Iran's Chabahar Port extension opens export door to Afghanistan, Central Asia for India

Iran's Chabahar Port extension opens export door to Afghanistan, Central Asia for India
Barred from trading via Pakistan, India sees Iran's Chabahar Port on the Gulf of Oman as an export gateway to Afghanistan and Central Asia.
By bne IntelliNews December 3, 2017

A long-awaited extension to Iran’s strategic Chabahar Port, which more than triples its capacity, was on December 3 inaugurated by President Hassan Rouhani.

The development is of great importance when it comes to India’s plans to rival China in exporting goods to Afghanistan and Central Asia. Chabahar, lran’s only oceanic port and located on the Gulf of Oman, is just 80km away from Gwadar port in Pakistan. The Chinese are developing Gwadar as their chosen export hub for the landlocked region to the north and northwest, while India, barred from transiting goods through Pakistan due to historical rivalries, are investing in Chabahar which is directly accessible from the Indian Ocean.

Despite its enthusiasm for using Chabahar to bypass Pakistan and compete with the Chinese, India has proceeded cautiously in investing in the port given Washington’s hostility to the world normalising trade and investment ties with Tehran since Donald Trump took office in January. The Iranians and Afghans have complained to New Delhi about delays in pushing the port development forward at an acceptable pace, but the Indians said they had experienced difficulties in finding suppliers to equip the port given anxiety among companies that fear being hit by US sanctions should they work on a major investment project in Iran.

The Shahid Beheshti extension at Chabahar required an investment of $1bn, with $235mn of that sum put in by India. It pushes the port’s annual capacity up to 8.5mn tonnes of cargo from 2.5mn tonnes.

"Through this port, goods will be delivered to neighbouring countries at cheaper prices and in a faster time," Rouhani said at the inauguration ceremony.

Khatam al-Anbia, a conglomerate owned by Iran's Islamic Revolutionary Guard Corps (IRGC), and subcontractors, including a state-run Indian company, carried out the construction of the extension.

Iran has plans to connect Chabahar with a railway running to the northeastern Iranian second city of Mashhad to further enable trade with Afghanistan and Central Asia. New Delhi, meanwhile, says it has earmarked up to $500mn for the development of the port along with related roads and railway lines. Chabahar is to go through further development stages over the next decade or more.

In October, a first consignment of Indian wheat reached Afghanistan via Chabahar.

Chabahar also boasts an international airport and Iranian navy and air force bases, adding to its strategic value.