The Chabahar Port Project: Why China Matters for India

Image Courtesy: Financial Times

On 23rd May 2016, in a strategic mission to reach out to the regions of West and Central Asia, India reached a trilateral agreement with Iran and Afghanistan known as the Chabahar Agreement. Chabahar is a city in the Southeastern Iran’s Sistan-Baluchistan province near the Gulf of Oman. With this agreement India will invest US$500 million to develop a strategically important Chabahar port, approximately 72-km away from Pakistan’s Gwadar port—another equally important port constructed by China in Pakistan’s Balochistan province. The milestone project was initiated with an ambition to produce a big-scale geopolitical impact for both India and the region. For India, the project is vital for its geo-strategic calculations to strengthen its presence in both Central and West Asia.

Though India had a desire to establish a maritime-based strategic footing in West Asia, it has not been able to conceive any formidable strategy for a long time. The proposal to develop the Chabahar port was first conceptualised in 2003 at the Delhi Declaration, however the proposal failed to make significant progress. The West-imposed sanctions against Iran over its clandestine nuclear programme have greatly affected the initiative. In the meantime, India also holds negotiations with Afghanistan on the issue of Chabahar, because the development of Chabahar port in Iran is also vital for India-Afghanistan relations. India has already constructed a 220km-long Zaranj-Delaram highway also known as ‘Route 606’ in 2009, linking Afghanistan’s ‘Garland Highway’ which is connected to the Chabahar through the existing Iranian roads.

One of the major factors that propelled India’s initiatives in Chabahar has been its strategic ambition in Afghanistan.

However, the start of the nuclear negotiations between Iran and the P5+1 gave a new momentum for both India and Iran to reconfigure their efforts. And, when a final agreement on the negotiation was plausible in May 2015, India’s Minister for Shipping Nitin Gadkari signed a MoU with the Iranian Transport Minister to lease two berths at Chabahar port as multi-purpose cargo terminals. Later, the project gained further momentum when Prime Minister Narendra Modi met the Iranian President Hassan Rouhani alongside the Shanghai Co-operation Organisation (SCO) summit at the Russian city of Ufa in July 2015.

With the signing of the Joint Comprehensive Plan of Action (JCPOA) between P5+1 and Iran on 14 July 2015 and the end of nuclear impasse, India and Iran has hastened their engagement on the project. Then, few weeks after JCPOA was announced in Vienna, the Iranian Foreign Minister, Javad Zarif, travelled to India and discussed Chabahar along with other issues. Finally, on 24 February 2016, the Union Cabinet chaired by Prime Minister Narendra Modi approved a US$150 million proposal for the development of Chabahar port in Iran.

India’s Geo-strategic Motivation and the China Factor

Clearly, the signing of Chabahar agreement was not only an important development in the trilateral Afghanistan-India-Iran relations but transformed the geopolitical dimensions of the region. As Robert D. Kaplan mentioned in his influential essay Center Stage for the 21st Century: Power Plays in the Indian Ocean, the Indian Ocean is becoming an epicenter of the global power struggle and most importantly, the rivalry between the two Asian power—China and India. That is where the strategic importance of Gwadar and Chabahar lies respectively for both sides.

One of the major factors that propelled India’s initiatives in Chabahar has been its strategic ambition in Afghanistan. Historically, land-locked Afghanistan has been dependent on Pakistani territory for access to maritime trade and had to comply to numerous hurdles with the Pakistan’s government. Pakistan has time and again, used this tool to mount pressure against Afghanistan.

For India too, the port project will be a potentially safer alternate transit access to Afghanistan escaping the trouble land-route passing through Pakistan. Chabahar will also provide India further access to other energy rich Central Asian countries like Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan. The port will also serve as an outlet to the International North South Transport Corridor (INSTC), connecting the Indian Ocean and the interior Eurasia. Unlike the existing Bandar Abbas which is located at the Straits of Hormuz, Chabahar is strategically significant because in any conflicting situation between Iran and UAE or any other Gulf countries and the possible shut-down of maritime activities, Chabahar will not be affected.

Meanwhile, China’s initiative of ‘Belt and Road’ or popularly, ‘One Belt One Road’ (OBOR) has increasingly become crucial for China’s foreign policy in the recent times. OBOR is a political and economic strategy with a thrust to expand its influence in the whole of Eurasia and the Northeast Africa by conjoining the twin initiatives of ‘Silk Road Economic Belt’ (SREB) and the ‘21st Century Maritime Silk Road’ (MSR) through trade and infrastructure collaborative network connecting along the trade routes of the ancient “Silk Road”. Chinese media report suggested that, it will cover “nearly two-third of the world’s population and one-third of the global GDP” and described as “the most significant and far-reaching project the nation has ever put forward”. Therefore, given the centrality and relevance of this initiative in China’s foreign policy, its outcome is likely to not only decide China’s diplomatic course of action but also determine the nature of its foreign relations with the outside world. India is not going to be an exception—OBOR will have a significant impact on India’s strategic calculus in the region. This became a matter for concern for India’s strategic approach, since both Central and West Asia lies along the ‘Road and Belt’.

