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The great Game Folio: Iran Transit

To develop Chabahar’s hinterland, Iran laid out a road link to its frontier with western Afghanistan.

To develop Chabahar’s hinterland, Iran laid out a road link to its frontier with western Afghanistan. REuters To develop Chabahar’s hinterland, Iran laid out a road link to its frontier with western Afghanistan. REuters

To develop Chabahar’s hinterland, Iran laid out a road link to its frontier with western Afghanistan.

Iran Transit

India’s dream of connecting to Afghanistan via Iran could soon move a step closer to reality if New Delhi, Tehran and Kabul sign off on a draft memorandum of understanding on transit trade that has been finalised recently. Since Pakistan denies India overland access to Afghanistan, Delhi has long sought an alternative through Iran. The idea first came up when Iranian President Mohammad Khatami came to Delhi in January 2003 to participate in the Republic Day celebrations. India then agreed to participate in the development of Chabahar on Iran’s Makran coast as the future entrepôt for trade with Afghanistan and Central Asia.

To develop Chabahar’s hinterland, Iran laid out a road link to its frontier with western Afghanistan. India, in turn, built Route 606 from the Iran-Afghan border to the circular highway that connects all the major cities in the country. The Chabahar project is a winner for the three countries. It would reduce landlocked Afghanistan’s total dependence on Pakistan to access the Arabian Sea. The port will help India skirt Pakistan into Afghanistan and establish Iran’s position as a gateway to Central Asia.

A variety of political and economic factors delayed the implementation of this vital project through the last decade. In a renewed political commitment to the project, senior officials of India, Iran and Afghanistan met in Tehran on the margins of the non-aligned summit in August 2012 and agreed to accelerate the development of Chabahar. The three sides have just wrapped up talks on the terms of transit trade through Iran. India must now fast-track its investments in Chabahar and develop dedicated shipping links between Iran and India. This should be one of the top foreign policy priorities for the next government in Delhi that takes charge at the end of May.

Sagar Mala

The BJP, which hopes to run the next government, has already talked about building modern ports all along the Indian coastline under what it calls “Project Sagar Mala”. If the BJP is serious about expanding India’s sea connectivity, it must promote India’s active participation in the development of maritime infrastructure beyond borders. In other words, Delhi must imagine an “Indian Ocean Sagar Mala”.

Over the last decade and more, the Indian government and corporate sector have struggled to grasp opportunities for building sea ports in other countries. The difficulties in developing the Chabahar port is symptomatic of the broader challenges that India faces in implementing large-scale infrastructure projects in the neighbourhood and beyond.

After much effort that began more than a decade ago, India is yet to complete the Kaladan transport corridor to Mizoram via Myanmar. This involved building a port at the ancient town of Sittwe on Myanmar’s Rakhine coast, developing the part-riverine corridor to the Mizoram border and expanding the road network from Mizoram to the rest of the Northeast. In Sri Lanka, India was surprised a few years ago when Colombo asked China to build a new port at Hambantota that Beijing completed in quick time. India is yet to get its act together in getting its companies participate in the second phase of development at Hambantota.

The managers of a potential Indian Ocean Sagar Mala project in the coming years could learn much from the problems encountered in the last few years and develop an effective policy framework for the participation of Indian companies in emerging port projects in east Africa, Oman and Myanmar.

Tibet Trade

While port projects and transborder transport links are generally debated in terms of competition with China, Delhi has begun to discuss the development of an overland corridor from eastern India to China through Bangladesh and Myanmar. While the so-called Southern Silk Road might take a while, the new government will have an opportunity to consider the development of a direct trans-frontier trade corridor.

In an interesting newspaper article this week, the Chinese ambassador to India, Wei Wei, suggests that the two sides could explore the possibility of “improving cross-border transportation infrastructure in the border areas” that are not under dispute. Sikkim is one area where the Indo-Tibetan border is not in contestation. The two sides have opened the Nathu La pass a decade ago for border trade in a few commodities produced locally. The next government in Delhi, if it is politically bold and trade-oriented, could agree to open the pass for full-fledged MFN commerce and build a modern highway across it.

The writer is a distinguished fellow at the Observer Research Foundation and a contributing editor for ‘The Indian Express

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