Chabahar Port Deal has been signed between India & Iran. India inked this significant 10-year deal aimed at extending the development and operational scope of the Chabahar port situated along the Gulf of Oman. This marks a pivotal stride in India’s enduring quest to establish a vital transit route for its goods, facilitating access to markets spanning Iran, Afghanistan, Central Asia, and beyond.
In this agreement between, Indian Ports Global Limited (IPGL) and the Ports and Maritime Organization of Iran (PNO), India has committed a substantial investment totaling $370 million towards the port’s development and financing endeavors.
USA Cautions: Sanctions May Cast Shadow on Chabahar Port Deal
Hours after the news of the deal was reported, the USA responded with cautions to the parties regarding possible sanctions that could hinder the progress of this deal.
This is being seen as a Shift in US Policies, because, in 2018, US had exempted India from certain sanctions related to development of Chabahar Port & connecting the port to Afghanistan vide a railway network. USA had granted exemptions under section 1244 of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) to facilitate certain activities aiding the reconstruction and development of Afghanistan. This move was deemed crucial for U.S. national security interests in Afghanistan at the time. However, the geopolitical picture has drastically shifted by 2024. With the withdrawal of American forces and resources from Afghanistan in 2021 & Taliban ruling in Afghanistan, the United States now maintains minimal engagement and interest in the current state of affairs in Afghanistan.
At the same time, India should have conducted or may have already conducted the necessary analysis and developed a backup plan in case US sanctions begin to impede the progress of the deal. Indian business entities and diplomatic efforts in the Middle East must not be jeopardized in the broader scheme of things. It remains unclear whether the content and resolutions in the agreement violate the exemptions themselves or if the exemptions have been nullified due to the USA’s exit from Afghanistan. Both India and Iran have asserted that the deal is historic and immensely beneficial, providing vital access to markets in Afghanistan, Central Asia, and beyond, including Iran.
The Geostrategic Brilliance by India: Chabahar deal is one more Diamond in the Necklace:
India has been silently working to mitigate the risks posed by Chinese “String of Pearls” strategy in the Indian Ocean, part of which, is Chinese ownership of Gwadar Port in Pakistan, at a hugely important location, at the mouth of Persian Gulf and outside strait of Hormuz. Major portion of India’s oil imports pass through Gulf of Oman which can be endangered by PLA Navy from Gwadar Port during conflicts, in addition, neutralize Indian Navy’s dominance in Indian Ocean.
India’s answer is called “Necklace of Diamonds”. The response to Gwadar Port in Pakistan is development of Chabahar Port in Iran, just 76 Nautical Miles far. Development of Chabahar Port is part of a broad Indian strategy called “Necklace of Diamonds” which entails development of ports in Chabahar (Iran), Access to Changi Naval Base (Singapore), Military Access to Sabang Port (Indonesia), Indian Navy’s Access to Duqm Port in Oman and Installation of Coastal Radar Station in many friendly island countries and developing an Indian naval base in assumption island, Seychelles. India is also strengthening the necklace of diamonds by growing relations with Japan, Mongolia & Vietnam.
The “String of Pearls” initiative, spearheaded by China, poses a significant threat to India’s maritime security, and undermines its strategic advantage in the Indian Ocean. This strategy compels India to allocate substantial resources to defense, diverting attention from inclusive growth initiatives. China’s expanding military presence and influence in the Indo-Pacific and Indian Ocean regions encircle India, impacting both trade and security in Indian waters. In line with this initiative, China has forged a strategic partnership with India’s rival, Pakistan, financing the construction of the Gwadar Port. Situated strategically, Gwadar serves China’s commercial interests while potentially serving as a future overseas naval base for the Chinese People’s Liberation Army Navy. As part of the same strategy, China has invested funds in Chittagong port (Bangladesh), Hambantota Port (Sri lanka), Gwadar Port (Pakistan).
So, India has struck a geo-strategic brilliance in achieving the deal, when the India-Middle East-Europe Economic Corridor plan is effectively halted due to Israel-Gaza war.
India De-emphasizes Sanction Threats:
India has played down the concerns around possibilities of US Sanctions being a hurdle to Chabahar port deal. Indian foreign minister Mr. Jayshankar has stated that the port operation in Chabahar will be beneficial for the whole region and that the USA has appreciated the project in past due to its larger relevance.
Benefits of the India-Iran Chabahar Deal for India:
- With Pakistan denying a land route, this deal offers a direct trade route to Afghanistan & Central Asia, effectively bypassing Pakistan.
- India’s geo-political and trade significance is poised to escalate, bolstering the strategic position.
- It checkmates Pakistan Gwadar Port under Chinese control and integrates with International North South Transport Corridor (For access to Russia)
- India’s stance of independent & bold foreign policy is re-affirmed, mirroring India’s decision to procure S-400 Air defence missile system from Russia, despite US Sanction threats.
- India will continue & reinforce to maintain naval superiority in the Indian Ocean and Indo-Pacific regions, safeguarding Indian waters against potential Chinese interference in trade and naval activities, thereby keeping alive the “Malacca Strait Choke Point Dilemma” for China
In the paradox of international diplomacy, it is difficult to articulate a foreign policy with a philosophy of “One Size fits all”. India has taken a shift to a new horizon of foreign policy, wherein, India exercises & endorses multi-polar foreign policy, while maintaining an intricate balance between nations’ goal & world affairs.
India regards Russia as a reliable friend, while also maintaining strong trade ties and a natural partnership with the USA. Despite sanctions, India persistently purchased Russian oil and redistributed it to Europe to stabilize oil prices globally and meet its own energy requirements affordably.
India also maintains significant and amicable relations with both Israel and Iran simultaneously. Amidst global instability, India collaborates with Japan, Vietnam, Indonesia, and tactfully engages with Taiwan to promote stability in the South China Sea amid expansionist behavior from China. India has demonstrated considerable wisdom by averting a potential conflict with China and opting for strategic patience in response to Chinese aggression along the Indian border. Instead of escalating tensions, India has pursued dialogue and negotiation to address this sensitive issue till now.
India’s maturity as a nation, adept handling of global issues, burgeoning economy, vibrant democracy, strategic significance in the global south, promotion of global trade and diversity, and status as a mature nuclear power underscore its suitability for permanent membership in the United Nations Security Council. India’s capabilities in fostering balance and peace between Israel and Iran is a fresh & bright possibility.
Recognizing India’s pivotal position, the USA should move beyond sanctions threatening and utilize India’s influence to de-escalate tensions between Iran and Israel. India’s decision to establish a strategic foothold at Chabahar, amidst its challenges with China, underscores its efforts to enhance trade routes and cultivate ties with Iran. This move holds the potential to serve as a conduit for dialogue between the USA, Iran, and Israel, further emphasizing India’s role as a bridge-builder in Iran-Israel tensions or a two-state solution to the Gaza War. Hence, as rightly said by the Indian Foreign Minister, People should not take a narrow view of it.