India, Iran, Chabahar Port, and International North-South Transport Corridor

Central Asian countries’ determination to shape their own destiny and lay the ground for a prospering economic bond with the Middle East and neighbouring South Asian nations will depend on removing two bottlenecks that presently hold them back. To begin with, the unplanned and abrupt withdrawal of the American forces from Afghanistan and its transfer to the disorganized Taliban left the Central Asian nations facing a chaotic and potentially dangerous neighbour.

As of now, a dialogue between the two to work out a common ground for establishing mutually beneficial relations has not begun in earnest. Though Amir Khan Muttaqi Mawlawi, Afghanistan’s acting minister of foreign affairs, was present at the July 26 event at Tashkent, his terse demand to acknowledge Taliban’s “achievements” did little to encourage future cooperation between Central Asia and Afghanistan.

Secondly, disunity among the Central Asian countries, exacerbated by various border issues left behind by the erstwhile Soviet Russia, acts as a hindrance to progress.  In recent months, three countries in Central Asia – Kazakhstan, Tajikistan, and Uzbekistan – have undergone major crises. All three cases developed along similar lines: growing tension and protests, an armed response by the security services, a harsh crackdown, and a politically motivated investigation.

What is seemingly missing is the mobilization of a new Central Asian identity. In particular, the weak ties of Kazakhstanis with Tajikistan and Turkmenistan, and Uzbekistanis with Turkmenistan, have suppressed the evolution of unique relations between the countries of the region. In that context, the July 21 Issyk Kul event, where all five presidents of the Central Asian region met, was a major step forward. At Issyk Kul five presidents signed far-ranging agreements to coordinate their efforts by forging a web of institutional links. This established a structure for formulating common policies and organizations capable of implementing them.

What the Central Asian countries need to appreciate is the growing interest of Iran and the South Asian nations – India, in particular – to make them active participants in building up economic strength and trade. Iran’s role in opening trade routes for the region in the south cannot be overstated. Iran has initiated the advancement of the Central and South Asia cooperation by expanding transport and communication infrastructure and international transport corridors that open convenient and safe commercial routes to seaports such as Termez-Mazare-Sharif-Herat-Zahedan-Chabahar and to the Uzbekistan-Turkmenistan-Iran-Pakistan railways.

Because the Central Asian countries are landlocked, Iran needs to build connectivity projects like transportation routes, pipelines, and power grids to link its infrastructure with that of Central Asia; and these connectivity projects, in turn, will further help Iran to have strong control over the energy resources of Central Asia. Iran is a gateway to international markets for the Central Asian countries.

At the heart of the connectivity projects lies the International North South Transport Corridor (INSTC), a great project connecting Iran to the Central Asian countries by railroad. Another great project linking Iran to India and beyond is the development of Chabahar Port, situated in the province of Sistan and Baluchistan in the southeastern part of Iran. It is strategically located at the Strait of Hormuz in the Arabian Sea, providing easy access to Sea of Oman, the Persian Gulf, and the Indian Ocean. The port opens a direct linkage to South Asia, Central Asia, the Middle East, and Afghanistan via rail, road, sea, and air transportation and possesses all the necessary ingredients to become a major center of trade for these regions.

International North South Transport Corridor

Both India and Iran played a major role in pushing forward those two projects. INSTC is India’s import-export route to Russia, Europe, and Central Asia that strengthens its cooperation with Russia and other members of the project. INSTC offers an efficient alternative to the traditional “Suez” maritime route from St. Petersburg in Russia to the Gulf region and India that runs through the Baltic and North Seas and the English Channel, past France and down to and around the Iberian Peninsula, along the Mediterranean and through the Suez Canal, and then to Bandar Abbas in Iran or to Mumbai. (Rebuilding Interconnections: Russia, India, and the International North-South Transport Corridor: Mher D. Sahakyan: Asia Global Online: September 17, 2020)

Presently, INSTC connects India with Nordic Europe, Central Asia, and Russia; and it has the potential to expand up to the Baltic and Arctic regions, which are slowly being drawn into the Northern Sea Passage route as that becomes economically viable.

