The project to enhance Iran’s Chabahar port for India’s benefit appears to be failing. Consequently, India is exploring alternative port options. The intention is to use a different port to facilitate the swift transportation of Indian goods to European nations. Originally, Chabahar port was developed by India with the goal of enabling this trade route, but due to shifting geopolitical circumstances, trading through Chabahar is no longer viable. This is the reason why during Prime Minister Narendra Modi’s visit to Greece, discussions about the Piraeus port are underway. The Piraeus port is situated on the Mediterranean Sea and could serve as a gateway for India to access Europe.
What led to the complications with Chabahar port for India
India’s intention in developing Iran’s Chabahar port was to establish a means of transporting goods to European countries. Chabahar port is located along the Arabian Sea. The plan involved sending shipments by road through Iran and Armenia’s Jungejur Corridor to reach European destinations. India successfully used this route for transporting numerous shipments to Europe. However, the current situation poses risks to Indian trade. Azerbaijan is planning to take control of the Jungejur Corridor in Armenia, which would sever Armenia’s link with Iran. This development could lead to Indian goods being stranded in Iran.
The emergence of an issue through Pakistan’s ally Azerbaijan
Azerbaijan maintains a friendly relationship with Pakistan and supports Pakistan’s stance on the Kashmir issue under the banner of Islamic solidarity. Another ally of Azerbaijan, Turkey, also stands in support of Pakistan. Turkey, in line with its alignment with Pakistan, would prefer that India not establish trade connections with European countries via Armenia. Responding to Azerbaijan’s actions, India supplied arms to Armenia, including weapons like the Pinaka Multi-Barrel Rocket Launcher, 155mm Howitzer, and Swati Weapon Locating Radar. Additionally, Iran warned Azerbaijan of potential consequences, fearing a disruption of its ground link to European nations. Given these circumstances, any potential conflict between Azerbaijan and Armenia near the Iran-Armenia border would adversely impact Indian business interests.
Failed business strategy involving Afghanistan
India’s strategy also involved using the Chabahar port to expedite the transportation of goods to Afghanistan. Plans included building road and rail links from Chabahar to Afghanistan, eliminating the need for Pakistan’s approval to access the Afghan market. However, the rise of the Taliban regime in Afghanistan dashed India’s hopes. As of now, no country has officially recognized the Taliban’s government, leaving the nature of India’s future relations with Afghanistan uncertain. Under these circumstances, developing Chabahar port primarily for trade with the Taliban regime is deemed unprofitable for India.
Impact of sanctions on Iran on Chabahar’s failure
The United States imposed sanctions on Iran, causing significant challenges for India in developing the Chabahar port. Despite these difficulties, India managed to complete the port’s development by negotiating with the US. India argued that the port’s agreement was finalized before the imposition of US sanctions. Nonetheless, due to the fear of these sanctions, only a few countries around the world engage in business with Iran. Consequently, India faces considerable obstacles in withdrawing the invested capital in the Chabahar port’s development.