A tale of two strategic ports, trade and India-China tussle

The port of Chabahar in the southwest corner of Iran, which India is hoping will win it access to Central Asia and Afghanistan, is barely 72 km (44 mile) from Pakistan’s deep-water Gwadar port which China has built to secure its energy supplies.

The dueling ports on the doorstep of Gulf shipping lanes are another strand in the race between the Asian giants to project influence beyond their shores, and seek resources to feed their fast growing economies, that has seen them compete for contracts from Africa to Latin America to even Afghanistan.

“These civilian ports are about China and India trying to advance their interests and diversify their trade and access points,” says Rory Medcalf, a specialist on international security at Australia’s Lowy Institute. “But these could well become elements in a wider competitive dynamic between China and India.”

In trying to develop the two strategic ports, India and China are up against unsettled regional conditions in both Iran and Pakistan and their own limited resources and influence, more so in the case of India than China. For years, Indian officials say they have been urging the Iranians to expedite work on the Chabahar port facilities to handle specialised cargoes, warehouses and proper disembarkation arrangements so it can become a trading hub.

While the port is functional, it has a capacity of only 2.5 million tons per year, against the target of 12 million tons. Iran has declared Chabahar, located in its Sistan-Baluchestan province, a free trade zone.

At their last meeting in July, the Indian side told Iran a thriving port near one of the world’s fastest growing regions was in the interest of Tehran, the Central Asian republics, Afghanistan and of course India. The Iranian side said they were committed to its development. Indian officials now believe that Iranian reluctance to move faster on Chabahar may linked to its anxieties about the troubled Sistan-Baluchestan region where Shi’ite Muslim Iran is trying to put down a Sunni Muslim insurgency.

India, meanwhile, has completed its end of the trilateral arrangement with Iran and Afghanistan. Indian engineers braved militant attacks to build a 200km-long road from Nimroz province in Afghanistan to the Chabahar port, offering landlocked Afghanistan an alternative supply route and reducing its dependence on trucking goods through Pakistan. Indian officials say they’re willing to put in more money into Chabahar to get it going.

A key factor driving India to promote the port in Iran, despite pressure from the United States, is the growing anxiety over the all-weather Gwadar port that the Chinese have built on Pakistan’s Baluchistan coast.

Beijing financed more than 80 per cent of the initial development cost of $248 million for the port on the Arabian Sea, as part of a plan to open up an energy and trade corridor from the Gulf, across Pakistan to western China. So in theory China needn’t ship all its oil supplies from the Gulf through the Indian Ocean and then up to Shanghai. Instead oil tankers would drop off at Gwadar, and from there the supplies would be trucked through Pakistan and into China through the Karakoram Highway that China is trying to expand.

It also gives China access to the Indian Ocean where India has long been the main player, after the United States. More worryingly for New Delhi, the strategic location of Gwadar, 180 km from the mouth of the Straits of Hormuz, offers Pakistan the chance “to take control over the world energy jugular and interdiction of Indian tankers,” according to former Indian navy admiral Sureesh Mehta. “Gwadar has the potential to move much faster than Chabahar because the Chinese are involved. It will depend on how fast they can double the capacity of the Karakoram Highway,” the Indian government official said, pointing to the pace with which China completed a port on Sri Lanka’s southern coast last year which has added to India’s fear of encirclement.

Local media say Pakistani officials are in favour of the Chinese running the port in addition to helping expand it, which will only further feed Indian anxieties. “India will be watchful for any militarisation of Gwadar, though for now there are no signs of that.”