between the Islamic Republic and the P5+1 group, which is comprised of the US, Britain, Russia, China, France and Germany.

India’s move to fast-track its project to build infrastructure around Chabahar Port in Iran follows recent acquisition by Overseas Port Holding Company of China of management of the commercial port in Gwadar on the southwestern coast of Pakistan. Chinese People’s Liberation Army Navy has for long been using the Gwadar Port, which New Delhi perceives as yet another addition to the String of Pearls – a series of strategic assets China is acquiring around India.

Though the then External Affairs Minister Salman Khurshid had visited Tehran in May 2013 and conveyed to the Iranian government India’s commitment to develop the Chabahar Port, the project made no headway  over the past one-and-a-half-years.

The project received impetus on October 18 when a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi approved the framework of an inter-governmental memorandum of understanding, which New Delhi and Tehran would ink paving the way for India’s participation in development of the Chabahar Port.

A joint venture company – comprising Jawaharlal Nehru Port Trust and Kandla Port Trust – will lease two fully constructed berths in Chabahar Port’s Phase-I project for a period of 10 years, which could be renewed by “mutual agreement”. The company will invest $85.21 million for equipping the two berths as a container terminal and the second as a multi-purpose cargo terminal, the Union Cabinet decided.

The Indian governemnt also approved annual revenue expenditure of $22.95 million to support operational activities of the company.

India views Chabahar Port as a strategically important port, which could give it a sea-land access route into Afghanistan through the eastern borders of Iran.