Opportunities before India: Chabahar Port and India Ports Global Ltd. - Involvement Portends Extended Cooperation among Iran-India and Afghanistan
Gautam Sen

Formal inauguration of India Ports Global Ltd (IPGL) - an Indian private registered company and classified as a Union Government company - operations on 25th December last year, at Shahid Beheshti port at Chabahar in Iran`s Sistan-Balochistan Province on the shore of Gulf of Oman, is a milestone from the strategic perspective of trilateral cooperation among Iran, Afghanistan and India. The inauguration followed the first trilateral review meeting at Chabahar itself among the three countries after the Trilateral Agreement on Development of Chabahar of 2016. On 23rd May, 2016, at the trilateral summit of the Presidents of Iran and Afghanistan and the Indian Premier, the Chabahar connectivity event was celebrated and the Trilateral Transit Corridor (TTC), emanating from Chabahar, was inaugurated. The TTC is intended to enable road and rail linkages to Zahedan – an Iranian rail hub in the country`s Upper-East near the Iran-Afghanistan border, and further connectivity to Zaranj in Western Afghanistan`s Nimroz Province on the North-Eastern axis, besides Mashad in upper Iran and even further towards Iran`s Central Asian border. The commencement of the IPGL operations at Shahid Behesti Port Terminal is the first step towards execution of the TTC. In the review meeting at Chabahar, there was a consensus on routes of trade and transit corridors, harmonising of transit and customs protocols, consular issues and observance of the Geneva based Transport Internationeux Routiers Convention.

The development of port facilities at Chabahar was initially broached by Iran during the Cold War period in the 1950s, and later formally by the Shah Reza Pehlavi’s monarchical regime in 1973. Thereafter, for various reasons including change of regime in Iran, the altering perceptions of India on the regional strategic milieu, vicissitudes of India-Pakistan relations, foreign intervention and huge instability in Afghanistan, Chabahar did not get the proper focus of state attention and consensual policy intervention from the governments of the day in Teheran, Kabul and New Delhi. A convergence of interests between Iran and India on development of Chabahar with Indian investment, centered on development of Afghanistan as well as promotion of trilateral trade, in an effective sense, seemed to have gained salience only as a recent phenomenon.

India has committed an investment of US $ 85 million on Chabahar`s Shahid Behesti port development. The Port of Chabahar, has actually two port components, viz, Port Shahid Kalantari and Port Shahid Behesti. While Port Kalantari has crossed cargo clearance of more than two million tons annually, the target of the Iranian Government is to enhance Port Behesti`s annual cargo transshipment to 12 million ton annually with Indian investment and technical support. IPGL is slated to play a significant role in this process. Between the two ports, Kalantari and Behesti, Shahid Behesti has larger area, greater capacity for development and expansion, is targeted to receive ships up to 70000 tons dwt and handle multi-purpose items, oil and general cargo. As a conjoint endeavour, both Iran and India have planned outward logistical facilities from this Port to ensure success of the TTC and a proper economic and geo-political outcome for both the countries. The Government of India, through the country`s EXIM Bank, has committed a line of credit of US $ 500 million on rail connectivity from Port Shahid Behesti and a further investment of US $ 1.6 billion through IRCON International, an Indian state railway engineering enterprise, on constructing the 500 km Chabahar-Zahedan rail link. Operationalising of this rail link within a span of two to three years should be the target of both Teheran and New Delhi, which may be an attainable objective. Expertise wise, IRCON should be able to successfully execute this stretch.

The significance of economic developments with strategic overtones centered on Chabahar and Port Behesti, need not be overstated. Chabahar and Port Shahid Behesti on the Gulf of Oman open out to the Indian Ocean unlike the older Bandar Abbas port on the Persian Gulf littoral which is likely to counter security constraints should the strategic milieu around the Straits of Hormuz, the only access point to the Gulf from the Indian Ocean, deteriorate. The facilities at Chabahar and its two ports, Shahid Behesti in particular with a deeper draft and its geographical disposition, will give Iran more geo-political options and strategic confidence than Bandar Abbas.

Impact of the evolving scenario in Afghanistan, with reduction in US-NATO military support looming, may have also induced the recent developments. The US government has not enforced its anti-Iran government sanctions on supplies of Indian heavy engineering equipment and infrastructure material for port development at Chabahar. Given the focus of port development at Chabahar on facilitating trade and supplies of infrastructural material and essential goods to Afghanistan to assist its present civilian administration, which harmonises with the present US policy vis-à-vis the regime of incumbent President Ashraf Ghani, India has a window of opportunity to enhance its support to the incumbent regime in Kabul and consequently its influence on the Afghan Government.

Iran however, continues to have a tacit relationship with the Afghan Taliban. The Iranian deputy foreign minister has been having a political dialogue with the Afghan Taliban leadership obtrusively. Iran`s stake in the Chabahar-Port Behesti development, will remain a means to influence the existing regime in Kabul, and may also ensure tacit and less-than-hostile posture of the Afghan Taliban leadership on the Chabahar based trade links to their country, particularly from India. It is to be seen how India manages to use the instrumentality of Chabahar and related infrastructure emanating from there, for increasing its trade and developmental linkages with Afghanistan, and induce a non-destructive approach apropos these efforts from at least a faction of the Taliban leadership, with Iranian support factored in.

