A vital Indian asset in the Middle-East is in trouble The media believes Chabahar Port is India’s answer to China in the Indian Ocean They say it will unlock Central Asia & Europe for BUT, Chabahar is stuck I visited the port last week on what’s going wrong in Chabahar

So what’s the hype around Chabahar really about? Three things are fueling the hype around the port: . Economics Chabahar is located in Southeastern Iran close to the country’s border with Pakistan ‘s goal has been to develop the port as a major hub for trade

The idea was for goods to leave India by ship, reach Chabahar and go onwards to Central Asia through Afghanistan This would allow to avoid Pakistan & build an independent trade artery to key markets in Central Asia It would also allow to import minerals & raw materials

. Location Chabahar is located beyond the Straits of Hormuz, which is a strategic chokepoint in the Indian Ocean Experts believed that these Straits would be blocked up in case of a conflict in the Middle-East Unlike many other ports, Chabahar was located beyond the Straits

Thus, experts stated that trade through Chabahar would be safe from disruption in case a conflict closed up the Straits of Hormuz . China & Pakistan Chabahar is located just 72 km from Gwadar Port, developed by CHN & PAK Over the years, fears ofChinese navy presence..

…in the Indian Ocean have led to calls to develop Chabahar as a strategic asset to counter Media reports have speculated that Chabahar could be used by India in case attempts to use Gwadar as a naval base in a conflict So that’s the hype The reality is disappointing

That’s because the Chabahar project is stuck Some would argue its been stuck for 20 years The saga begins in 2002 when India expressed an interest in the port In 2003, India signed an MoU with Iran promising to develop Chabahar After that, nothing much happened for years

In 2004, an Indian consortium that included Ashok Leyland, backed by the Hinduja Group signed an MoU to develop Chabahar However, things never went further Even as China completed Gwadar port in 2006, IND & Iran had years of meetings about just getting started on Chabahar

@KabirTaneja writes that in 2013, India’s NSA called out the MEA for “dragging its feet” on Chabahar 2013 saw some movement as India committed $100 million for developing the port Analysts speculated that it was a move to counter China & Pakistan’s presence in Afghanistan

Things got going after the 2015 nuclear deal between Iran and P5 countries Sanctions were partially lifted and there wasinterest in investing in Iran In 2016, the govts of India, Iran & Afghanistan signed an MoU to develop Chabahar

India committed $85 million to develop Shahid Behesti Terminal (one of the port’s two terminals) The govt set up India Ports Global Limited, a govt company, to take charge of the development In 2018, ‘s Trump Administration withdrew from the 2015 nuclear deal

It also slapped sanctions on Iran which scared a number of Indian firms away from doing business In 2019, India slashed the budget for developing Chabahar from 150 crore to 45 crore As of 2023, India has spent about $25 million in developing Chabahar (promised amount $85 mil)

India has supplied 6 cranes to Chabahar so far But Iranian officials complain that the development work on Chabahar has been too slow During my visit to Chabahar, numerous officials stated that India could lose the Port to China While this is largely just a pressure…

…tactic, Iran has expressed its displeasure with before India was dropped from the Farzad B gas field project given the delay in development was dropped from developing the rail line to Zahedan, which would have boosted connectivity to Chabahar thehindu.com

China has launched a direct shipping line to Chabahar while Gwadar has signed a sister-city arrangement with Chabahar So, the idea that Iran will allow to use Chabahar as an asset vs. China may be far fetched The fall of Afghanistan in 2021 has also complicated plans

Indian firms are also unlikely to invest in Chabahar’s free trade zone While Indian firms were initially interested in investing in petrochemicals & other sectors, the imposition of US sanctions has reduced interest During my visit, I saw little foreign investment in the port

This isn’t meant to knock the efforts of ‘s diplomats While bureaucracy has slowed the development of Chabahar, sanctions have been the primary culprit For example, sanctions & procedural difficulties have made it difficult for to supply cranes to develop Chabahar

Similarly, the development of the rail line to Zahedan was also hurt because Indian firms did not want to run afoul of sanctions So with all of that, what is Chabahar really worth?

The port remains an asset Should American sanctions be lifted, the port could emerge as a key centre for trade The disruption of global supply chains means that is looking to construct new trade routes & new partners outside the West It now wants to make Chabahar a…

…key part of the INSTC project, which will allow India to develop a new trade artery to Central Asia & E. Europe through Azerbaijan/Armenia That could lead to a broader conversation about using Chabahar for strategic purposes But those conversations haven’t happened yet

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