Chabahar breaks Pak stranglehold
by Sandhya Jain on 31 May 2016 6 Comments
The India-Iran-Afghanistan trilateral would be a momentous development even if it did not coincide with the Bharatiya Janata Party’s convincing victory in Assam and gains in other States. The Chabahar port and connectivity project leapfrogs Pakistan’s implacable opposition to an Indian presence in Afghanistan and will transform the Iranian port into India’s much needed gateway to the markets of Afghanistan, Central Asia, and eventually Europe. It will also offset Beijing’s burgeoning influence in the Indian Ocean region.


That the signing of the final deal by Prime Minister Narendra Modi in Teheran on May 24, 2016 also coincided with the second anniversary of the BJP-led National Democratic Alliance is icing on the cake. From struggling for coherence after the rout by the Aam Aadmi Party in Delhi last year, followed by ignominy in Bihar, the Modi Sarkar has recovered composure and confidence with the Assembly elections of 2016. The scale of the Congress debacle has decimated the latter’s role as driving force behind opposition unity and punctured Bihar Chief Minister Nitish Kumar’s fantasy of emerging as the leading Prime Ministerial candidate for 2019.


This adds sheen to the Prime Minister’s foreign policy manoeuvres, especially his dream of linking India with the Asian and European landmass by road, rail, and sea, for faster economic growth. Indeed, Chabahar port has been central to New Delhi’s vision of economic buoyancy for over a decade; trilateral agreements were signed in 2003 and 2012. But it was only in 2015 that Road Transport and Highways Minister Nitin Gadkari signed the first framework agreement in Tehran; last Tuesday Modi clinched the deal to build and operate the port.


The plan is to develop a free-trade corridor of road and rail networks from Chabahar, Iran’s only port with direct access to the ocean, to Afghanistan. India will help develop the 500-km long Chabahar-Zahedan railway line. It has already built the $135 million Zaranj-Delaram highway to Iran and handed it over to Afghanistan in 2009, while Iran constructed the road connecting Chabahar to Zahedan. The land and rail links to Central Asia, critical to Modi’s northern thrust, will be realised when the $500 million port is completed.


The port will sharply reduce the distance, time and cost for trade through the three countries. The distance between Kandla (Kutch, Gujarat) and Chabahar is less than the distance between New Delhi and Mumbai, and the Chabahar free trade zone is expected to attract investments of over Rs 1 lakh crore. The proposed International North-South Transport Corridor will move goods to Central Asia and Russia, linking the trade of all three countries with energy-rich nations in Central Asia, and enable India to diversify its sources of energy.


Chabahar is a feather in the Modi government’s cap because of its immense strategic importance. Iran is energy-rich and there is vast potential for cooperation in the production of aluminum, petrochemicals, and steel, and in cutting edge technologies such as ICT, biotech, nanotech and aerospace, among others.


Though both sides indulged in diplomatic niceties regarding the non-confrontational nature of the collaboration, with Rouhani inviting other countries to join in developing the port, Islamabad’s precarious economy can hardly permit such participation. On this part, Modi, who has repeatedly risked domestic rebuke in pursuit of an understanding with Prime Minister Nawaz Sharif, declared that “trust not suspicion; cooperation not dominance; inclusivity not exclusion” are the driving spirit of the Chabahar agreement.


The India-Iran-Afghanistan deal could trigger other developments of far-reaching consequences. Hardly had the agreement been inked than the US Senate Foreign Relations Committee asked the State Department if the accord violated international sanctions. Although Washington and Europe claim to have lifted sanctions against Iran following the nuclear deal curbing Tehran’s nuclear programme, many vexatious restrictions, linked to human rights and terrorism, remain.


Washington professes sympathy for India’s quest for a trade route to Afghanistan and Central Asia, and itself desires India’s friendship as a counterbalance to the rising strength of China; but Tehran chaffs at intrusive vigilance regarding its international outreach. Rouhani hinted as much when he mentioned that problems with inter-bank exchanges prevented India from settling $6 billion due for past purchases of oil.


Although no major world capital has commented upon events in Brazil, the bloodless coup against President Dilma Rousseff can hardly go unnoticed. Brazil is a key member of the BRICS bloc that is taking steps to end the financial stranglehold of the US-led Washington Consensus. The BRICS New Development Bank has begun extending loans and could emerge as an alternative source of finances for non-Western countries.


Russia and China have been working on an alternative to SWIFT (Society for Worldwide Interbank Financial Telecommunication) that is used by banks worldwide to clear international financial transactions. SWIFT is an important financial weapon and was used in 2012 to de-list the Iran central bank and other financial institutions. This stopped billions of dollars’ worth of oil and export sales from being repatriated to Iran, and was intended to choke its economy. Now, with the nuclear deal not providing the desired relief, Tehran can be expected to lobby for expediting the parallel international interbank exchange system. This will break the hegemony of the US dollar and trigger a major realignment of the international economic system.


New Delhi and Tehran, acknowledging the multiple threats to peace and stability in the region, particularly the arc of instability running through Afghanistan, Iraq, Syria and Yemen, will also cooperate in intelligence-sharing to combat terrorism, drug trafficking and cybercrime. Their defence and security establishments are expected to increase interactions on issues of regional and maritime security.


When Prime Minister Modi visits Afghanistan to inaugurate the Salma Dam, he would be visiting a nation that has suddenly become the fulcrum of a host of road and rail networks planned by various countries, crisscrossing Asia, Central Asia, and West Asia. Having successfully delivered the highway to Iran, the Parliament building, and the 42MW Salma irrigation and electricity project, besides training and other assistance to the Afghan Army and police officers, India can do much to help this strife-torn nation emerge as an economic powerhouse. A beginning must be made to revive Afghan agriculture that was destroyed by the Taliban and wean farmers away from the destructive opium trade. Russia, Iran and India have equal stakes in this endeavour. 

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