Meeting on Chabahar Port - India-Iran-Central Asia

TWG Meeting on Chabahar Port

The first Trilateral Working Group Meeting between India, Iran and Uzbekistan on the joint use of Chabahar Port was held virtually. The participants discussed the joint use of Chabahar Port for trade and transit purposes and enhanced regional connectivity. India has proposed to hold "Chabahar Day” on the sidelines of the International Maritime Summit to be hosted by India in January 2021.

Past related news

Chabahar Port: It is located on the Gulf of Oman and is only 72 km away from the Gwadar port in Pakistan which has been developed by China. The port serves as the only oceanic port of Iran and consists of two separate ports named Shahid Beheshti and Shahid Kalantari

Background: In May 2016, India, Iran and Afghanistan signed the trilateral agreement which entailed the establishment of Transit and Transport Corridor among them using Chabahar port in Iran as one of the regional hubs for sea transportation.

Construction of a rail line from Chabahar port to Zahedan, along the border with Afghanistan as an alternate trade route to Afghanistan and Central Asia, was also a part of it. The state-owned Indian Railways Construction Ltd. (IRCON) signed a Memorandum of Understanding (MoU) with the Iranian Rail Ministry to provide all services, superstructure work and financing (around USD 1.6 billion).

Reasons for Excluding India:

Iran’s Stand: In July 2020, Iran decided to proceed with the rail line construction on its own, citing delays from the Indian side in beginning and funding the project.

India’s Stand: IRCON completed the site inspection and feasibility report, and had been waiting for the Iranian side to appoint a nodal authority.

Although the project has secured a special waiver from the USA, India is hesitant to deal with the construction company which has links with the Islamic Revolutionary Guard Corps (IRGC) and is under sanctions. The IRGC is a hard-line force which operates its own military infrastructure in parallel to Iran’s regular armed forces. In April 2020, it launched Iran’s first military satellite, Noor.

Fear of sanctions by the USA has also impacted Indian interest in the Farzad-B gas field project of Iran.

Significance:
Trade: It is being considered a gateway to golden opportunities for trade by the three countries with other Central Asian countries in the wake of Pakistan denying transit access to India.

Security: China is aggressively pursuing its own Belt and Road Initiative (BRI) under the One Belt One Road (OBOR) project. The port can also act as a counter to Pakistan’s Gwadar Port, which is being developed with Chinese investment.

Connectivity: In future, the Chabahar project and the International North-South Transport Corridor (INSTC) will complement each other by optimising Indian connectivity with Russia and Eurasia.

Farzad-B Gas Field

It is located in Persian Gulf (Iran) and the contract for exploration of the field was signed in 2002 by Indian consortium comprising Oil and Natural Gas Corporation Limited (ONGC) Videsh, Indian Oil Corporation and Oil India.
The contract expired in 2009 after the declaration of commerciality of the field, based on the gas discovery. Since then, the consortium has been trying to secure a contract for the development of the field.
The major dispute between India and Iran was over the setting up of two pipelines, and also over money to be quoted on the development plan.
Around 75% of the deal was finalised by May 2018, when the USA unilaterally withdrew from the nuclear deal and announced sanctions on Iran.
In January 2020, Iran clarified that it would develop the field on its own and would like to involve India appropriately at a later stage.

Source: TH

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