First phase of Chabahar port inaugurated in Iran

The first phase of Iran’s Chabahar port (Shahid Beheshti Port) which holds significant strategic and economic importance for India was inaugurated was Iran’s President Hassan Rouhani.
It is Iran’s only oceanic port located on the Gulf of Oman, southeast of Iran near Pakistani border. It has been jointly developed by India, Iran and Afghanistan.
The first phase is expected to increase its cargo handling capacity to 8.5 million tons annually i.e. by over three times from the previous 2.5 million tons. It also includes five new piers, two of them for containers allowing cargo vessels with up to 100,000-ton captaincy to dock.

Background

The move to develop Shahid Beheshti Port was started in 2007. India’s intention to become major partner in project was made clear as long ago as in 2003. The overall development of port is planned in four phases and is expected to bring its total annual cargo capacity to 82 million tonnes. India, Iran and Afghanistan had signed Trilateral Transit and Trade Agreement to grant preferential treatment and tariff reductions at Chabahar to Indian goods headed toward Central Asia and Afghanistan. The port’s inauguration comes after the first consignment of 1.1 lakh tonnes wheat from India to Afghanistan was sent via Chabahar in November 2017.

Significance

The Chabahar port allows India to strategically bypass Pakistan and reach land-locked Afghanistan and Central Asian countries, contributing to bilateral and regional trade and economic development. India views Chabahar port as strategic response to China’s development of Gwadar port in Pakistan (some 78 kilometers away) and its aggressive pursuit of Belt and Road Initiative (BRI).
Chabahar port will be also key for Indian goods to get access Central Asian markets and also provide alternate access to landlocked Afghanistan to regional and global markets. It can accommodate 100,000-tonne ships, which India feels has strategic and economic potential as rival to Gwadar port. The project is important as connects trade corridors that pass through Iran to sea route. It is also politically significant as it connects Iran with its eastern and northern neighbours and at a later stage to European states.

Future Prospects

Chabahar provides India with easier land-sea route to Afghanistan. India committed $500 million for development of Chabahar, with an aim to join increasingly important transport corridor to resource-rich regional countries.
Once the project is completed, Chabahar port will be linked with International North-South Transportation Corridor (INSTC), a multi-modal transportation route which links Indian Ocean and Persian Gulf to Caspian Sea via Iran, and onward to Eurasia and Europe.
India and Iran also have prepared massive investment plans to link port to Iran’s railroad network to facilitate transit of goods to neighbouring landlocked Central Asian countries, as well as open a route to eastern and northern Europe through Russia.

Month: Current Affairs - December, 2017