Indian Investments in Chabahar Port Will Continue

In order to persuade India to stop buying oil from Iran, the US has reached an agreement allowing India to invest in Iran’s Chabahar port project. At the same time, China has leased Pakistan’s Gwadar port for 99 years. In order to create a communication corridor with Afghanistan, the US is supportive of the Indian development of Chabahar. India is a strategic supporter of Afghanistan and in the meantime, has rivalries with both China and Pakistan.

Chabahar is at the intersection of two global trade corridors. The North-South corridor connecting Russia, The Republic of Azerbaijan, Turkmenistan, Iran, Oman and India; and the East-West corridor known as the Silk Road. Chabahar is also critical for Afghanistan as the traditional route used by trucks is both time consuming and unsafe.

In return for investing in Chabahar, India will manage and use the port for 15 years. Pakistan has however, sold the rights to Gwadar port to China for 99 years. In addition to China is interested in using the port for military-strategic purposes. Iran has announced that the deal with India is not exclusive and China can also invest in Chabahar.

In the end, it seems a number of factors have led to Chabahr being exempt from US sanctions. A number of these factors include: the strategic value of India and Afghanistan for the US, the competition between Chabahar and Gwadar, Chabahr allowing a new path for trade with Kabul, etc.