India-Iran-Afghanistan Current Affairs - 2019

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Afghanistan Launches New Export Route to India through Chabahar Port

Afghanistan has launched a new export route to India through the through the Chabahar Port of Iran. 23 trucks carrying 57 tonnes of dried fruits, textiles, carpets and mineral products were dispatched from western Afghan city of Zaranj to Iran’s Chabahar port. The consignment would be then shipped to Mumbai.

Chabahar port is seen as a testimony of healthy cooperation between India, Iran and Afghanistan this will ensure economic growth. The Chabahar Port of Iran provides easy access to the sea for Afghanistan. India has invested in the development of this route as well as Chabahar port. This route allows both India and Afghanistan to engage in trade bypassing Pakistan.

India-Afghanistan Trade

Afghan exports to India stood at $740 million in 2018 and India is the largest export destination for Afghanistan. The new route is one of the many initiatives undertaken by the governments of India and Afghanistan to enhance trade relations.

To boost the trade relations, both India and Afghanistan had established an air corridor in the year 2017. The opening of new avenues for Afghanistan to trade with India will aid Afghanistan in to reduce its trade deficit.

After the withdrawal from JCPOA and reimposing of sanctions on Iran, US had granted an exception for the development of Chabahar port since the new transportation corridor could contribute significantly for Afghanistan’s economy and meet their needs of non-sanctionable goods such as food and medicines.

First phase of Chabahar port inaugurated in Iran

The first phase of Iran’s Chabahar port (Shahid Beheshti Port) which holds significant strategic and economic importance for India was inaugurated was Iran’s President Hassan Rouhani.

It is Iran’s only oceanic port located on the Gulf of Oman, southeast of Iran near Pakistani border. It has been jointly developed by India, Iran and Afghanistan.

The first phase is expected to increase its cargo handling capacity to 8.5 million tons annually i.e. by over three times from the previous 2.5 million tons. It also includes five new piers, two of them for containers allowing cargo vessels with up to 100,000-ton captaincy to dock.

Background

The move to develop Shahid Beheshti Port was started in 2007. India’s intention to become major partner in project was made clear as long ago as in 2003. The overall development of port is planned in four phases and is expected to bring its total annual cargo capacity to 82 million tonnes. India, Iran and Afghanistan had signed Trilateral Transit and Trade Agreement to grant preferential treatment and tariff reductions at Chabahar to Indian goods headed toward Central Asia and Afghanistan. The port’s inauguration comes after the first consignment of 1.1 lakh tonnes wheat from India to Afghanistan was sent via Chabahar in November 2017.

Significance

The Chabahar port allows India to strategically bypass Pakistan and reach land-locked Afghanistan and Central Asian countries, contributing to bilateral and regional trade and economic development. India views Chabahar port as strategic response to China’s development of Gwadar port in Pakistan (some 78 kilometers away) and its aggressive pursuit of Belt and Road Initiative (BRI).

Chabahar port will be also key for Indian goods to get access Central Asian markets and also provide alternate access to landlocked Afghanistan to regional and global markets. It can accommodate 100,000-tonne ships, which India feels has strategic and economic potential as rival to Gwadar port. The project is important as connects trade corridors that pass through Iran to sea route. It is also politically significant as it connects Iran with its eastern and northern neighbours and at a later stage to European states.

Future Prospects

Chabahar provides India with easier land-sea route to Afghanistan. India committed $500 million for development of Chabahar, with an aim to join increasingly important transport corridor to resource-rich regional countries.

Once the project is completed, Chabahar port will be linked with International North-South Transportation Corridor (INSTC), a multi-modal transportation route which links Indian Ocean and Persian Gulf to Caspian Sea via Iran, and onward to Eurasia and Europe.

India and Iran also have prepared massive investment plans to link port to Iran’s railroad network to facilitate transit of goods to neighbouring landlocked Central Asian countries, as well as open a route to eastern and northern Europe through Russia.