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A Long Overdue Diplomatic Port Call
Adnan Abidi, Reuters.com
Diplomacy

A Long Overdue Diplomatic Port Call

India’s window on seizing the strategic overture of the Chabahar seaport may be closing. It must act diplomatically to lock in its gains.

By Ankit Panda

India pays a heavy geographic price for its continuing enmity and rivalry with Pakistan. Its access to crucial strategic partners in western Asia, including Afghanistan, Iran, and the Central Asian states, is complicated. Any Indian commercial engagement with these countries must bypass Pakistan. With the prohibitively harsh terrain of the Himalayas effectively barring the land-based route (not to mention, a geopolitically fraught Kashmir border with both Pakistan and China), New Delhi has to look to the seas for its long-term entry to these increasingly important areas.

These insights aren’t new for India. As a result of these geostrategic realities, in the 1990s it courted Iran to develop a seaport at the strategically located city of Chabahar. Located in southeastern Iranian province of Sistan-Baluchistan, Chabahar sits on the Gulf of Oman, the anteroom between the Strait of Hormuz, through which the Persian Gulf lies, and the Arabian Sea. In 2002, New Delhi and Tehran formally agreed to develop a deep-sea port at Chabahar. For Iran, the deal made good sense as it would ease the burden currently borne by the port at Bandar Abbas. Critically, Chabahar had the important characteristic of being able to bear ships with a displacement greater than 100,000 tons.

Developing this port was never a simple diplomatic task for India. While India and Iran maintain close and cordial relations, owing to historic and cultural links, but also common strategic interests, Iran’s isolation from the West over its nuclear program tied Indian hands. Given India’s own pivot toward the United States in the mid-2000s, following the conclusion of the historic civil nuclear deal, New Delhi grew more acquiescent to Washington’s desire to isolate Iran. Though India continued to purchase Iranian oil – as an energy-starved net importer, New Delhi couldn’t quite substitute its reliance on Iran – it refrained from any major strategic overtures.

With the successful conclusion of the Joint Comprehensive Plan of Action (JCPOA) between Iran and the so-called P5+1, a group comprising the United States, Russia, China, the United Kingdom, France, and Germany, the conversation about Chabahar’s future picked up again in India. Under the deal, Iran was set to reenter the global economy in a huge way and United Nations, United States, and European Union nuclear-related sanctions would be lifted, allowing the Iranian government and private enterprise access to global financial markets. In January 2016, the JCPOA was implemented after the International Atomic Energy Agency (IAEA) certified that Iran had complied with its requirements under the deal in good faith.

Days before the implementation of the JCPOA was to be announced, however, a strange development emerged involving the port at Chabahar. In a bout of sub-state diplomacy between the chief minister of the Pakistani state of Balochistan and the governor of the Iranian province of Sistan-Baluchistan, Chabahar and the Pakistani port city of Gwadar were declared to be “sister port cities.” Balochistan Chief Minister Nawab Sanaullah Zehri and Ali Osat Hashemi, the governor of Sistan-Baluchestan, resolved to additionally develop cross-border trade lines, new shipping lanes, and direct flights between the two cities.

While this development was noticed by few, it helps highlight the fact that India’s pursuit of a seaport at Chabahar is not taking place in a vacuum. Pakistan’s relationship with Iran and their shared Balochistan border means that Islamabad’s actions could affect Tehran’s calculus in cooperating with New Delhi. Pakistan and Iran have had their difficulties along their border: Sunni militant groups based in Pakistan, such as Jaish ul-Adl, have abducted and ambushed Shia security forces in Iran. Additionally, Pakistan’s financial difficulties threw a trans-border pipeline between the two countries into disarray, with Tehran even threatening to levy a fine of $1 million for every day the project was delayed.

In early 2015, however, China’s entry into the picture helped ease matters. Chinese President Xi Jinping unveiled a $46 billion mega-infrastructure initiative in Pakistan known as the China-Pakistan Economic Corridor (CPEC). Under CPEC, China is forging a network of infrastructure to connect its western province of Xinjiang with Gwadar seaport, granting it commercial and possibly dual-use access to warm water in the Arabian Sea.

Additionally, China agreed to help finance the Pakistani stretch of the Iran-Pakistan oil pipeline, which would take natural gas from Iran’s South Pars field, the largest natural gas field in the world, to Pakistan and China, through CPEC. Moreover, Pakistan, to ease Chinese concerns about its poor internal security situation, has brought up a special security force to protect Chinese contractors in Balochistan. For Iran, a positive externality of this development may be greater tranquility along its own southeastern border with Pakistan.

As a result of CPEC and the China’s growing investment in Pakistan, an important strategic ally, Iran sees cooperation with Pakistan as an increasingly credible option. For India, there is a real prospect that its plans for Chabahar will be left in the dust as Iran and Pakistan, abetted by China, blaze ahead with infrastructure linkages.

The answer for New Delhi is to infuse its diplomacy toward Tehran in 2016 with a much-needed jolt of energy. With the JCPOA implemented, Indian anxieties about continuing its strategic rapprochement with Iran should be effaced. For years, India and Iran have been signing flimsy memorandums of understanding (MoU) during high-level bilateral engagements, granting lip service to continued progress at Chabahar.

The latest iteration came in May 2015, when Nitin Gadkari, India’s minister for road, transport, highways, and shipping, and his Iranian counterpart agreed to an MoU that said, “Indian and Iranian commercial entities would now be in a position to commence negotiations towards finalization of a commercial contract under which Indian firms will lease two existing berths at the Port and operationalize them as container and multi-purpose cargo terminals.”

To its credit, New Delhi did manage a breakthrough last fall. A September 2015 agreement saw a simple tit-for-tat with Iran: Tehran would supply natural gas at $2.95 per million BTU (less than half the market rate) in exchange for India setting up and operating a urea plant at Chabahar. This arrangement, however, was more about energy security for India than about New Delhi locking in a longer-term strategic investment at Chabahar. Additionally, India has established some access at the port – Gadkari’s MoU established plans for Indian firms to lease two berths at the port for ten years, with the option to renew.

In bilateral diplomacy, it does take two to tango and Iran, like India, has mostly been preoccupied with more pressing foreign policy priorities than helping India set up shop at Chabahar. With the JCPOA concluded, the Iranian government, led by Hassan Rouhani, has arguably accomplished its top foreign policy goal (indeed, Rouhani had campaign on winning Iranians sanctions relief). But even as the JCPOA unshackles Iran’s economy, tensions with Saudi Arabia are on the rise and Iran’s involvement in the Syrian Civil War demands considerable attention from its limited foreign policy bureaucracy.

At some point in 2016, India needs to take the initiative and make a concentrated push at a high-level to seriously realize its plans for Chabahar. As the world and the region “scramble” to reap the dividends of a post-nuclear sanctions Iran, India cannot be left behind. Its interests at Chabahar are of immense consequence: India’s ability to buttress its interests in Afghanistan and Central Asia will be greatly augmented by locking in a foothold at Chabahar.

Will New Delhi seize the moment?

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The Authors

Ankit Panda is an Associate Editor at The Diplomat.
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