Government of India would do well to manage the strategic and economic developments focused on Chabahar with a comprehensive oversight under its Ministry of External Affairs (MEA). The special purpose vehicle of IPGL may remain under techno-administrative support of the line ministry, ie. The Shipping Ministry of Government of India, but oversight required from the strategic perspective may necessarily be exercised by MEA. Economic viability of IPGL’s Chabahar–Port Shahid Behesti operations will be a legitimate consideration, though sometimes overriding factors emanating from strategic needs may have to be afforded due precedence and weightage from India`s national interest vis-à-vis Iran, Afghanistan and Pakistan. It is also to be seen how successfully the Government of India manages to link the Indian ports of Mumbai and Kandla with Chabahar and its Port Shahid Behesti for transshipment of cargo, both inward and outward to and from Iran and Afghanistan as well as the Central Asian countries through appropriate trade protocols. Without a larger perspective, consummation of the Chabahar-Port Shahid Behesti developmental endeavour may not be achieved.

IPGL, a company incorporated in January 2015 with an authorised and paid-up share capital of Rs. 10 crore and under the stewardship of an experienced former Shipping Corporation of India managing director, should be able to successfully undertake the loading, unloading, procurement and maintenance of the Shahid Behesti Port infrastructure with its berths, container handling and ancillary facilities for a ten-year period as initially agreed between Teheran and New Delhi. However, infusion of more working capital from the Government of India, at least in the short-term, to IPGL may be required commensurate with the anticipated upscaling of its operations. While profitability of its operations will depend on time-bound development of its infrastructure and outward linkages both road and rail, for some time at least, working capital needs of IPGL will have to be suitably taken care of by New Delhi.

The essence of the matter is that India and IPGL have to perforce ensure in concert with the Iranian authorities concerned so that Chabahar complex and Port Shahid Beheshti function expediently as part of an extended network of rail, roadway, mineral development and essential services logistical infrastructure, encompassing a huge hinterland area of Southern and Central Iran and south, Central and South-Western Afghanistan. The proposed rail link Chabahar–Zahedan, an Iranian rail hub in South-Eastern Iran near the Iran-Pakistan-Afghanistan Tri-Junction, is planned to be developed along with an extension to Mashad near the Central Asian border. Moreover, and significantly from the perspective of India`s and Afghanistan`s strategic and economic needs, a North-East rail linkage is required to be put in place from Zahedan in Iran to Zaranj in Nimroz Province of Afghanistan. Both New Delhi and Kabul are aiming at movement of essential livelihood related goods and infrastructure material from India to Afghanistan`s Western and North-Western provinces through Port Shahid Beheshti terminal, rail and road network through Zahedan, then onward to Zaranj in Afghanistan, and thereafter through the 212 km long Zaranj-Delarum Highway to at least Delarum in Farah Province, thus enabling access to many provinces in the Eastern part of Afghanistan. Notably, this Highway, covering high insurgency-prone provinces, was built under great security constraints and India`s Border Road Organisation`s efforts a decade ago.

Therefore, from the overall perspective of enabling better administrative control of the Afghan Government over its territory with conjoint support of India and Iran, the developments on Chabahar and Port Shahid Beheshti have a significance, which New Delhi may reckon and execute its policies accordingly. The success of New Delhi`s efforts will nevertheless hinge to a great extent on the Afghan Taliban`s posture towards the above-mentioned initiative and its political objectives on governance and area control in Afghanistan, particularly as US presence reduces. In the evolving scenario, Government of India will need to adroitly leverage Iran–Afghan Taliban relations vis-a-vis India`s developmental initiatives in Afghanistan for proper outcomes suited to its strategic interests in the region.

A multi-pronged endeavour on India`s part is required to consummate its foreign policy objectives vis-à-vis Iran, Afghanistan and Pakistan. Chabahar and Port Shahid Behesti`s development and expedient management of operations of IPGL there, would be significant in the process. Government of India may adopt an approach which involves an Iranian entity or one of its special purpose vehicles at Port Shahid Behesti on a dual management mode and operational cost-sharing basis with major capital investment by India. Such an arrangement is expected to promote Iranian commitment and interest in the infrastructure while enabling India to ensure that its foreign policy objectives vis-à-vis Afghanistan are attained.

A management structure as above, will be acceptable to USA also, and as a concomitant, the Chabahar-Zahedan-Zaranj logistical facility will be viewed by Washington as a support measure for the present Afghan regime and the polity. The very fact that the US government has given a waiver from its sanctions on Iran, in respect of the Chabahar entry-point port infrastructure and ancilliary facilities, is indicative of Washington`s acceptance of these facilities as concomitant to stabilization of Afghanistan. New Delhi should therefore make the best of this opportunity.

(Gautam Sen, a retired Indian Defence Accounts Service officer, has served in senior appointments with Government of India and North East State Governments)

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>


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