Chabahar’s opportunities and challenges 

The Chabahar project holds significant economic and strategic importance for India. For India, Chabahar represents a vision that extends beyond its West Asia outlook, positioning it as a key player in an extended neighbourhood. The port serves as a crucial hub for the International North-South Transport Corridor, aimed at linking India with Central Asia and Russia while bypassing Pakistan.

Strategic Link to Central Asia and Russia

The Chabahar port is the fulcrum of the International North-South Transport Corridor. This project aims to create a seamless connection between India, Central Asia, and Russia, effectively bypassing Pakistan. This strategic route not only enhances trade opportunities but also strengthens India's geopolitical presence in the region.

Afghanistan's Support for Chabahar

Chabahar's significance is further highlighted by the support it has received from Afghanistan. The Taliban-led interim government in Kabul has shown its commitment to the port by offering a $35 million investment. This move indicates Afghanistan's desire to find alternatives to Pakistani ports like Karachi and the China-backed Gwadar. In November 2023, Taliban leader Mullah Baradar visited Chabahar, underscoring the port's growing regional importance.

Bilateral Relations and Challenges

For India and Iran, Chabahar symbolizes both cooperation and the complexities of their bilateral relationship. While publicly championed, the port project underscores the limited scope of current India-Iran economic ties. Challenges remain, such as the abandonment of the Farzad-B gas field project, initially discovered by Indian state-owned enterprise ONGC Videsh and the dissolution of the IranoHind shipping company in 2013 due to sanctions.

Legacy of the Chabahar Project

Chabahar is a legacy project with foundations dating back to 2003, a period when India was beginning to develop economic assets abroad. Alongside Chabahar, India invested in projects like Sakhalin-I in Russia. These early endeavours reflect India's strategic ambition to expand its economic footprint internationally.

The geopolitics surrounding India's involvement in Chabahar and Iran's strategic leverages present an intriguing study. The recent contract renewal between India and Iran came shortly after a tense period where Israel and Iran exchanged missile fire, nearly escalating to full-scale conflict. Amidst these tensions, India's Adani Group invested $1.2 billion in Israel's Haifa port, reflecting India's balanced diplomatic approach in West Asia.

India's Diplomatic Balance

India's ability to secure the Chabahar deal despite its investment in Israel's Haifa port showcases the effectiveness of its diplomacy. This balance is not only a testament to Indian diplomacy but also highlights the U.S. recognition that India's access and influence in these regions can be beneficial. India's involvement in initiatives like the I2U2 and the India-Middle East-Europe Economic Corridor further underscores its strategic positioning.

U.S. Sanctions and Strategic Considerations

Recent U.S. remarks on potential sanctions against Chabahar appear short-sighted. India's relationship with Iran and the continued development of Chabahar, which provides critical access to Central Asia and Afghanistan, offer significant strategic advantages. These efforts also serve as alternatives to China-backed projects. Despite China's substantial financial influence and its 2021 strategic deal with Iran, Tehran remains an independent actor, utilizing a diverse geopolitical strategy.

Lessons from Past U.S. Policies

The Biden administration could benefit from reevaluating former U.S. President Barack Obama's approach to India-Iran relations. India suffered when it ceased oil imports from Iran, which had been a top supplier for decades. This decision, made to align with U.S. policies during the nuclear deal negotiations, was undermined by President Donald Trump's unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018. This event reshaped the perception of non-partisanship and the stability of critical U.S. foreign policies.

Looking ahead, two main points are crucial for the future of the Chabahar project. Firstly, the port cannot remain the sole major initiative in the India-Iran bilateral relationship. Relying too heavily on this single project creates volatility and vulnerability in their ties. Diversifying their collaborative efforts across various sectors is essential to stabilize and strengthen their partnership.

U.S. Sanctions and Strategic Flexibility

Secondly, the U.S. should consider a more flexible approach towards sanctions related to Chabahar. Viewing the port as merely a bargaining chip against problematic Iranian policies in West Asia fails to grasp the broader strategic context. India’s outreach through Chabahar is not just about Iran but extends to its larger neighbourhood, potentially aligning with and supporting American strategic interests in the region.

The Importance of Diplomatic Channels

This perspective is particularly relevant as the U.S. maintains channels of communication with Iran, not only through Swiss intermediaries but increasingly via Oman and Qatar as well. Recognizing and accommodating the strategic significance of Chabahar within this broader diplomatic framework could enhance regional stability and serve mutual interests.

India and Iran share a long history of cultural, economic, and political interactions dating back centuries. Their relationship has been shaped by shared interests, regional dynamics, and geopolitical shifts.

Economic Relations

• Trade between India and Iran has traditionally centred on oil, with Iran being one of India's major suppliers of crude oil. Despite sanctions and geopolitical challenges, bilateral trade has included various goods such as chemicals, agricultural products, and textiles.
• The Chabahar Port project stands out as a cornerstone of economic cooperation. It provides India with a strategic foothold in the region, enabling direct access to Afghanistan and Central Asia, bypassing Pakistan. This post is part of the International North-South Transport Corridor (INSTC), which aims to enhance trade connectivity between India, Iran, and Russia.
• India has invested in Iran's energy sector, notably in the development of the Farzad-B gas field. However, this and other projects have faced delays and setbacks due to international sanctions on Iran.

Strategic and Security Cooperation

• The strategic location of Iran and its influence in the Middle East make it an important partner for India. Both countries have a vested interest in regional stability and combating terrorism.
• India's engagement with Iran, particularly through projects like Chabahar, helps counterbalance China's influence in the region, especially given China's significant investments in Pakistan and the Gwadar Port.

Cultural and Social Ties

• Cultural and historical connections between India and Iran are deep-rooted, with Persian influence evident in Indian architecture, language, and arts.
• Various cultural exchanges and initiatives have helped foster closer ties, including academic partnerships, tourism, and collaboration in arts and literature.

Challenges in the Relationship

• U.S. sanctions on Iran have significantly impacted bilateral relations. India's compliance with these sanctions, especially regarding oil imports, has sometimes strained ties.
• The complex geopolitical landscape of the Middle East, including tensions between Iran and other regional powers like Saudi Arabia and Israel, affects India's diplomatic balancing act.
• Internal political changes within Iran, such as the passing of key leaders, can influence the stability and direction of its foreign policy, thereby affecting relations with India.

Recent Developments

• In a significant move, India and Iran recently extended their agreement, allowing India to invest in and operate the Shahid-Behesti terminal at Chabahar Port for another 10 years. This deal underscores the port's importance in the bilateral relationship and regional strategy.
• The formulation of India's National Menstrual Hygiene Policy, which includes provisions for various marginalized populations, including prisoners, highlights India's broader commitment to social justice, which can influence its international relations.
• Despite challenges, India continues to engage with Iran diplomatically, balancing its relationships with other regional players and major powers like the U.S. and China.