Despite sanctions on Iran, India is still intent on pushing ahead with the Chabahar Port

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  • Earlier this week, India, Iran and Afghanistan held trilateral discussions for the first time ever in Kabul.
  • The focus of the discussions was the long-delayed Chabahar port project in Iran, which has been a question mark for India following the Trump administration’s decision to reimpose sanctions on Iran.
  • During its 2+2 talks with the US last week, India made a case for its participation in the Chabahar port project. The next round of trilateral discussions between India, Iran and Afghanistan is scheduled for 2019.
Earlier this week, India, Iran and Afghanistan held trilateral discussions for the first time ever in Kabul. The Indian contingent was spearheaded by Foreign Secretary Vijay Gokhale, who met with the deputy foreign ministers of both countries.

While a number of issues were discussed, such as counter-terrorism cooperation and the trade of narcotics, the focus of the discussions was the long-delayed Chabahar port project on Iran’s southern coast. The development of the port has been a huge question mark for India following the reimposition of sanctions on Iran by the Trump administration this year after it pulled out from the nuclear deal.

A long time in the making

First conceived in 2003, the Chabahar port, which can be accessed from India’s western coast, is envisioned as a strategic competitor to the Gwadar port that China is developing a 100 kms away in Pakistan. Once developed, the Chabahar is expected to boost trade not only between India, Iran, Afghanistan but with a host of Central Asian countries, which can transport natural gas to India. It makes sense for India because it can bypass Pakistan when conducting trade with these partners. Pakistan does not allow overland transit for Indian entities.

India and Iran signed an agreement in May 2016 to commence work on the port. At the time, the development of the port was to be divided into two phases. India agreed to invest $500 million developing two berths in the first phase of the project, along with $1.6 billion for a rail link from the port to Afghanistan. Phase 1 was inaugurated by Iran’s President Hassan Rouhani in December 2017.

India wavers, China steps in?

Due to repeated delays on the project from India’s end, Iran was said to be mulling a proposal to bring China on as a partner for the project. China’s participation would go against India’s interests, not only because it would lose out on significant trade opportunities but also due to the fact that it would increase China’s footprint in the region.

During its 2+2 talks with the US last week, India made a case for its participation in the Chabahar port project, explaining how it would benefit Afghanistan from an economic standpoint - mainly due to direct connectivity with India. The rehabilitation and economic resurgence of the war-ravaged country is an urgent concern for the US, which has had a military presence there since the early 2000s. It is counting on India’s help to stabilise the Afghani economy.

India, Iran and Afghanistan decided to hold a more substantive round of talks on the subject in 2019, when the possible effect of sanctions on Iran will be more certain and the former receives an official go-ahead from the US for its participation. The major impetus behind this week’s discussions was to likely show that the three parties, especially India, were committed to developing the port.
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