India-Iran vs. China-Pakistan in port rivalry

May 26, 2016, 12:27 PM EDT
Chabahar, Baluchistan.
(Source: Beluchistan/flickr)

In a curious twist of events, the U.S. is now indirectly backing the construction of a mega-port in Iran. Earlier this week the leaders of India, Iran, and Afghanistan signed a transit agreement centering on the Iranian port of Chabahar -- a clear riposte to the $46 billion China-Pakistan Economic Corridor (CPEC), with its terminus in the Pakistani port of Gwadar, only 45 miles east.

China’s plans to turn Gwadar into an economic hub could reshape the region’s geopolitics. It would give China a new trade link from its relatively undeveloped West to key Arabian Sea shipping routes at the mouth of the oil-rich Persian Gulf — and might someday be a base for projecting Chinese naval influence, as Blouin News wrote last year.

Meanwhile, Delhi is keen to expand its economic links to Central Asia while completely circumventing archrival Pakistan. (India considers the current routes to those countries unreliable due to Islamabad stalling the Indian goods that pass through Pakistani territory.) So India has had its eye on Chabahar for years, but its investment is only going through now after most U.S. sanctions against Iran were lifted earlier this year. 

"For India to be able to contribute to the economic development of Afghanistan, it needs access that it does not readily have across its land boundary. And India is seeking to deepen its energy relationship with the Central Asian countries and looking for routes that would facilitate that," U.S. assistant secretary of state for South Asia Nisha Desai Biswal told the Senate foreign relations committee on Tuesday.

Indian P.M. Narendra Modi’s visit to Iran this week resulted in the signing of 12 agreements, including $500 million financing for the development of the port of Chabahar. An Indian firm and an Iranian firm will jointly undertake the 10-year port construction, while another Indian company will fund and develop the $1.6 billion Chabahar-Zahedan railway line. India also plans to invest $16 billion in the Chabahar free trade zone.

“There is no comparison in scale and intent between China’s role in Gwadar and India’s in Chabahar, but the Americans are pleased that India is pushing back against the Chinese expansionist mindset," said South Asia expert and author Adam V. Larkey. Likewise, Biswal assured the senators that Washington has been "very clear with the Indians what our security concerns have been and we would continue to engage them on those issues."

In this complex mishmash of geopolitics, Washington's two most reliable friends are India and Afghanistan, and Iran is the only way to circumvent Pakistan, whose relationship with the U.S. is as turbulent as ever. Washington's tacit approval is fine, as long as it keeps a close eye on what's going on and no U.S. funding or security presence is required for the Chabahar scheme to work.