Economy, Business And Markets

US Says It Won’t Impede India’s Chabahar Project

Indian Prime Minister Narendra Modi (R) shakes hands with US Ambassador to the United Nations Nikki Haley  in New Delhi on June 27.
Indian Prime Minister Narendra Modi (R) shakes hands with US Ambassador to the United Nations Nikki Haley  in New Delhi on June 27.

US Ambassador to the United Nations Nikki Haley on June 27 told India’s Prime Minister Narendra Modi that Washington would back his country’s plan to develop the Iranian seaport of Chabahar to open up a trade route to Afghanistan that avoids its arch-rival Pakistan.

“We realize we’re threading a needle when we do that,” said Haley on a visit to India, describing the balancing act of ensuring Indian use of the Iranian port while the US simultaneously attempts to throttle Iran’s economy to force it to renegotiate the nuclear deal, bne IntelliNews reported.

India sees Chabahar, Iran’s only oceanic port, as vital to its ambition of shipping goods directly across the Indian Ocean for further transiting across Iranian territory by rail and road to landlocked Afghanistan and Central Asian markets.

The transportation corridor would help cut Afghanistan’s dependence on neighboring Pakistan.

“We know the port has to happen and the US is going to work with India to do that,” Haley, the daughter of Indian immigrants, said. “We know that they’re [India] being a great partner with us in Afghanistan and really trying to assist the US and trying to do more. The port is vital in trying to do that.”

In February, Iran said it had agreed to lease operational control of Chabahar, located on the Sea of Oman, to India for 18 months.

China has also expressed some interest in using Chabahar for some of its export flows but part of the rationale for India developing the port is to develop a rival to the Pakistani transit port of Gwadar, which China is developing to further its own trade ambitions for Pakistan, Afghanistan and Central Asia.

Gwadar, on the shore of Sea of Oman, is located just 90 km from Chabahar.

Indian Union Minister Nitin Gadkari recently said India is trying to make Chabahar Port operational by 2019.

Moreover, Indian shipping ministry officials have been recently quoted as saying that notwithstanding the US plans to impose fresh sanctions on Iran’s nuclear deal, India is all set to begin interim operations in the strategically important Chabahar Port project.

As per the memorandum of understanding signed between India and Iran in May 2016, India would equip and operate two terminals in Chabahar Port Phase-I with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

“We have been able to enter Chabahar Port for interim operations, which will start from June 13,” said shipping secretary, Gopal Krishna, earlier this month.

The shipping ministry has also started the process of inviting fresh bids to select an Indian partner to manage, operate and maintain the port for the next 10 years.

Iran’s only oceanic port, Chabahar, dubbed “international gateway” by Iranian officials, consists of two separate ports named Shahid Kalantari and Shahid Beheshti.

President Hassan Rouhani inaugurated the first phase of Shahid Beheshti Port in the presence of some 70 visiting dignitaries from 17 countries in December.

The opening of the first phase (out of five phases defined for the project) has tripled its capacity to 8.5 million tons (equal to that of all the northern ports of the country) and will allow the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increase India’s connectivity with Afghanistan.

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