India, China, Japan Vying for Investment in Chabahar

Although the first Indian vessel, which set out from the country’s Kandla Port, has already berthed at Iran’s Chabahar, Indians have not worked fast enough to develop the Iranian oceanic port.

China, which is now focused on developing Pakistan’s Gwadar Port, also has an eye on Chabahar and Iran’s presence in Beijing’s “One Belt, One Road” initiative.

Japan is another serious actor openly interested in taking part in the development of Chabahar.

The question is which one of these three countries will be of priority to Iran for cooperation in the development of Chabahar and the country’s eastern rail routes, reads an op-ed published by US-based think-tank Eurasia Review. Below is the full text:

One year after Indian Prime Minister Narendra Modi visited Iran and signed a “historic” deal for the development of Chabahar, he paid a visit to Gujarat State, saying that Iran and India would soon be connected through a marine route from Kandla to Chabahar.

A few days later, the first container ship, which had set out from Kandla in India, berthed at Shahid Kalantari Port of Chabahar. However, the outlook delineated in past years for the development of Chabahar and a transport corridor from Chabahar to Afghanistan, Central Asia, Caucasus, Russia and Europe, as part of the North-South Transportation Corridor, goes far beyond this historic and symbolic development.

In fact, the development of Chabahar and Iran’s rail routes from Chabahar to northeastern city of Mashhad must be seen as a package all of whose components must advance in parallel in order for Iran to be able to take advantage of this special opportunity.

However, no final decision has been made about foreign investment in either of the two projects. India has announced since many years ago that it would work with Iran in this regard while officials in China have also occasionally talked about their willingness to be part of this project.

Following a recent trip to Iran by Chinese President Xi Jinping, officials have been talking about the establishment of new free zones and industrial parks through Chinese capital and technology, including in Iran’s Jask Port, and funding feasible projects by China’s EXIM bank. During frequent visits to Chabahar, Chinese investors have indicated their interest in taking part in its development.

Eight plans have been forwarded by China, India and Russia to fund the construction of the railroad that will connect Chabahar to the Iranian cities of Zahedan and Mashhad, and finally to Sarakhs and Incheborun border terminal in northeast Iran.

There have also been plans for establishing a rail connection between Chabahar and Gwadar or supplying energy to Chinese contractors in Gwadar through Chabahar.

While Chabahar is the best option for India to get access to regional markets in Afghanistan, Central Asia, Russia, Caucasus and Europe, China has already got access to the Indian Ocean through Gwadar.

On the other hand, through participating in Chabahar development, China will be able to take advantage of its vast hinterland. This country can also cooperate with Iran to supply energy to Gwadar and establish industries, which are dependent on oil and gas, while reducing the consequences of India’s exclusive presence in Chabahar close to Iran’s border with Pakistan.

In addition, connecting China to the North-South Transportation Corridor will provide Beijing with a good route to access regional markets in West Asia, Africa and even Europe.

Job creation for Chinese companies, expanding markets for Chinese products and making sure about security of energy supply from oil- and gas-rich countries in the region are major grounds for China’s economic interactions with target countries of the “One Belt, One Road” initiative. Iran can play an important and determining role in all these cases.

The Japanese have also shown great interest in taking part in the development of Chabahar quite recently. Therefore, Iran is now more at ease for choosing its partners for Chabahar development and creating transportation infrastructure in the southeastern part of the country. Bolstering cooperation with Japan and India, and developing relations with these countries in such fields as exchange of energy, construction and commissioning of refineries, development of Chabahar, and establishing rail connection between this important Iranian oceanic port and Afghanistan and Central Asia are major measures, which can further encourage China to take part in the Iranian project in order not to lose a strategic ally like Iran.

All told, it seems that Iran’s cooperation with Japan and India, which are serious partners for each other, is Iran’s priority for Chabahar development.

Development of relations with these two countries in such fields as exchange of energy, construction and commissioning of refineries, and implementation of infrastructural transportation projects can be a good way to speed up the development of Chabahar and rail routes connecting this important oceanic port in Iran to Afghanistan and Central Asia.

It can also encourage China to take steps in order not to lose a strategic partner like Iran and play a more active role in the country’s projects.