News & Views
According to Indian media, Japan is also interested in development of Chabahar. While diplomatic sources have not confirmed the veracity of this news, Japan’s ambassador to Iran Koji Haneda had last year visited Chabahar and spoken about how the project could turn into a global trading hub. Indian eagerness to garner Japanese support on Chabahar port project is part of pro-US circle, which is concerned about China’s emergence as a global power. However, Iranian government and people should remain cautious and vigilant to another Indian guile in shape of Japanese induction in the Chabahar project, as India aims to affect Sino-Iran relations. Fact of the matter is that India and Iran had agreed in 2003 to develop a port at Chabahar on the Gulf of Oman, near Iran’s border with Pakistan but the venture had made little progress because of West’s sanctions on Iran.
India has plans to develop Chabahar Port in two phases. Phase-I involves installation of equipment and operating the two fully constructed berths (a container terminal of 640 metres and a multi-purpose cargo terminal of 600 metres), and Phase-II where India would construct, operate and maintain a container terminal. Indian English daily had carried a report that two Indian government officials familiar with the development and part of negotiations attributed the delays to Iran changing terms and conditions for the port, and India seeking a better deal after initially giving in. They said Iran did not disclose that it had leased out Chabahar Port to an Iranian company, Arya Bandar at the time of signing the memorandum of understanding on May 6, 2015. Meanwhile, the contract between Iran’s Arya Bander and India Ports Global Private Limited, an SPV of the Kandla and Jawaharlal Nehru port trust, has been finalised.
It has to be mentioned that after signing MoU, an Indian team visited Iran in July 2015 and was surprised by an Iranian announcement that the port had been let out in February last year on a long lease to Arya Bandar, a private Iranian company. This was something that was not disclosed at the time of signing of the MoU. Anyhow, there are some other points of contention on Chabahar port, highlighted by Indian media. First one is the issue of customs duty. India would be exporting and installing equipment worth $150 million on Chabahar Port and the custom duty would be around $8-10 million. India argues that since the equipment would remain with the Iranian port once India leaves its operations, the custom duty should be waived. Iran does not agree. Secondly, Iran reportedly changed specifications of the equipment to be supplied to the Chabahar Port and installed in 18 months.
Thirdly, Iran has refused to allow India to export food-grains and other humanitarian aid to Afghanistan via Chabahar from the two terminals that would be allotted to India. Fourthly, India wants Iran’s government to stand guarantee for the Iranian company Arya Bandar if it defaults, but Iran does not agree. On the contrary, Iran wants if the India fails to install all equipment within stipulated 18 months time it would be liable to pay $85,000 per day. These issues have to be sorted out, as Japan is considering partnering with India to develop the strategically located Chabahar Port project in Iran, said a report. Apart from looking at developing the port jointly with India, Japan is also said to be considering building an industrial complex in Chabahar, it said. However, Iran is aware of India’s shenanigans, therefore it would not give India concessions it demands.
Iran must be remembering that India had voted for the EU-3 resolution at the IAEA board of governors at Vienna in 2005. There had been conflicting statements with regard to Iran’s possible ‘response’ to what could be described a betrayal by a friend. In his initial reaction, Iran’s foreign minister made his government’s intent known that Iran would consider reviewing its relations with India. Iran’s ambassador in India had, however, expressed the hope that when IAEA board would take the final decision to refer the matter to the UN Security Council, India would change its stance. But such statement was more of a diplomatic nicety rather than reflective of understanding of ground realities, as India had once again voted against Iran. In India, not only BJP and its allied parties but also pro-Congress parties considered a U-turn in India’s foreign policy.
Incidentally, Prime Minister Narendra Modi is scheduled to visit Iran on May 22. Sources said that the agreement will encompass the trade and transport corridors, which will link Mumbai to Chabahar and Afghanistan, via Zahedan. However, the pact has not specified the routes, which will be decided later. While India and Iran had first spoken about Chabahar in 2002, the first trilateral meeting with Afghanistan was held in 2003. In 2004, Ashok Leyland Project services and two state-owned railway construction firms formed a consortium with ambitious plans for building the missing rail connectivity and developing the port. But the work never took off. India completed the 215-kilometre Zaranj-Delaram highway in 2009, which gave land-locked Afghanistan an outlet to another sea port – thereby reducing its dependence on access to Pakistani ports. After progress on China-Pak Economic Corridor, India has stepped up its efforts to expedite the Chabahar project.
Meanwhile, New Delhi and Kabul were also coordinating efforts with the project figuring large in bilateral documents released after major visits in April and December last year. In between, the India-Iran joint commission meeting in Delhi in December kept up the pressure – with Sushma Swaraj noting that Indian participation in Chabahar will “facilitate the linking of Afghanistan and Central Asia with India”. In January 4 this year, Afghanistan chief executive Abdullah Abdullah made a visit to the port project. At the Raisina Dialogue last month, foreign secretary S. Jaishankar also termed the opening up of Iran as one of the “game changers” which would help India’s outreach towards Central Asia. After the official lifting of the sanctions against Iran in January 2016, bilateral foreign office consultations in Delhi took the matter forward.
—The writer is a senior journalist based in Lahore.