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Stay invested: On Chabahar and India-Iran Ties
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Context
India has signed a 10-year agreement with Iran to develop and operate the Chabahar port, signaling a significant step in infrastructure and trade partnerships despite ongoing geopolitical tensions and potential U.S. sanctions.
India's Strategic Investment in Chabahar
- Financial Commitment: India will invest USD 120 million and offer a USD 250 million credit facility to develop the Shahid Beheshti terminal and related projects in
- Project Delays: The Chabahar project, conceived in 2003, faced significant delays due to U.S. and UN sanctions on Iran, but progressed after a 2015 MoU and 2016 contract execution following eased sanctions.
- Sanctions Carve-out: Despite the U.S. reimposing sanctions in 2018, India secured ad hoc measures to continue operating the port, emphasizing its importance for India's strategic interests.
Importance of Chabahar Port for India
- Alternative Trade Route: Chabahar provides an alternative route to Afghanistan and Central Asia, bypassing Pakistan, enhancing trade with these regions.
- Connectivity to NSTC: The port is expected to link with the International North-South Transport Corridor, reducing trade time and costs between India and Europe through Iran, Azerbaijan, and Russia.
- Geopolitical Influence: Located near Pakistan's Gwadar port, where China is expanding its influence through the Belt and Road Initiative (BRI), Chabahar helps India bolster its presence in Central Asia.
Challenges and Policy Considerations
- S. Opposition: The U.S. has warned of potential sanctions for entities doing business with Iran, complicating India's engagement with Tehran.
- Changing U.S. Interests: Shifts in U.S. regional policies, particularly post-2018, have influenced India's approach to Chabahar, but India's strategic interests in Central Asia necessitate sustained investment.
- Stability and Consistency: India must avoid previous policy reversals influenced by U.S. positions and maintain consistent support for Chabahar to secure its trade and connectivity goals.
Mains Question:
Discuss the strategic significance of the Chabahar port for India in the context of regional connectivity and geopolitical influence.
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