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Iran’s Chabahar port opens, allows India to bypass Pakistan on trade route to Afghanistan

India, Iran and Afghanistan have signed an agreement to grant preferential treatment and tariff reductions at Chabahar to Indian goods headed toward Central Asia and Afghanistan.

Written by Shubhajit Roy | New Delhi |
Updated: December 4, 2017 7:12:23 am
Chabahar port, Iran, Afghanistan, India Chabahar port Chabahar port: Iranian President Hassan Rouhani poses during the inauguration a newly built extension of the port of Chabaha, near the Pakistani border, on the Gulf of Oman, southeastern Iran. (AP)

In a major step forward, the first phase of Iran’s Chabahar port, which holds significant strategic and economic importance for India, was launched on Sunday. The port allows India to bypass Pakistan and reach land-locked Afghanistan and Central Asian countries. New Delhi views the Chabahar port project as a strategic response to China’s development of the Gwadar port in Pakistan, and its aggressive pursuit of the Belt and Road Initiative. It is also key to accessing the Central Asian markets for Indian goods.

Iran’s President Hassan Rouhani inaugurated the Shahid Beheshti Port’s first phase in a ceremony that was attended by ministers, envoys and officials from 17 countries, including Minister of State for Shipping Pon Radhakrishnan. President Rouhani said during the ceremony that the inauguration marked a “historic” day for Iran, particularly for the people of Chabahar.

He emphasised that the project was specifically important, given that it connects the trade corridors that pass through Iran to the sea route. “This port is also significant from the political point of view given that it connects Iran with its eastern and northern neighbours and at a later stage to European states,” Rouhani said.

Read | Sushma Swaraj makes stopover at Tehran, discusses bilateral issues

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The move to develop Shahid Beheshti Port started in 2007 through an investment that officials previously said amounted to $1 billion. However, India’s intention to become a partner in the project was made clear as long ago as in 2003.

Chabahar port, Iran, Afghanistan, India Chabahar port Iranian President Hassan Rouhani, center, speaks during the inauguration a newly built extension of the port of Chabahar, near the Pakistani border, on the Gulf of Oman, southeastern Iran. (AP Photo)

From 2.5 million tonnes, the annual cargo tonnage of Shahid Beheshti Port, Iran’s only oceanic port, is now expected to almost triple and reach 8.5 million tonnes. It can also accommodate 100,000-tonne ships, which India feels has strategic and economic potential as a rival to the Gwadar port. The overall development of the port is planned in four phases and is expected to bring its total annual cargo capacity to 82 million tonnes. India, Iran and Afghanistan have signed an agreement to grant preferential treatment and tariff reductions at Chabahar to Indian goods headed toward Central Asia and Afghanistan.

Chabahar provides India with an easier land-sea route to Afghanistan. The Indian government has committed $500 million to Chabahar, with an aim to join an increasingly important transport corridor to resource-rich regional countries. India has prepared massive investment plans, which will include a network of roads and railways at a cost of USD 15 billion, as part of its strategic push in the area.

Once the project is complete, Chabahar will be linked with the International North-South Transportation Corridor (INSTC), which currently stretches from the Iranian port of Bandar Abbas in the Gulf to Russia, Eurasia and Europe. “We are happy that the first wheat shipment for Afghanistan has been sent to the country’s people via the Iranian port,” Rouhani said, according to IRNA news agency.

In a statement issued on Sunday, the Ministry of External Affairs said, “In the trilateral meeting with Iranian Transport Minister Abbas Akhoundi and Afghan Trade and Commerce Minister Humayoon Rasaw, the three sides reviewed and positively assessed the progress in the development of Chabahar port and reiterated their commitment to complete and operationalise the port at the earliest that would contribute to bilateral and regional trade and economic development and also provide alternate access to landlocked Afghanistan to regional and global markets.”

Referring to the Indian shipment in October, it said, “The three sides also commended the recent joint efforts, which led to the transit of first tranche of 110,000 tonnes of wheat from India to Afghanistan through the Chabahar port.”

The port’s inauguration comes more than a month after the first consignment of wheat from India to Afghanistan was sent via Chabahar. This was the first such shipment after the trilateral agreement to develop the port as a transport and transit corridor between India, Iran and Afghanistan was signed by Prime Minister Narendra Modi with Iranian and Afghan Presidents Rouhani and Ashraf Ghani, respectively, in May last year.

According to the Indian statement, at the trilateral meeting, the Indian, Iranian and Afghan Ministers “agreed to further intensify efforts on issues concerning regional connectivity and focusing on Chabahar port development under the Trilateral Transit and Trade Agreement”. It said that Radhakrishnan “expressed his positive appreciation to the Iranian side on the recent steps taken towards ratification by the Majlis of Iran on the Trilateral Transit and Trade Agreement signed in May 2016”.

The statement said, “The completion of the internal procedures on the ratification process by Iran is expected to lead to full and early operationalisation of the Transit and Trade arrangement between the three countries though the Chabahar port… It is expected that a trilateral coordination meeting of senior officials will be convened at the earliest.”

Iranian Foreign Minister Javad Zarif said the port would reinforce mutual and regional cooperation between Iran and India. “It also shows the importance of the port in the development of the region and the routes that connect Central Asian states to other countries in the world through the Sea of Oman and the Indian Ocean,” he said.

The port will increase the capacity of loading and unloading of ships as well as the employment rate in the province, according to an official with the Sistan and Baluchestan Ports and Maritime Organisation.

Ahead of the inauguration, External Affairs Minister Sushma Swaraj met her Iranian counterpart Zarif in Tehran on Saturday, during a surprise stopover on her way back from a Shanghai Cooperation Organisation meeting in Russia, and discussed the port project among other issues.

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