Context: The first Trilateral Working Group Meeting between India, Iran and Uzbekistan on joint use of Chabahar Port was held virtually on Monday. In a statement, Ministry of External Affairs said, India welcomes the interest of Uzbekistan to use the Chabahar port as a transit port. This will open up economic opportunities for the traders and business community of the region. Besides Uzbekistan, other Central Asian countries have also shown interest in using this port. India wants to cooperate closely with regional countries on this issue. The port is being developed by India, Iran and Afghanistan to boost trade ties among the three countries in the wake of Pakistan denying transit access to New Delhi. Located in the Sistan-Balochistan province on the energy-rich Iran's southern coast, the port can be easily accessed from India's western coast, bypassing Pakistan. It is considered to be a major transit point to connect with several Central Asian countries.

Where is Chabahar port?

• Chabahar Port is a seaport in Chahbahar in southeastern Iran. Its location lies in the Gulf of Oman.
• Chabahar Port is the one and only Iranian port with direct access to the ocean. It lies in the Gulf of Oman.
• It is a seaport in South-Eastern Iran.
• It is the only Iranian port with direct access to the ocean. In the 1990’s under the Ashgabhat agreement, India partially built the port with the intention of providing access to the Central Asian region and Afghanistan, bypassing Pakistan.
• A series of agreements were signed by the Indian Prime Minister and his counterpart, the  President of Iran in May 2016 in Teheran for developing the Chabahar port.  This move was initiated to promote exports to Iran and also possibility of connectivity to the Central Asian region and Afghanistan.

Recent developments

• India, the world's third biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran was its third largest supplier after Iraq and Saudi Arabia till recently.
• Prime Minister Modi visited Tehran in May 2016 with an aim to craft a strategic relationship with Iran and expand India's ties with the West Asia.
• During the visit, India and Iran signed nearly a dozen agreements, centrepiece of which was a deal on development of the strategic Chabahar port.
• Later, India, Iran and Afghanistan signed a trilateral agreement providing for transport of goods among the three countries through the port.
• In February 2018, Rouhani visited India, becoming the first Iranian President to visit India in a decade. During his visit, the two sides signed a dozen agreements.

Why this port is of interest to India?

• Counter to Pakistan’s Gwadar Port: India believes the port is critical to its interests and wants to develop it as a counter to Pakistan’s Gwadar port which was built with Chinese assistance
• Bypass Pakistan: The port will allow India to bypass Pakistan to transport goods to Afghanistan and Central Asia using a sea-land route
• Helpful in maritime commerce: Chabahar Port lies in the Persian Gulf in Iran and will help India in expanding its maritime commerce in the region
• It also provides opportunities to Indian companies to penetrate and enhance their footprint in the region
• From Chabahar, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 kms from the port.
• The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan’s Garland Highway, setting up road access to four major cities in Afghanistan — Herat, Kandahar, Kabul and Mazar-e-Sharif
• Chabahar port will ensure in the establishment of a politically sustainable connectivity between India and Afghanistan. This will in turn, lead to better economic ties between the two countries.
• With Chabahar port becoming functional, there will be a significant boost in the import of iron ore, sugar and rice to India. The import cost of oil to India will also see a considerable decline. India has already increased its crude purchase from Iran since the West imposed ban on Iran was lifted.

Benefit to Iran

• As India is Iran’s largest customer hence the memorandum will help to increase economic growth and investment.
• It will provide regional growth and prosperity by employment generation and gdp growth.

Challenges in developing Chabahar Port for India

• Competition from China: The India-China competition for regional dominance has a new playground in Chabahar as China is also busy developing Gwadar port and plans to use it to connect it to CPEC and has also completed the lease agreement for 40 years.
• USA IRAN Tensions: Engagement over Chabahar can bring India and Iran closer which would impact the relations between India and USA as the tensions between USA and Iran over Iran s nuclear policy and enrichment program and the strict sanctions imposition and subsequent removal is yet to fully subside.
• The Taliban Factor: The trade between Indian and Afghanistan which has high potential is still fraught with many logistical challenges even after bypassing the Pakistan factor.

Road Ahead

• We need to make full use of Chabahar Port to have a presence in Central Asia. The future of India- Afghan ties are also highly dependent on what we do in Chabahar. So, it is strategically dependent as well as commercially important for us. Iran is important for us from International Relation perspectives as well as from a strategic point of view because it is the gateway into Afghanistan and Central Asia. Costwise and timewise as well Chabahar port makes a lot of sense especially for Indian exporters and this is something we need to focus on. The government has done its bit and is continuous to do its bit. The businesses need to take up the initiative and take this particular aspect forward.