The passage of the first consignment of Indian cargo to Afghanistan through Chabahar has made headlines — but hopes that the port will transform India’s relationship with central Asia are facing a rising storm tide. The shipment, part of the 1.1 million tonnes of wheat India has promised to supply free to Afghanistan’s war-torn people, will bring relief to tens of thousands. However, the shipment has also underlined how far we are from realising the larger project of which the port is just a part. In May 2016, Afghanistan, India and Iran had signed an agreement establishing an international transport and trade corridor. For Afghanistan, it offered escape from the chokehold which Pakistan exercises over its external trade, now overwhelmingly dependent on Karachi port. For India, the port had even larger significance. Iran’s commitment to link Chabahar to its rail network held out the promise of Indian overland access to central Asia, Russia and even Europe. The 2016 agreement envisaged India would, inside 18 months, spend $85 million to upgrade the port’s capacity from 2.5 million tonnes a year to 8 million tonnes. In addition, India offered $400 million worth of steel to build a railway line from Chabahar to Zahedan, linking the port to Iran’s railway network. Iran was, finally, offered a $150 million credit line.
Yet, more than a year on, there are signs the whole project could unravel — largely because of the US. Earlier this month, President Donald Trump announced he intended to walk out of the Iran nuclear deal, in which Tehran promised to roll back its nuclear-weapons capabilities in return for an end to Western sanctions. Should Trump deliver on his threat, European and even Indian private-sector firms will be reluctant to participate in the project, for fear of attracting US sanctions. Work on the port upgrade is yet to begin, largely because European suppliers have been uncertain about the risks of working in Iran. Worse, the volume of trade the project is premised on will not be realised.
Indian trade with Afghanistan is unlikely to sustain Chabahar; war in the country means its mineral resources are impossible to tap in the forseeable future. Faced with this looming crisis, Iran is already turning to China, handing it oil and gas concessions New Delhi had hoped to win in return for its Chabahar investment. India needs to find a way to address this challenge, or risk seeing its regional strategy unravel.