INSTC originated with an intergovernmental agreement between Russia, Iran, and India in 2002. Subsequently, a total of 13 countries (including Pakistan) have ratified the agreement. India and Russia remain the prime movers behind the undertaking. The main spur is the 7,200-km corridor between Mumbai and St. Petersburg, based on ferry links between the ports along the Russian coast of the Caspian (Astrakhan, Olya, and Makhachkala) and the Iranian ones (Bandar-Anzali, Nowshehr and Bandar-Amirabad). As of now, Indian goods are delivered to the Iranian port of Bandar Abbas on the Persian Gulf and shipped across the Caspian for onward rail or road transport to Russia and Europe.

The Indian Federation of Freight Forwarders Associations estimates that, compared to the Suez route, INSTC brings a 30 percent cost saving and a 40 per cent reduction in transit time. Dry runs conducted between 2014 and 2017 showed possible savings in the order of $2,500 per 15 tons of cargo, while transit time could be slashed to 25-30 days compared to 40-60 days via Suez. Shipments would take an average of 23 days, at costs ranging between $2,300 and $3,500 for a dry container and between $4,600 and $6,800 for a reefer container.

For example, it would only take 19 days (as opposed to 32-37) to cover the route between Mumbai and Moscow, cutting the distance by more than half, from around 16,112 km (8,700 nautical miles) to about 7075 km. Likewise, it would take only 21 days for shipments between India and Finland, down from about 45 days. (The International North-South Transport Corridor - Part 5: Ikram Sehgal and Dr Bettina Robotika: Daily Times: October 29, 2021)

INSTC has four main routes:

-       The Caspian route connects Russian and Iranian ports on the Caspian Sea. Only about 12-16 percent of Russia-Iran container traffic uses these links.

-       The western route connects Russian and Iranian railways through the territory of Azerbaijan, which is emerging as a key hub for INSTC. The link from the Azerbaijan border into Iran, the section from Astara to Rasht (167 km), for which Tehran and Baku have agreed to invest US$ 500 million each, has not been completed. The Rasht-Kazvin section (175 km) inside Iran was opened on March 6, 2019. The western route is operational, but not as a coherent rail link. Russia and Iran are using it for trading wood and wood products, grain, construction materials, fruits, containers, and other goods. Azerbaijan and Turkey, meanwhile, have strengthened their positions in the INSTC network; Turkish ports on the Mediterranean and Black seas are now connected to Azerbaijani ports on the Caspian Sea through the Baku-Tbilisi-Kars rail line, which they launched with Georgia in October 2017.

-       The eastern route links the railway systems of Russia, Iran, Turkmenistan, Kazakhstan, and Uzbekistan, and is fully operational and considered to be the most successful part of INSTC. Iran’s gateways to Central Asia are at Sarakhs (Serakhs in Turkmenistan) and Incheboron (Ak-Yayla in Turkmenistan). The eastern route includes the Kazakhstan-Turkmenistan-Iran railway link, which was inaugurated in December 2014 in Ak-Yayla.

-       The Armenian North-South Road Corridor is an ongoing 556-km project to connect ports on the Persian Gulf with Georgian ports on the Black Sea. In all this, Armenia is somewhat left out because of its political and military problems with Turkey to its immediate south and with Azerbaijan to its north – a legacy of Christian/Muslim religious fault lines. However, Armenia has an ally in Georgia, and a proposed spur from the Baku-Tbilisi-Kars (BTK) route is expected to head down to Yerevan.

Chabahar Port

Chabahar port opens a direct linkage to South Asia, Central Asia, the Middle East, and Afghanistan via rail, road, sea, and air transportation and possesses all the necessary ingredients to become a major center of trade for these regions. Chabahar consists, in fact, of two ports, Shahid-Beheshti and Shahid-Kalantary, that share 10 berths between them that are expected to handle a capacity of 10-12 million tons of cargo per year when fully developed. (Marketing Strategies of Chabahar Port to Access Central Asia and Afghanistan Markets through Rail, Road, Sea, and Air Transportation Facilities: Mohammad Saeid Arbabi, Hossein Vazifehdoust, Karim Hamdi and Vahid Reza Mirabi: International Journal of Economics & Management Sciences: 2018).