Again, China has always been keen on gaining a strategic footing in the Indian Ocean and Gwadar has been an attractive option. This is the backdrop in which China has been associating Pakistan in building the China Pakistan Economic Corridor (CPEC) worth US$54 billion—described as a “flagship project” for OBOR—linking the Gwadar port with Xinjiang in Western China to enhance trade with Pakistan as well as other countries in the region. For China, it strengthens its bond with Pakistan—an ally that President Xi Jinping consider as China’s “iron brother”. Therefore, since 2013, through the Belt and Road, China has been pushing its efforts to expand its overland Silk Road through Pakistan, and Iran is going to play a crucial role due to its geostrategic position.

Some Obstacles

Although the Chabahar venture was indeed a remarkably bold step for India, a number of glitches and hurdles need to be addressed and overcome. It is important to note that India-Iran bilateral relations are rather complex due to various extraneous factors. As Iran continues to be crucial for India, Iran’s ties with China are also important. Since China is a long term partner of Iran, expectations over India’s geo-strategic interests may not match with Iran’s interests all the time. China is already Iran’s largest trading partner, an important supplier of arms and other military hardware and technology. China has always been crucial to Iran’s foreign policy strategy; therefore, Iran will not like to take any risk which may incite China—a country which has supported Iran including its nuclear policy. In this regard, it is extremely difficult to predict Iran’s strategic trajectory.

While potentially worrisome for India, many countries are fascinated by the US$54 billion CPEC. With the possible inclusion of new states in the project, the possibility of Iran’s inclusion also emerged. For this reason, both China and Pakistan has extended invitation to Iran. In fact, there is speculation about Iran choosing CPEC as a preferred trading option. In September 2015, on a side-line meeting with the Pakistani Prime Minister Nawaz Sharif at the 71st UN General Assembly in New York, the Iranian President Hassan Rouhani has apparently expressed his country’s interest to be part of CPEC.

While competition and cooperation are part of each country’s interests, China is now India’s largest trading partner.

Again, in 2011, at the Iran Oil Show, Iran signed a deal with China, providing China exclusive rights to several Iranian oil and gas fields. According to the Iranian official sources, 166 Chinese companies attended the show, making them the most numerous foreign participants in that commercial exhibition. Thus, using its financial, manufacturing and trading capacity, China has expanded its sphere of influence in the region. China has also been engaged in various efforts to ‘strategically encircle’ India through various ports located in India’s neighborhood such as—port of Sittwe in Myanmar, Chittagong in Bangladesh, Hambanota in Sri Lanka and now the Pakistani port of Gwadar.

Besides, there are other transformations in the recent times with direct or indirect implications on India’s strategic calculations. On 27 December 2016, the so-called India’s “all-weather ally” Russia also went for an unprecedented meeting with China and Pakistan in Moscow. A month later, on 27 January 2017, Alaeddin Boroujerdi, the head of Iran Parliament’s Committee on National Security and Foreign Policy hinted its desire to join with China and Pakistan for trade, cooperation and greater role in regional affairs.

Options for India

So how will India approach these challenges? There is no doubt that China rise is a fact but since China’s strategy in the Indian Ocean appears to be troublesome, India needs to keep a close watch over China’s policies and capabilities. Whether OBOR represents a threat or an opportunity in India’s strategic imagination, India needs to sort-out the anxieties shaped by China’s vision of OBOR in order to maintain a firm position on it. If viewed through the lens of cooperation, the initiative can be an opportunity to be tapped for greater cooperation and connectivity—from trade to energy.

Apart from that, currently, India has neither the resources nor the capability to compete China’s enormous connectivity networks on a global scale. Therefore, priority must be given to modernise India’s transport and shipping hubs, ensuring coastal surveillance, expanding its maritime domain so on and so forth. Considering these impediments, the Chabahar should not be viewed in isolation, but from wider perspective. Given the enormous strategic potential of the project, India needs to offer well-thought strategic planning, timely action and cautious diplomacy to capitalise its outcomes. On India’s effort to gain greater access to the markets of Afghanistan and the Central Asian Republics (CARs), India needs to develop an effective trade and transport infrastructure network. For this priority should be given to maintain stability in the region, Afghanistan, in particular, because Afghanistan’s future is going to play a crucial role in ensuring the success of Chabahar port project.

While competition and cooperation are part of each country’s interests, China is now India’s largest trading partner. Though the continuous rise of China and its intensifying role has possibly made India’s calculation a challenging one, if India has to look for prospects, and not a looming crisis, then India can also use the Chabahar project as a regional cooperative mechanism to which all the countries in the region are invited to join. Alongside, India must promote and enhance other connectivity initiative like Bangladesh- China-India-Myanmar Economic Corridor (BCIM-EC)—as a corridor to the East. That way India can widen its strategic ambit.


Since the Central and West Asian region is a region with significant geostrategic importance for the entire global political balance, India being an emerging power needs to reinforce its presence and is vital for its geostrategic balancing. And Chabahar is an entry point of India’s strategic ventures in West and Central Asia and further into Europe through the International North South Transport Corridor (INSTC). However, the success of Chabahar and India’s geo-strategic ambition in the region to a large extent depend on to what extent India can convince Iran and Afghanistan. India should therefore deliver its commitment to gain the trust from both the countries—Iran, in particular—because, the real challenges would remain on delivery on the ground. It will require firmness and preciseness on India’s part to persuade Iran in order to sustain the momentum of cooperation. India’s failure to pursue the track will only hasten its isolation from any trade and connectivity arrangement.