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Iran’s economy depends mainly upon oil and gas production. But its major overseas port, Chabahar, has a critical geopolitical position. This fact has made the leading countries in the world invest billions in the Persian region. Iran’s Chabahar port has a strategic location that has made India, China, and other Central Asian countries interested in expanding trade through this port.
Due to China’s interest and investment in Pakistan’s Gwadar port, India focuses on the Chabahar port. The latter allows India to trade and travel to Central Asian countries, which previously was possible only through Gwadar port. Understand India’s strategy for expanding trade and why there is a conflict between China and India over the Chabahar port.
The importance of Chabahar as a major overseas port
Chabahar port is in the southeast part of Iran. It is a major overseas port that provides developmental opportunities to other countries due to its strategic location. Both India and China have expressed an interest in the Persian port by investing in Iran.
The Chabahar port improves India’s connectivity to Central Asia and Europe. The current Indian government is interested in Chabahar for more than just this reason. Trusted data sources have documented that the Chabahar port will allow India to reduce the shipment cost and the shipment time by 50% while trading. Further, it will also provide India direct access to Afghanistan without passing through Pakistan.
In contrast, China plans to dominate Iran. The port will allow it to access and control Iran’s rich natural resources. Iran has assured the Chinese government and the Indian government that they will be able to expand trade. But Iran plans to benefit from the status of these agreements and improve its economy.
Expanding trade through the Chabahar port
China: China has invested 400 billion dollars for an uninterrupted and near-endless supply of petrol. This deal between China and Iran has other vital aspects that will affect India and Iran’s cooperation. China plans to access the trade routes through these ports and has plans to help the Islamic Republic create a strong international standing.
India:India invested 500 million dollars in the development of Chabahar port in 2016. This deal reassured India of its lost connectivity with the Central Asian countries due to Pakistan.
This reassurance came after India planned to develop the Railway project through Iran. This project facilitates its connection with Afghanistan’s Hajigak region, famous for its mineral-rich reserves. However, due to a stalled funding from India, Iran completed the railway independently.
In an interview with Behrouz Aghaei, the director-general of Chabahar port, the Tehran Times enquired about the agreements with India and China. The official said, “We have called Chabahar port the “Gate of Nations” and that is an indication of our view about this port’s future; Chabahar is going to be one of the top trade hubs in the region, linking the West Asian nations to CIS countries”.
He primarily stated that Iran welcomes all countries that aim to develop the Persian nation’s economy and provides plans that promote its growth globally.
India’s strategic proposal for development in Central Asia through the Chabahar port
Prime minister Narendra Modi has addressed the economic benefits that Central Asian countries can produce with the association with Chabahar port. The development of the railway route through Iran allows India and several other countries to avoid the rail route through Pakistan. The Islamic republic is currently developing the Chabahar–Zahedan Railway route.
Sources asked Kheirollah Khademi, the Head of Iran’s Construction and Development of Transportation Infrastructures Company, about the progress on the railway route. He said that 57% of the work is complete, and half of the baseline has been laid. He also mentioned that the railway project will be completed on March 20, 2024.
With the development of the Chabahar–Zahedan Railway route in Iran, India looks forward to increasing its trade practices with the Central Asian countries.
Conclusion
Iran has planned to improve its international relations and benefit from the funding from several nations to develop the Chabahar port. The Islamic Republic has previously shown interest in the betterment of Iran through foreign investment.
China’s deal of 400 billion dollars with Iran has helped China acquire a constant fuel source over the past years. China plans to dominate the trading in the Persian country with such deals and promises to assist Iran in improving its economic standing.
After the Chabahar-Zahedan Railway is complete, it will be interesting to see what happens. It will enable India and other Central Asian countries to continue their trading practices, bypassing Pakistan’s Gwadar port entirely.
