Can India challenge China with new Iranian Chabahar Port?
Taher Shirmohammadi, Wesley Rahn
Deutsche Welle | 12 May 2018
www.dw.com/en/can-india-challenge-china-with-new-iranian-chabahar-port/a-41659083
A new India-sponsored port in southeastern Iran has the potential to flood Central Asia and Afghanistan with
Indian goods. Pakistan is watching with concern and China may have a new economic rival in the region.
On Sunday, Iranian President Hassan Rouhani inaugur-
ated a newly constructed extension to Chabahar Port,
a deepwater harbor located in southeastern Iran on the
Gulf of Oman. The expansion is the first phase in a
series of projects organized under a 2016 transport
agreement between Iran and India.
By gradually increasing capacity, Chabahar Port will
open markets in Afghanistan and Central Asia to Indian
products while bypassing Pakistan. The current capacity
of the harbor after
the expansion is
reported to be 8.5
million tons of cargo
annually.
The stage is be-
ing set for a geopoli-
tical trade rivalry,
with the Chinese-
sponsored port at
Gwadar, Pakistan,
also being expanded
less than 100 kilo-
meters (60 miles)
away.
The longstand-
ing conflict between
India and Pakistan has made it difficult for India to esta-
blish a secure transit route to markets in Iran, Afghani-
stan, Central Asia and the Gulf region. India's archrival
Pakistan forb-ids land transit of Indian goods across its
territory. By funding the expansion of Chabahar Port,
India solves this access problem with a secure transit
route.
Chabahar is located 900 kilometers (560 miles)
from India and is the only Iranian port with direct
access to the Indian Ocean. Last year, India agreed to
invest another $500 million (420 million euros) in
developing the port along with road and rail lines.
Michael Kugelman, Asia Program Deputy Director
at the Woodrow Wilson Center in Washington DC,
told DW that the Chabahar expansion could hypoth-
etically be a huge boon for the economies of India and
Afghanistan.
"I say it's a potential game changer because we're a
long way away from this project being truly operational.
I don't think we should overstate the progress that's
been made with this project just yet," said Kugelman.
"There have been agreements and they've had a
few initial shipments of wheat and things like that. But
there's a lot of work that needs to be done on this
project before we could start talking about it being
completely operational," he added.
Trouble for Pakistan?
The geopolitical implications of Chabahar's expansion
become clearer when looking down the coastline at the
Pakistani port at Gwadar. China has invested $54 billion
in infrastructure projects known as the "China-Pakistan
Economic Corridor"
under the "One Belt,
One Road" initiative.
The port at Gwadar
is being built with
Chinese money to
serve as Beijing's
gateway to global
markets via the
Indian Ocean.
Gwadar also
serves China as a
secure oil route and
could eventually be
developed into a
Chinese military
base, considering its
strategic location near India. India sees its position as a
regional power threatened by the port at Gwadar,
along with the close cooperation between China and
Pakistan.
Dr. Abdol Sattar Dushouki , from the Centre for
Balochistan Studies in London, told DW "when both
harbors are fully functional, it could increase competi-
tion and tension between shipping companies in the
region."
Dushouki added that India's ability to access Cen-
tral Asia and gain influence in Afghanistan depends on
how fast the projected expansion of Chabahar can be
completed. "It depends on the speed of increasing the
harbor's capacity from the current number of 8.5 mil-
lion tons to 80 million tons of annual freight capacity,"
he said.
Pakistan is concerned about Indo-Iranian economic
ties, even if Iran insists that its growing cooperation
with India is not being directed against Pakistan and
China. At the inauguration on Sunday, Iran's Rouhani
downplayed the Gwadar-Chabahar rivalry in a speech,
saying the port would bring "more engagement and
unity" to the region.
 "We should go after positive competition. We wel-
come other ports in the region, we welcome Gwadar's
development," the Associated Press reported Rouhani
as saying.
Pakistan is also worried about competition from a
flood of Indian goods in Central Asia and Afghanistan
that could make Pakistani products less expensive and
push them out of markets. There is also concern that
India will use its increased influence in Afghanistan to
destabilize Pakistan.
"Pakistan sees India as an existential threat and the
idea of India being in any way present on Pakistan's
western flank in Afghanistan will always raise alarm
bells in Islamabad," said Kugelman from the Wilson
Center.
"I think the Chabahar port project is something
that doesn't really worry Pakistan in the immediate
sense because the Pakistanis know it's going to be a
long time before Chabahar really starts to have any
type of concrete impact in terms of deepening trade
relations and transit between India and Afghanistan and
Iran," he said, adding that Pakistani retaliation to
deepening ties between India and Afghanistan could be
concerning in the future.
"If Pakistan believes that India is deepening its
relationship with Afghanistan, does that mean it could
then increase its support to the types of non-state
actors that threaten India and Afghanistan?" he said.
"Does this mean that Pakistan could try to encourage
the likes of the Haqqani Network to try to target
Indian interests in Afghanistan such as consulates or
even the embassy? We don't know."
Role of China and the US?
At this point, however, the regional economic and
geopolitical rivalry posed by the Chabahar Port is only
speculative and the big increases in trade flows remain
projections on paper.
"India tends to move at a rather slow pace when it
comes to these major development schemes just for
reasons of bureaucracy and other factors. This is a far
different cry from China working on its Belt and Road
Initiative," said Kugelman. "China can move very quickly
and it's simply very efficient in that way, but India takes
a longer time," he added.
Despite Washington's tough stance toward Iran,
the US has yet to object with Iran's increased
cooperation with India. In October, during an
appearance in New Delhi, US Secretary of State
Tillerson said that the US would not block "legitimate"
business activities with Iran by India or any other ally.
He also said that he saw "no contradiction" with US-
Iran sanctions and India's bilaterial port development
deal in Chabahar.
It is possible that this conciliatory tone from the
US is rooted in an interest to promote India as a
regional power ruled by a democracy. By expanding
India's economic reach, Afghanistan could be drawn
more into New Delhi's orbit and at the same time
Chinese influence in the region would have a strong
rival.
"Potentially it's a huge achievement for all the
countries involved and it could pay huge dividends, but
I think we need to wait a bit and we shouldn't
overstate the impact just yet," said Kugelman.
Additonal reporting by Waslat Hasrat-Nazimi.