Chabahar has been central to New Delhi’s regional strategy. But with Washington revoking its sanctions waiver, India now faces a tough balancing act — managing ties with both Tehran and Washington while recalibrating its strategic outreach

India’s plans to develop the strategically located Chabahar port on Iran’s south eastern coast are in jeopardy once again. Its development, already severely hobbled by decades of US sanctions on Iran, has received another setback with the US renewing its sanction on a port which India sees as crucial for not just boosting sub-regional connectivity but for its own strategic ambitions.

The strategic importance of Chabahar

For India, the Chabahar port located at the mouth of the Gulf of Oman is of strategic value not only because it provides access to Afghanistan but also to the land-locked Central Asian countries. Moreover, India has set its sights on an even more ambitious connectivity plan by using Chabahar as a gateway to northern Europe via the International North South Corridor (INSTC) — a multi-modal transport network project.

Additionally, the port also gives India another foothold in the Indian Ocean Region (IOR), with the Chinese-built Gwadar port in Pakistan being barely 72 miles away. Locked in a geo-strategic tussle for influence in the region, the deep China-Pakistan axis has serious security implications for India.

The effect of Sanctions

The sanctions kicked in on September 29 after the Trump administration decided it was not going to extend the waiver for the port which New Delhi had been hoping for. After all, an earlier waiver for Chabahar, granted in 2018 during President Trump’s first term, had allowed India to develop the Shahid Beheshti terminal of this port. The waiver had largely been granted for providing humanitarian relief to Afghanistan.

But there was no waiver this time, given the plummeting state of India-US ties with the Trump administration having imposed a 50 per cent tariff on goods imported from India, including an additional 25 per cent as penalty for New Delhi’s refusal to stop purchasing oil from Russia. Neither is the US invested in Afghanistan as it was previously when it had boots on the ground there.

While the sanctions on Iran prevented Chabahar from flourishing, owing to the waiver India was able to carry out some development work and use the port to reach goods to Afghanistan while bypassing Pakistan. India had often used the Chabahar route to send foodgrains and other humanitarian aid to Afghanistan with the latest shipment reaching last month.

Putting its weight behind the development of Chabahar, India had been developing  the Shaheed Beheshti terminal since 2018 through the special purpose vehicle (SPV), Indian Ports Global Limited (IPGL).  Hoping that the sanctions waiver would remain in place, India had even signed a 10-year contract in March last year with Iran to continue operating this terminal while pledging an investment of $120 million.

With the renewed sanctions, India’s plans for the port seem to be unravelling. Officially, India has said that it’s examining the implications.

It will, undoubtedly, have to adhere to the sanctions for it cannot afford to risk secondary sanctions that will come into play. It will also have to manage its ties with Iran with the complexities that will come into play in view of its contractual obligations that it is unlikely to be able to fulfil now.

Tehran has shown understanding of Indian compulsions for stopping Iranian oil imports since 2019, again owing to fear of inviting US sanctions. But with Chabahar too under sanctions now, it’s a double whammy for India.

Besides, New Delhi will also have to contend with the UN Security Council’s vote on September 27 to reimpose widespread economic sanctions on Iran for its nuclear programme.

India’s predicament

For India, the Chabahar setback also comes at a time when it is stepping up its engagement with the Taliban-led Afghan government. While it is yet to recognise the Taliban regime since it seized power in August 2021, it’s been forced to adopt a pragmatic and incremental approach with Kabul.

Beginning with the setting up of a technical mission in 2022, New Delhi’s overtures to the Taliban regime have seen foreign secretary Vikram Misri meet Afghan foreign affairs minister Amir Khan Muttaqi in Dubai in January this year.

This was followed by a telephonic conversation between external affairs minister Dr S Jaishankar and Muttaqi in May.

And now, New Delhi is all set to host Muttaqi in mid-October, making it the first high-level visit to India by a member of the Taliban government. The two sides are sure to discuss the fall-out of the sanctions on Chabahar as well.

Chabahar in Persian means ‘four springs’. But for Iran and India, spring has given way to a cold and dreary winter with no end in sight owing to the US sanctions. Both can only wait to ride out the rough weather and hope that this project, even if delayed, will eventually see the light one day. It calls for strategic patience since neither has any alternative at present.

The writer is a senior journalist who writes on strategic affairs