Chabahar port is fully operational, but the adjoining area that Iran wants to be built up as an industrial zone has not been developed as of this writing. The port was first used by India in March 2012 to send humanitarian aid in the form of 100,000 metric tons of wheat to Afghanistan. India received 20 containers of dry fruits from Afghanistan as its first shipment in September 2013. In October 2017, India’s first commercial shipment of wheat to Afghanistan was sent through the Chabahar Port. India formally took over operations at Chabahar Port on Dec 24, 2018, when representatives from India, Iran, and Afghanistan met in Tehran to formally hand over control to state-owned India Ports Global Limited.

India has already invested close to US$ 110 million in the project and promises to invest another US$ 500 million. In 2009 India completed a 200 km road linking Chabahar to Zaranj-Delaram in Afghanistan near the border of Iran. With Indian financial assistance, Iran is developing the remaining part of that road, which will connect Malik, Zaranj and Delaram with other important Afghan cities, namely Kabul, Kandahar, and Herat. The importance of this route is that it reduces the distance between India and Central Asia by 1,500 km, thereby promoting regional trade and goods movement. In addition, both countries have discussed a multibillion-dollar Chabahar-Zahedan-Mashhad railway network to connect different areas of the Eurasian region. (Geopolitics of ports: Factoring Iran in India’s counterbalancing strategy for “Sino-Pak Axis”: Sandeep Singh and Bawa Singh: Journal of Eurasian Studies 2019 Vol 10(2))

India is by no means the only beneficiary of the development of Chabahar port; it is of great importance for Iran and the region, as well. Iran is a very important trading partner of India and is keen to see India active in the region. Speaking at a “Chabahar Day” virtual event organized as part of the three-day “Maritime India” summit in March 2021, Iran’s then–Minister of Roads and Urban Development Mohammed Eslami predicted that a fully functioning Chabahar port will change the “geo-economy” of the region. (India pushes for Chabahar in India-Iran-Russia INSTC corridor: The Hindu: Suhasini Haidar: Mar 4, 2021)

Conclusion

It is evident that with a population close to 70 million, the Central Asian countries’ economic prosperity and political stability is of great importance to all neighbouring Asian countries. Situated strategically, these countries can benefit immensely from a system that links them with their neighbours, including China, Pakistan, Iran, India, and the oil-and-gas rich Middle East.

Some observers point out that Central Asia could pursue a gradual transition from a simple bilateral economic relationship to a more detailed relationship with its neighbours. The convoluted borders, creation of the erstwhile Soviet rulers, resulted in conflicts, poor resource sharing and threatening domestic security. In addition, some of these five nations are very thinly populated and are economically weak. The region where they are situated have large and strong nations, such as Russia, China, and the European Union, as neighbours. Smaller Central Asian nations will find negotiating with those behemoths on trade and security matters extremely difficult.

In this context these observers point to an ASEAN-style integration which focuses on an economic give-and-take on a relatively equal footing but at the same time firmly maintains the principles of non-interference, diversity, and mutual respect. These five nations have common characteristics such as their similarity and closeness of cultural, religious, and socio-economic values. Such an integration would also lead to food security, common transport, energy self-sufficiency and a rational distribution of water resources in the region.

No doubt, a Central Asian organization resembling the ASEAN would be able to coordinate its foreign economic policies embracing the neighbours and beyond. An ASEAN-style Central Asia will also prevent the region from becoming a battleground for outside influence and make it a more coordinated stable area. In the years ahead, success of a unified Central Asia will be to build on ASEAN’s precedence by enhancing an effective regional cooperation and economic self-sufficiency and resist undue influence from more powerful outside powers such as Russia, China, and the European Union.

(Concluded)