India, Iran, Afghanistan And Central Asia Evolving Dynamics

Strategic Importance Of Chabahar:

Chabahar port sits 72 kms from china backed Pakistan’s Gwadar port. India’s efforts to operationalize Chabahar port reflects Indian ambitions as a driver of infrastructure development and improved regional connectivity, particularly with Afghanistan. The project is seen as India’s larger geostrategic ambition to limit china-pakistan cooperation and expand India’s influence beyond South Asia. Chabahar port counters Gwadar port and is viewed as another sign of geostrategic competition between India and China in the region. India, Iran and Afghanistan are working towards integrated development of connectivity infrastructure including ports, road and railway networks to open greater opportunities for regional market access and integration of their economies.

In order to improve trans-regional connectivity, India signed a trilateral transit agreement with Afghanistan and Iran in May 2016 that enables passage for Indian exports to reach Afghanistan  through Iran bypassing pakistan. India flagged off the first shipment of wheat bound for Afghanistan via chabahar port on 29 October’17. India views Chabahar as a means to gain access to Central Asia to overcome its limitation of not having a contiguous border with Afghanistan, hampering the prospects of bilateral trade between India and Central Asia. Chabahar sits at a strategic location for the envisioned “International North South Transport Corridor” (INSTC), signed between India, Iran and Russia in 2000 that would establish transport connectivity between Europe, Central Asia and India. From Chabahar, an overland access to Zaranj in Afghanistan is also being built which is about 900 km from the newly built port. India has completed Zaranj-Delaram road which provides access to Afghanistan’s Garland highway, facilitating transport to Herat, Kandahar, Kabul and Mazar-e-Sharif. There is the Iran-Oman-India Pipeline, a $4.5 billion undersea natural gas corridor expected to transport 31.5 million cubic meters of natural gas per day to India.

Reality meets Expectations:

1. President of Afghanistan Ashraf Ghani met PM Narendra Modi in India on 19 September’18 to review and assess India-Afghanistan strategic partnership. The two leaders expressed determination to strengthen connectivity through Chabahar and air-freight corridor and deepen New Development Partnership in the field of infrastructure, human resources development and other capacity building projects in Afghanistan. President Ghani discussed peace & reconciliation process and the challenges of confronting terrorism and extremism faced by Afghanistan. India supports Afghan led, Afghan owned and Afghan controlled peace and reconciliation process that would enable united, peaceful democratic nation. The two countries organized India-Afghanistan Trade and Investment show in Mumbai on 12-15 September’18 to further boost trade between the two countries. The bilateral trade between the two countries crossed $ 1 billion mark. Since 2002, India has committed $ 2 billion for reconstruction of Afghanistan in the area of socio-economic development.
2. Union Minister Ravi Shankar Prasad led bilateral meeting with Deputy Prime Minister of Kazakhstan Askar Zhumaghaliyev on 20 September’18 and exchanged notes on deepening cooperation in Information Technology between India and Kazakhstan. Kazakhstan showed interest in sharing successful Digital India experiences, particularly digital delivery services.
3. Iranian Minister of Roads and Urban Development Abbas Akhoundi while participating in the Mobility Summit by Niti Aayog on 6 September’18 said, that Iran will hand over the strategic Chabahar port to India Ports Global Private Ltd (IPGPL) within a month for operations for a period of 18 months as per interim pact. Discussions between India’s UCO Bank and Iran’s Bank Pasargad are underway for payment mechanism by which US sanctions can be avoided.
4. India, Iran and Afghanistan held their first Tripartite meeting in Kabul on 11 September’18 during which implementation of the Chabahar port project, economic cooperation, counter-terrorism, counter-narcotics and continuing support to peace and reconciliation process led and owned by Afghanistan were discussed. The three officials also discussed facilitating the process of exploiting Chabahar capacity, removing possible barriers to trade and banking interactions between the three countries in the field of economic cooperation, pursuing tripartite agreements and engaging and cooperating to provide comprehensive security. The Indian delegation was led by Foreign Secretary Vijay Gokhale while the Iranian team was headed by deputy Foreign Minister Abbas Araghchi. Afghan deputy Foreign Minister Hekmat Khalil Karzai chaired the meeting.
5. India has stepped up its engagement with Central Asia to inject fresh impetus to trade, connectivity, people to people contacts, tourism, defence and security cooperation. Minister of External Affairs, Sushma Swaraj, visited three countries Kazakhstan, Kyrgynz Republic and Republic of Uzbekistan in Central Asian region from 2-5 August’18. The visit provided an opportunity to hold in-depth discussions with the political leadership on a wide range of global, regional and bilateral issues to advance India’s engagement with Central Asian Region.

 CHALLENGES

1. India is caught in the middle of a conflict between US & Iran due to US withdrawal from 2015 Iran nuclear deal on 8^th May’18 with the final round of sanction kicking off on 4 November’18. Iran is third largest source of crude oil. India is looking at various options to ensure that the relations with both the countries, especially energy security is not affected. Although India maintains that it is not bound to adhere to new sanctions since it is not endorsed by UN, the issue of payments is most contentious. India’s oil imports from Iran will be affected from the end of August 2018, as Iran offers Indian refiners a 60 day credit period on oil; sales, and the payment for cargoes loaded from the end of August will be due in November’18 when the second tranche of sanctions will commence. If no agreement on an alternate mechanism for funding is reached, India may cut or stop buying oil from Iran. Alice Wells, Principal Deputy Assistant Secretary for the bureau of South and Central Asian affairs had said in Washington that the US would continue discussions on the Iran sanctions with India.
2. Though initial phase of Chabahar will be handed over to India within a month for a period of 18 months, full operalization of the project remains a key concern due to US sanctions and instability in Afghanistan.
3. Though the Iran- India differences over Farzan B gas field have been resolved on the sidelines of International Energy Forum in April’18, the project remains a concern due to US sanction.
4. In May’16, the same year in which India signed the historic trilateral accord with Iran and Afghanistan to cooperate on Chabahar port project, Iran’s ambassador to Pakistan, Mehdi Honerdoost categorically commented: “ The deal is not finished, nor is it limited to just three partner countries, Pakistan and china are welcome to join”. Iran doesn’t want Pakistan to overtly shift to Saudi Arabia-led regional bloc evolving in the Middle East.
5. In a recent development, during Pakistan PM Imran Khan’s two day visit to Saudi Arabia and UAE on 19-20 Septmber’18, Pakistan invited Saudi Arabia to join China’s Belt and Road corridor projects inside Pakistan. Information Minister Fawad Chaudhary said “ Saudi delegation will be coming to Pakistan in the first week of October, including the Saudi Minister for finance and energy, and that should lay down a foundation for a very big partnership. The invitation to Saudi Arabia for partnership in China’s Belt and Road corridor could be seen as Pakistan’s counter to handover of Chabahar port to India by Iran next month and enhancing strategic competition in the region. If Saudi Arabia joins CPEC, it will upset its regional rival Iran.