India’s strategic interests in Chabahar

India’s enduring interest in Chabahar has multiple drivers, including both positive (enablers) and negative (disablers).

Among the most prominent positive drivers, has been India’s desire to emerge as a significant contributor to regional connectivity, and infrastructure development – especially in its neighbourhood. The announcement of the India-Middle East-Europe Economic Corridor during the G20 Summit last year shows the enduring value of connectivity as an important tool in New Delhi’s foreign policy.

Right from 2002, India has also been invested in the International North-South Transport Corridor (connecting India, Iran, Azerbaijan, and Russia). The INSTC’s rationale is predominantly economic — expected to reduce trade costs by 30% and distance by 40% (when compared to the route through the Red and Mediterranean seas. In any case, fresh instability in the former (explained here) bolsters the economic rationale, given the spike in insurance premiums after Houthi attacks on shipping in the Gulf of Aden. Moreover, India’s considerable investment in infrastructure development in Afghanistan added to the impetus for better connectivity to both Kabul and other Central Asian capitals. Between 2002 and 2021, India had invested in projects worth three billion dollars in Afghanistan specifically, taking advantage of the displacement of the Taliban (until it returned in 2021).

In 2016, a trilateral arrangement between India, Afghanistan and Iran finally commenced construction on one of Chabahar’s two ports (Shahid Beheshti), with the Indian shipping ministry beginning work in 2017 and the India Ports Global Limited taking control of operations at the Shahid Beheshti port in Chabahar. Collectively, these enable India’s grand strategic vision – to emerge as a critical player in regional development and connectivity.

On the other hand, parallel to India’s own involvement in Chabahar, Pakistan itself had been investing in developing the deep sea port of Gwadar (just 70 kms east of Chabahar), in the insurgency-ridden but resource-rich province of Balochistan. Particularly under former president Pervez Musharraf in the 2000s, Pakistan turned to China for aid, drawing in significant Chinese resources for Gwadar’s development as a trade and transit hub, eventually making Gwadar an integral part of the China-Pakistan Economic Corridor, itself a part of Beijing’s Belt and Road Initiative.

Even as Pakistani officials played down the potential of Chabahar under-cutting Gwadar’s potential as a regional trade hub, the former does allow India to get around Pakistan, especially for trade with Afghanistan. The shortest route for Indian trucks to Afghanistan remains through Pakistan, with Islamabad agreeing in late 2021 that it would allow Indian humanitarian aid to pass, after delaying it for several weeks. However, the route remained fraught with trouble due to new technical demands from Pakistan (such as using Pakistani trucks), bureaucratic hurdles, and new border tensions between Pakistan and Taliban-ruled Afghanistan (since August 2021) which have significantly increased security risks. Hence, while India began testing wheat shipments to Afghanistan through Chabahar in 2017, the port has proven to be particularly effective for India in delivering humanitarian aid to Afghanistan across the last two years. For instance, it sent 20,000 metric tonnes of wheat in March 2023, and 40,000 litres of pesticide in January 2024, all through Chabahar. Effectively then, it disables Pakistan’s leverage on India-Afghanistan ties – evident in the difficulties Islamabad created when India attempted to send aid trucks through Pakistan.

The long winter

Even though India indicated its interest in Chabahar in 2002, it is that very year that the United States declared Iran as part of the “axis of evil” – severely damaging the positive environment required for multi-state partnerships to develop Chabahar and causing states to prioritise sanctions avoidance. This directly contributed to the snail-paced progress of India’s development of Shahid Beheshti. While India exploited the thaw in US-Iran ties due to the Obama administration’s success with the Joint Comprehensive Plan of Action (or the Iran nuclear deal) and secured the 2016 trilateral, the Trump administration’s re-sanctioning of Iran brought back the older threat of secondary US sanctions. Hence, even as India secured a waiver from US sanctions (for Chabahar’s development), multinational firms remained wary of investing in the port.

Moreover, Iran itself has remained open to Chinese and Pakistani investment in Chabahar along with India. For instance, India’s withdrawal from the Chabahar-Zahedan railway project in 2020 was indirectly attributed to Iran’s exploration of a 25-year agreement with China (comprising USD 400 billion for infrastructural development). In any case, since India’s other regional connectivity projects in its neighbourhood have suffered from prolonged delays, the twenty-year-long tussle for India’s development of Chabahar only increased perceptions of the project being a risky gambit.

Waiting for spring

Despite this long winter, both the positive and negative strategic drivers have evidently propelled India to push through. Hence, while the Pakistan-Afghanistan relationship has severely deteriorated, India has shown an unprecedented (but gradual and incremental) willingness to engage with the Taliban in Kabul across 2022 and 2023 – the key to which has been leveraging Chabahar for greater connectivity.

By January 2024, India and Iran succeeded in inking a 10-year-long agreement for India’s operations at Chabahar, reducing the adverse effects expected from Iran’s deal with China for other infrastructure projects. India even leveraged this to further push for Chabahar’s integration with the INSTC, even as China’s investments in and around Gwadar feel the adverse effects of a resurgent insurgent movement aimed as much against Chinese presence in Balochistan, as against the Pakistani government.

Hence, while Iranian President Ebrahim Raisi’s first visit to Pakistan in April 2024 is being touted as a concern for India, it is unlikely to ruffle New Delhi’s feathers – the Iran-Pakistan relationship came under fresh strain due to their own exchange of airstrikes in January, and Tehran’s outreach to Islamabad after a new government took charge in the latter, was only natural. Moreover, Raisi avoiding expressing support for Pakistan’s position in its dispute over Kashmir with India shows Tehran’s desire to not test New Delhi.

However, while India’s engagement with Iran over Chabahar remains steady, both new and old geopolitical storms might continue to make New Delhi wait.

On one hand, new US sanctions on Iran (due to its drone strikes on Israel), increase the older risk of companies avoiding involvement in Chabahar; this risk is likely to increase if a second Trump administration becomes a reality in Washington.

On the other hand, Israel’s continuing war in Gaza and the extensive disruption to maritime trade in the Red Sea caused by Iran-backed armed groups, increase regional instability. While this instability counter-intuitively proves the need for alternative trade corridors like the INSTC, its general effect is negative – with maritime trade in the northern Indian Ocean at large, being at risk. In Chabahar then, India is currently working more to dampen the effects of the long winter, than to reap the benefits of spring.

Bashir Ali Abbas is a research associate at the Council for Strategic and Defense Research, New Delhi, and a South Asia Visiting Fellow at the Stimson Center, Washington DC. The views expressed are personal.