Chabahar Port Agreement Is Milestone Deal

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On Friday, May 27, 2016, just days after India and Iran signed an agreement to develop the Port of Chabahar, Tehran indicated that the deal is not meant to exclude other nations in the region from participating. Earlier in the week, India’s Prime Minister, Narendra Modi, visited Iran to announce his county’s intention to invest $500 million into developing the Port of Chabahar. Access to this port will allow India to bypass Pakistan’s Port of Gwadar and will increase access to trade in Central Asia, Afghanistan, and Russia.

The Chabahar port agreement is a “milestone” deal between the two nations. The port is located in the Gulf of Oman, along Iran’s southern coastline about 50 km from the Pakistani border. Tehran has noted that India and Iran have maintained good relations for some time. Hehdi Honerdoost, the Iranian ambassador to Pakistan, who talked to Pakistan’s “Dawn Online” in Islamabad, explained that even while sanctions were placed on Iran, India continued to import oil from the country.

Development of the Chabahar port is not meant to create competition between it and the Port of Gwarder, which is located about 100 km away in Pakistan. Discussion about the close proximity of the two ports revealed that if anything, the two trading hubs should complement each other. Honerdoost has stated, “The deal is not finished. We are waiting for new members. Pakistan, our brotherly neighbors, and China, a great partner of the Iranians and a good friend of Pakistan, are both welcome.”


Reasons for the recent move to invest in the port by India include Pakistan’s reluctance to allow India to export goods across its borders, and until recently, the country has not permitted Afghani goods to be imported to India. There have also been indications that India might be concerned about the increase of trade occurring within the China-Pakistan Economic Corridor (CPEC).

Dr. Peter Frankopan, author of “The Silk Roads: A New History of the World” and an Oxford University historian, in an interview with the “Diplomat,” explained that China has a strong interest in aiding in the development of Pakistan ”including energy provision, national security, and of course. . . CPEC.” Infrastructure will be a starting point for this cooperation as China pursues its “One Belt, One Road” agenda.

The relationship between India and Iran may extend beyond this initial Chabahar Port agreement. The Indian Express reported India has plans to “invest billions in setting up industries–ranging from aluminum smelter to urea plants…” within Iran’s free trade zone. Moreover, Iran’s abundant supply of natural gas provides energy enough for India’s commercial ambitions. Supportive of these efforts India Railways’ PSU, Indian Railway Construction Corporation (IRCON), plans to construct a railway from Chabahar north to Afghanistan’s border, which will facilitate trade in the region.

The milestone deal to develop the Chabahar port will allow India to export and import goods more easily than if it were trying to traverse Pakistan’s transportation system. This agreement will be the first “overseas” project for an Indian state-owned port of its kind, and while China and Pakistan have been offered to join in cooperation, neither country has reciprocated a desire to do so.

By Joel Wickwire
Edited by Leigh Haugh

NDTV: India-Backed Chabahar Port Not a Rival to Gwadar, Iran Tells Pakistan
The Diplomat: Interview: Peter Frankopan
The Express Tribute: Pakistan welcome to join Chabahar deal: Iran
The Indian Express: Chabahar Free Trade Zone Will Enable Us Direct Access to Iran and Other Countries: Gadkari
The Indian Express: Chabahar deal ‘not finished’: Pakistan, China welcome, Says Iran
All Article Images Courtesy of Baluchistan’s Flickr Page – Creative Commons License