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India’s Afghan Power Play, Via Iran

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Pacific Money

India’s Afghan Power Play, Via Iran

With Pakistan and China in mind, India is looking to invest $100 million to expand Iran’s Chabahar port.

India and Iran are actively exploring options for expanding the amount of goods India is sending to Afghanistan via Iran, according to Indian media reports.

Last week Indian Express reported that the Indian and Iranian governments have begun drawing up a transit agreement to allow India to ship more goods to Afghanistan by going through Iranian territory. According to the report, as part of the agreement the Indian government has begun pushing a cabinet note on investing over US$100 million in the expansion of Chabahar port in southeastern Iran. India helped finance the construction of the port and first used it to ship 100,000 metric tons of wheat to Afghanistan in early 2012.

Delhi has long viewed Tehran as an integral part of its Afghan strategy given the Persian Gulf state’s proximity to Afghanistan, which allows India to use it to bypass Pakistan. Indeed, Afghanistan, Iran, and India have long discussed different options for utilizing the Chabahar port to enhance trilateral cooperation, including setting up a joint working group on the matter following a meeting the three countries held on the sidelines of the Non-Aligned Movement summit in Tehran last summer.

Besides allowing India to bypass Pakistan, Chabahar is particularly well-suited for India to aid Afghanistan because the Iranian government has built a series of roads connecting Chabahar port to the Iran-Afghanistan border. From there goods can be transported by road to the southwestern Afghan city of Zaranj thanks to the 215 km-long Delaram-Zaranj highway (Route 606) that India built for Afghanistan at a cost of around US$110 million.

Delhi has also expressed interest in building a 900-km railway linking Chabahar to Hajigak, Bamiyan province in central Afghanistan, where a consortium of Indian state-run and private companies have been awarded rights to mine Afghanistan’s largest iron deposit.

In this sense the timing of the deal can be partly attributed to India’s need to protect its Afghan investments especially following the withdrawal of NATO forces in Afghanistan. During the 1990’s both India and Iran backed the Northern Alliance forces that battled the Taliban for control over the country. It is likely Delhi and Tehran are prepared to revive this strategy of supporting Afghanistan’s non-Pashtun population should the Taliban begin to make gains in Afghanistan after most foreign troops leave the country at the end of next year.

That being said, a number of dynamics appear to be driving Indian policy here.

None of these are more important from Delhi’s perspective than China’s recent decision to assume responsibility for operating Gwadar Port in southwestern Pakistan. The deep-water port was built with US$200 million of funds from China and is viewed by many in India and elsewhere as part of Beijing’s so-called “string of pearls” strategy of erecting strategically located ports that could potentially service PLA Navy vessels in the future.

Gwadar port’s strategic location suggests it would play a crucial role in allowing PLAN to establish a presence in the Persian Gulf in order to better protect China’s oil investments in the Middle East, should Beijing decide this is necessary in the future.

Chabahar port is just 44 miles (70 km) away from Gwadar and is strategically situated between Pakistan and the Persian Gulf, making it especially valuable for checking any Chinese attempt to use Gwadar to deepen naval deployments in Middle Eastern waters. Iran would almost certainly share this goal with India given Tehran’s efforts dating back to the Shah to limit foreign navies’ operating in the Persian Gulf in order to enhance its own position.

Also guiding Indian policy towards Iran is the recent progress Iran and Pakistan have made towards constructing a pipeline to transport Iranian natural gas to energy-starved Pakistan. Initially the Iran-Pakistan pipeline was supposed to extend to India but Delhi pulled out of the project over concerns about Western sanctions on Iran over the latter’s nuclear program.

There are many obstacles still plaguing the Iran-Pakistan pipeline and ultimately the project may never be completed. That being said, Pakistan’s willingness to flout Washington’s threats of sanctions in pursuing the project—though driven by Islamabad’s desperate energy situation—has heightened Pakistan’s strategic value for Iran, especially compared to India which has proven much less willing to back the U.S. on the issue of sanctions, its leaders’ rhetoric notwithstanding.

Although the U.S. has certainly sanctioned individual Iranian port operating companies, the U.S. sanctions do not cover investments in Iran’s port infrastructure, at least according to Indian Express. If true, India likely views financing the expansion of Chabahar as a means of deepening strategic cooperation with Iran without attracting the ire of the U.S. Treasury Department.

Zachary Keck serves as assistant editor for The Diplomat.