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Chabahar port empowers Afghanistan trade

Chabahar port empowers Afghanistan trade

KABUL: The first phase of the development of Chabahar Port has been completed and is expected to energize Iran’s economy and provide India with a gateway for overland access to Afghanistan and the Central Asian states. On November 11, a consignment of 15,000 tons of wheat arrived in Afghanistan from India via Iran’s Chabahar Port. This is an important milestone for the three countries, as it marks the operationalization of the transit trade agreement they signed in 2017.

Importantly, landlocked Afghanistan now has another outlet to the sea, reducing its dependence on Pakistani ports. This will reduce Islamabad’s influence over Afghanistan, reads an article published in Cacianalyst.orga publication of The Central Asia-Caucasus Institute and the Silk Road Studies Program Joint Center. Below is the full text:

Iran broached the topic of India developing Chabahar into a trade and transshipment hub in 2003. India at first embraced the idea enthusiastically but then its interest waned. It was concerned over the project’s economic viability, especially in the context of international sanctions on Iran over its nuclear program. Under pressure from the US to distance itself from Iran, India dragged its feet on the Chabahar project.Indian interest in Chabahar Port revived from 2012 onwards. US-Iran relations were improving and with nuclear-related sanctions on the Iranian economy being lifted in January 2016, the port’s economic prospects brightened. India’s ambitions to expand trade with and influence in Afghanistan and Central Asia had grown but Pakistan refused India overland access to Afghanistan. Consequently, Indian investment in Chabahar Port’s development as a gateway for overland trade to and through Afghanistan became necessary.

Importantly, China’s presence in the region has grown remarkably over the past decade. Not only has Beijing funded, built and begun to operate Gwadar Port in Pakistan, but is also financing and constructing the China-Pakistan Economic Corridor, a trade corridor linking Gwadar with China’s Xinjiang Province. Worryingly for India, Chinese naval ships have docked at Gwadar. A trilateral agreement signed by India, Iran and Afghanistan provided for transit trade through Chabahar. Chabahar Port has immense strategic value. Its location outside the Strait of Hormuz reduces the Iranian economy’s vulnerability to a blockade of the strait by hostile powers. Situated on the Makran Coast, it gives Iran direct access to the Indian Ocean. Iran’s only deep-sea port, Chabahar’s development will enable Iran to receive high tonnage ships, which was not possible in the past, forcing Iran to route such ships to Dubai.

Most international shipping is conducted via high tonnage cargo vessels and Chabahar can henceforth expect to benefit from the docking of these vessels, especially once Chabahar is linked to the International North-South Transport Corridor. ccess to the sea via Chabahar will ease its dependence on Pakistani ports, which are an uncertain option given the unstable relations between Islamabad and Kabul. This will reduce Afghanistan’s vulnerability to Pakistani pressure. Indeed, Afghan traders have in recent years opted to trade via Iran’s Bandar Abbas Port. In 2008-09, nearly 60% of Afghan imports were transited through Pakistan. In 2016, this figure dropped under 30%. Afghan trade through Iran increased from 15-20% to 37-40% during the same period. Afghan trade via Pakistan can be expected to drop further when Chabahar becomes operational. According to Indian analysts, Pakistan’s main concern in light of these developments is losing its leverage with Kabul, rather than losing Afghanistan’s transit trade to Iran. Kabul is likely to gain greater confidence in dealing with Pakistan on the issue of transit trade and could, for instance, decide to deny Pakistan overland access through Afghan territory to Central Asia. Afghan President Ashraf Ghani has repeatedly articulated this threat in recent years in response to Pakistan’s refusal to allow Afghanistan-India overland trade via Wagah.