US, India Convergence On Chabahar-Afghanistan ‘Corridor’ Amid Divergence On Iran Oil

IRSHAD SALIM (JUL 2, 2018): US Ambassador to the United Nations Nikki Haley on June 27 told India’s Prime Minister Narendra Modi that Washington would back his country’s plan to develop the Iranian seaport of Chabahar to open up a trade route to Afghanistan and Central Asia.

Former US Secretary Rex Tillerson had indirectly said something similar, but this would mean more coming from Haley, who’s close to Trump, tweeted Washington-based South Asia analyst Michael Kugelman.

“We realize we’re threading a needle when we do that,” said Haley in the Indian capital, describing the balancing act of ensuring Indian use of the Iranian port while the US simultaneously attempts to throttle Iran’s economy to force it to renegotiate the nuclear deal.

The Iran message was delivered most clearly by Haley — the tough US face of Indian descent. New Delhi, despite its efforts to preserve energy independence, may therefore be forced to comply to avoid sanctions from kicking in, the Times of India wrote.

During her meeting with PM Modi on Wednesday, Haley re-emphasized the importance of India cutting oil imports from Iran. In an interview to a TV channel, Haley reiterated that message: “I think for the future of India, future of resources, we would encourage them to rethink their relationship with Iran.”

If that did not sound tough enough, she clarified, “All of us have to rethink who we choose to do business with. I think, as a friend, India should also decide is this a country they want to continue doing business with. So yes, I had that conversation with PM Modi. It was a constructive conversation.”

India had said that it would comply only with sanctions imposed by the United Nations sanctions and not any country-specific sanctions.

The divergence in US-India position on Iran oil — India, after China is the largest importer of Iran oil — may have been watered down with the Chabahar deal as sweetener.

Haley’s characterization of the issue as threading a needle alludes to a quid pro quo approach between the two defense and security partners in the region with Afghanistan as center of gravity.

India sees Chabahar, Iran’s only oceanic port, as vital to its ambition of shipping goods directly across the Indian Ocean for further transiting across Iranian territory by rail and road to landlocked Afghanistan and to the growing Central Asian market and Europe.

The transportation corridor would help cut Afghanistan and India’s dependence on neighboring Pakistan for the passage, some argue. But in the long run, it’s unavoidable.

“We know the port has to happen and the US is going to work with India to do that,” Haley, the daughter of Indian immigrants, said. “We know that they’re [India] being a great partner with us in Afghanistan and really trying to assist the US and trying to do more. The port is vital in trying to do that.”

China, Pakistan’s all-weather friend and ally, has also expressed some interest in using Chabahar for some of its export flows but part of the rationale for India developing the port is to develop a rival to the Pakistani transit port of Gwadar, which China is developing to further its own trade ambitions for Pakistan, Afghanistan and Central Asia. China has also offered Afghanistan and India to join the CPEC corridor whose gateway is Gwadar port in Balochistan.

Related Article: US Calls Off Key Talks With India Amid Tensions Over Trade Tariffs, Iran Oil

Gwadar, on the shore of Sea of Oman, is located just 90 km east from Chabahar and serves as the gateway of the China Pakistan Economic Corridor (CPEC) linking China with the Middle East thru Pakistan and across the warm waters of the Arabian Sea in a shortest possible route.

Iran in February announced it had agreed to lease operational control of Chabahar, located on the Sea of Oman, to India for 18 months terming it strictly business and not strategic. India however sees the opportunity beyond dollars according to several influential Indian Think Tanks.

The race against time in the backdrop of emerging regional dynamics and shifting alliances is underlining the US-India relations vis-a-vis oil trade and Chabahar. The US bend albeit “threading a needle” is therefore obvious.

Indian Union Minister Nitin Gadkari recently said India is trying to make Chabahar Port operational as early as by 2019 — a couple of years before CPEC becomes fully operational. Even though CPEC revenue will be overwhelmingly more than India-Chabahar-Afghanistan “corridor”, the early harvesting of latter could dent geostrategic aspects in the short term, some observers say.

Moreover, Indian shipping ministry officials have been recently quoted as saying that notwithstanding the US plans to impose fresh sanctions on Iran’s nuclear deal, India is all set to begin interim operations in the strategically important Chabahar Port project.

As per the memorandum of understanding signed between India and Iran in May 2016, India would equip and operate two terminals in Chabahar Port.

“We have been able to enter Chabahar Port for interim operations, which will start from June 13,” said shipping secretary, Gopal Krishna, earlier this month.

The shipping ministry has also started the process of inviting fresh bids to select an Indian partner to manage, operate and maintain the port for the next 10 years.

Iran’s only oceanic port, Chabahar, dubbed “international gateway” by Iranian officials, consists of two separate ports named Shahid Kalantari and Shahid Beheshti.

President Hassan Rouhani inaugurated the first phase of Shahid Beheshti Port in the presence of some 70 visiting dignitaries from 17 countries in December.

The opening of the first phase (out of five phases defined for the project) has tripled its capacity to 8.5 million tons (equal to that of all the northern ports of the country) and will allow the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increase India’s connectivity with Afghanistan. The US is on board India’s geostrategic-cum-geoeconomic initiative seen by some observers as an equalizer to the CPEC.

Pakistan is ground zero for several nations’ diverging and converging bilateral and regional interests. There are challenges ahead, but the dividends are anticipated to eventually tilt in Pakistan’s favor in years ahead — once the deck clears.

(The writer is a consultant, analyst and Editor/Publisher of, and BE2C2 Report)

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