China sabotaging India-Iran plans
India’s plan to develop Chabahar port in Iran has evidently run into rough weather with strains developing in Iran-US relations after fresh sanctions were imposed against Iran in the wake of missile development, and China holding out baits to Tehran to keep India at bay. It is eight months since India and Iran signed the loan agreement for the port’s development, but the Iranians are still dragging their feet, giving rise to the feeling that they are having a re-think. For the record, the Export-Import Bank of India (Exim Bank) is still awaiting completion of an application from the Port and Maritime Organisation of Iran with instructions to disburse the amount. According to the agreement, the contract will be activated from the day the loan is disbursed.
There is indeed more to the Iranian dragging of feet than meets the eye. Chabahar port is located on the Gulf of Oman, near Iran’s border with Pakistan. It is less than 100km from Pakistan’s Chinese-constructed port of Gwadar, part of a project to open up an energy and trade corridor from the Gulf to western China. There is a clear intent by China to sabotage India’s bid for a foothold in the region by preventing the construction and commissioning of an India-aided port in Iran which could dilute China’s bid to establish hegemony in the region. In the battle of high stakes, the China-Pakistan duo is working in tandem to clip Indian influence. It remains to be seen now how India would deal with the challenge. For India, the benefit from easy access to Chabahar would be to connect with Afghanistan and energy-rich Central Asia through the Jawaharlal Nehru and Kandla ports. India has also built a 218km-road link connecting Delaram with Zaranj in Afghanistan, which is adjacent to Iran’s border. Also, the port will promote Indian strategic interests in the Gulf and Strait of Hormuz.
A 10-year commercial contract for the development and operations of Chabahar port was signed between India Ports Global Pvt. Ltd and Iran’s Arya Banader in May last in Tehran during the visit of Prime Minister Narendra Modi. India Ports Global is a consortium of Jawaharlal Nehru Port Trust and Kandla Port Trust. The agreement commits India to equipping and operating the terminal for 10 years. According to the terms of the agreement, India has to make $150 million credit available for the development of phase one of Chabahar port within four months of receiving the application. India also has to equip the cargo and container terminals with $85 million worth of equipment within one-and-a-half years of funding. All this would be in jeopardy if the first steps in fulfilment of the deal are not taken expeditiously.