Ashraf Engineer
June 21, 2025
EPISODE TRANSCRIPT
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
In May, National Security Advisor Ajit Doval spoke with his Iranian counterpart Ali Akbar Ahmadian to discuss, among other things, the much-talked-about Chabahar port project. Doval, it was reported, expressed India’s interest in further expanding cooperation in the development of the port.
India has had a deep interest in developing Chabahar and last year the government-owned India Ports Global Ltd signed a 10-year contract with the Maritime Organisation of Iran to that effect. Under this agreement, India will invest $120 million to develop and operate what is known as the Shahid Beheshti Port in Chabahar and offer a credit window of $250 million for an infrastructure upgrade. This replaces the earlier short-term agreement set in motion in 2016 to keep Indian operations at the Shahid Beheshti terminal going. Now, India does not need to renew the contract every year.
The deal is critical for India because it opens up a more stable and faster route to global markets, allowing it to bypass Pakistan altogether.
Let’s talk about why the Chabahar port is so important to India.
SIGNATURE TUNE
Most critical of all is the unique location of the port at Chabahar, which, incidentally, means ‘four springs’. It’s about 550 nautical miles from Kandla port in Gujarat and it gives India easy access to Afghanistan, Central Asia as well as Europe. The port is strategically positioned beyond the Strait of Hormuz, one of the three so-called choke points in the Indian Ocean, and is unaffected by any West Asian conflicts.
Chabahar is part of the proposed multimodal route known as the International North-South Transport Corridor. The corridor will link the Indian Ocean and Persian Gulf to the Caspian Sea and to northern Europe via Saint Petersburg. It is estimated that shipments through the corridor will take 15 days less than through the Suez Canal.
Chabahar has gained even more significance because the Russia-Ukraine conflict and the turmoil in West Asia have disrupted traditional routes, causing energy and food shortages. India, like other countries, has been impacted by this in the form of higher prices and supply disruptions. India simply has to take urgent steps for long-term supply chain stability.
India aims to grow its economy to $10 trillion by 2030 and $15 trillion by 2034. For that, it needs foreign investment, more manufacturing and of course stable trade routes. Chabahar is crucial in this context. It is a cornerstone of India’s geopolitical and economic strategy, especially in the wake of emerging geostrategic challenges.
As part of this strategy, India wishes to boost economic ties with Central Asian Republics through such connectivity projects. Incidentally, these republics are rich in hydrocarbons and have historically been at the centre of geopolitical transformations. Also, they have historic connections with India, which can be traced back to the ancient Silk Route – a network of roads that linked India and Central Asia for more than 2,000 years. It was not just a trade route but a highway for cultural ties.
The primary roadblock to accessing this region has been Pakistan and India’s tense history with it. Pakistan refuses to allow passage through its territory and among the initiatives that has been stalled is the Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline, which would have helped meet India’s rising energy demand. China, meanwhile, has teamed up with Pakistan for the Belt and Road Initiative, ignoring India’s concerns about the use of territory in Pakistan-occupied Kashmir. This has made New Delhi turn its gaze towards Eurasia. Chabahar will likely be the gateway to it, offering the shortest route for trade.
Chabahar has had a long journey. India first offered to develop the port in 2003, a year after Pakistan and China agreed to build a $248 million deep-sea port at Gwadar on Pakistan’s south-western coast. However, a formal agreement for Chabahar was signed only in 2015. The next year, India pledged an investment of $500 million. It was a tripartite understanding between India, Iran and Afghanistan, which was then not under Talban rule.
There are two port complexes at Chabahar, Shahid Kalantari and Shahid Beheshti. India’s investment is only in Shahid Beheshti and the first phase was inaugurated in 2017, when India sent wheat through it to Afghanistan. In 2018, Iran leased the port’s operational rights to India Ports Global Ltd for 18 months with periodic renewal. As I said earlier, there is now a 10-year agreement in place.
The development of the port is being done in four phases and its eventual capacity will be 82 million tons a year. Incidentally, this is the first time India is taking over full-scale management of an overseas port.
Let’s talk about the China angle now.
From a strategic view, India will be able to monitor China’s activities in the Persian Gulf better through Chabahar. The Adani Group already operates Haifa port in Israel and Chabahar strengthens India’s presence in the region.
The Chabahar pact is also a counter to China’s String of Pearls strategy, a network of military and commercial facilities along the Indian Ocean to encircle India. These include infrastructure investments in Chittagong in Bangladesh, Karachi and Gwadar in Pakistan, Colombo and Hambantota in Sri Lanka, and Kyaukphyu in Myanmar.
So, it’s an intersection of geopolitical realities, economic goals and ancient ties that make Chabahar critical for India.
There are, of course, challenges to overcome. These include the inevitable problems associated with infrastructure creation, bureaucracy and geopolitics. India isn’t home and dry just because the agreement has been signed. It will need to find ways to address these problems, more often than not with a delicate touch. At stake is India’s ambition to become a maritime power and a significant player in Eurasian geopolitics.
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