Analysis: Chabahar-Gwadar port contest does not end in a tie

Although both countries signed a MOU on development of the port in May 2014, there is little to report about progress

In an ideal world, India’s partnership with Iran in Chabahar completes its strategic goal of encircling Pakistan, as the port’s development aims to bypass her in Afghanistan. Even Afghanistan’s CEO Abdullah Adbullah shares former Afghan president Hamid Karzai’ ambition of forging deeper ties with Delhi to lessen dependence on Islamabad.



Chabahar port plans
Though both countries signed a memorandum of understanding (MoU) on development of the port in May 2014, there is little to report about progress on the ground. As per the MoU, the Chabahar port will be used to ship crude oil and urea. India aspires to set up a multi-purpose cargo and container terminal besides petrochemical and fertilizer plants.

Last year, India allocated mere $150 million for work on the Iranian port situated 72km west of Gwadar harbour while core issues, such as land allocation for its special economic zone (SEZ), face teething problems. With sanctions recently lifted, India is promising the moon and beyond to Tehran in its bid to maximise benefits of the project.

Last week, the Indian petroleum minister wooed Iran by projecting likely investment of the private sector of up to $20 billion. Delhi has expressed interest in setting up an LNG plant and a gas cracker too. Unlike the case of China in Gwadar, the Indian official was merely promising what the private sector can do given the enabling conditions.



Many ambitious proposals made by the Persians and the Indians are too nascent for investment to be pledged and deadlines to be set. Though both sides don’t lack commitment, tricky issues of competitive pricing and tariffs require more than political will. Some reports suggest that India has been offered gas at a cheaper rate of $2.95 per mmBtu but Delhi isn’t happy still. Be it Tehran or Delhi, bureaucracies remain lousy and old-fashioned, even in the absence of UN sanctions.

Is it a win for South Asia?
India wants to grab Chabahar but without a clear plan about its utility. The wish-list is recent and evolving. The bigger questions of feasibility of logistical linkages still remain unanswered. Like Pakistan and India, Iran too is competing for the Afghan market and reconstruction opportunities. The same holds ground regarding trade and services for Central Asian republics. The sanction may have gone but financial liquidity is not there yet. The road network and rail link vital to connect Chabahar to Central Asian states are capital intensive and time-consuming projects. The billion-dollar question here is whether India will come forward like China has, and will the Persians accept it?

In the case of China-Pakistan Economic Corridor, no such hiccups exist. Even a change in Islamabad’s power circles in the wake of Panama Papers won’t impede ventures associated with the Chinese corridor.

Sink or swim?
Meanwhile, the Gwadar project has been vigorously pursued by Pakistan and China alike. Balochistan government and security forces have employed political resources and tactical measures alike to impose the state’s writ. With the arrest of senior level Indian naval spy, Islamabad may not treat southern Balochistan as its outpost, which was the case for decades.

Many analysts believe India has greater interest in Chabahar serving as a base for its blue water navy than a harbinger of cross-Central Asia trade. In the same vein, numerous Chinese observers foresee Gwadar port to be as much its economic hub as a strategic naval outpost.

Notwithstanding, Iran has its own share of problems in the predominantly Sunni and marginalised Sistan-Balochistan region. In an unprecedented move, Ayatollah’s praetorian guards are holding full-dress drills with its latest weaponry near Pakistan border. Bypassing the political government, the Revolutionary Guards commanders have been hurling veiled threats to Pakistan. For post-sanction theocratic states, balancing between economic ambitions and strategic aspirations is a tall order. China, for that matter, won’t be pleased over such overture for India is not a bigger investor in Iran than her.



India’s clandestine activities in Southeastern Iran and Tehran’s frustration over Pakistan’s exposure of Indian designs against the country have a lot to do with the mess in Chabahar. Earlier this year, Iranian ambassador publically warned the Indian government for lack of investment in the port.

Things may have paced up a bit between Tehran and Delhi more recently; there are many a slip between the cup and the lips. However, Islamabad has little time to waste in clearing mess in Makran region and Balochistan. Only climate change isn’t to be blamed for mounting temperature of the Arabian Sea.

Naveed Ahmad is a Pakistani investigative journalist and academic with extensive reporting experience in the Middle East and North Africa. He is based in Doha and Istanbul. He tweets @naveed360