“Connectivity is crucial in our century...Armenia is deeply interested in advancing dialogue and developing cooperation in the International North-South Transport Corridor (INSTC) Project and the Chabahar Port Development Commission.” These words were spoken by the Foreign Minister of Armenia Ararat Mirzoyan last week in New Delhi when he delivered the 52nd Sapru House Lecture at the Indian Council of World Affairs.
Armenia is a landlocked country and connectivity is an urgent issue. Given its location north of Iran and the need for sea access and access to the markets and goods of countries like India and further to Southeast Asia or even West Asia, connecting to the Chabahar port in Iran is imperative. That is why the country had signed on to the port project as early as 2021.
Why Chabahar Is Important For India
Armenia is not alone in understanding the benefits of being part of the Chabahar port project. Afghanistan is another country that has hugely benefited from the port. Possibly, it has been its greatest beneficiary and a raison d'être for India developing the port. The route has enabled India to deliver crucial humanitarian aid to Afghanistan bypassing Pakistan, since 2012. In fact, India invested in the construction of the Zaranj-Delaram highway in Afghanistan, with Zaranj close to the Iranian border, precisely to transport freight to Afghanistan from Chabahar. It has also invested in the Chabahar-Zahedan railway, though this project has moved at a painfully slow pace because of the sanctions the US imposed on Iran for its nuclear programme. Only the Chabahar port, being so important as it is for India's outreach to Afghanistan, as also as a means to counter Pakistan's influence there, was spared from sanctions in 2012 under Section 1244 of the Iran Freedom and Counter-Proliferation Act (IFCA. Since then, successive US administrations have continued with the waiver granted to the project.
Now, US President Donald Trump, in office for the second time, has implemented a policy of "maximum pressure" on Iran, targeting its banking sector and other economic activities. This has also included reimposing sanctions on the Chabahar port, revoking all waivers. An executive order Trump issued called for modifying or rescinding sanctions waivers, “particularly those that provide Iran with any degree of economic or financial relief, including those related to Iran's Chabahar port project”.
India's Commitment
This would make it very difficult for India to continue business through and related to the port. New Delhi has earmarked $500 million for the development of the port, with the work being done by India Ports Global Limited (IPGL). Even with all the uncertainty surrounding Iran and the port and the intensifying conflict between Iran and Israel, India signed a 10-year contract in May last year for the operation of the Chabahar port. This move signalled an enormous resolve, though the US State Department responded by saying, "Broadly, you've heard us say this in a number of instances, that any entity, anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions."
A Crucial Link
Chabahar is important for India for a number of reasons. It connects India to the markets and resources of Afghanistan, Armenia, the Eurasian heartland, including those of the five Central Asian Republics—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—through the shortest routes, all bypassing the Suez, which has over the past years proven to be not as invincible as once believed. Conversely, the port is important to all these countries too.
The port is also crucial to the multimodal trade corridor, the INSTC, which connects India to the Russian Federation and to Europe through its different branches, as well as to Central Asian countries. The corridor shortens transportation time by 40% and costs by 30%. Earlier this month, the first container train from India to Kazakhstan was launched, again travelling via Iran, Turkmenistan and Uzbekistan, shortening the transportation time to 25–30 days. Sanctions on the port would affect all these countries, many of whom are close partners of the US, or with which, like the Central Asian countries, the US seeks steady partnerships.
The China Cloud
Apart from connectivity, the Chabahar port is also strategically important for India. In this age of alternate and greater connectivity and trade and energy corridors, China and Turkey have already implemented their routes—China through its Belt and Road Initiative (BRI), and Turkey through the Trans-Caspian International Transport Route (TITR), aka the ‘Middle Corridor'. The Chabahar Port was also meant to counter the China-developed Gwadar Port in Pakistan, 170 kilometres away. The latter is part of Beijing's China-Pakistan Economic Corridor (CPEC), a flagship project of the BRI.
With Beijing's rising influence in South Asia and the Indian Ocean, the Iranian port takes on more salience. On the other hand, the INSTC and the other trade corridor envisaged to connect India to the Black Sea and Europe through Iran, Armenia, and Georgia, also offer an alternative to the Middle Corridor, as well as a chance for developing autonomy and diversification of trade routes.
A Strategic Asset
In order to remain in the periphery in its neighbouring geographies, the Chabahar Port is a necessity and a strategic asset for India in more ways than one. Therefore, like last year, the latest Union Budget has once again allocated Rs. 100 crore for Chabahar port for 2025-26. India has already invested approximately $120 million in Chabahar's development and extended Iran a $250 million credit line.
India, together with its partners and participating countries of the Chabahar port project, must impress upon the US the significance of the port and the sanctions waivers granted to it by successive American administrations. Trump must understand that the benefits accruing from the port's development to all these countries will, naturally, be beneficial to the US too.
(The author is a journalist and political analyst)
Disclaimer: These are the personal opinions of the author
