Daily Times

India has asked Iran to help in trade expansion with the Central Asian Republics (CARs) and Russia. Indian Ambassador to Tehran Shri Niraj Srivastava, the secretary general of Indian commerce, chief consulate of the Indian foreign ministry and a number of representatives of Indian commercial and transportation companies are visiting Iran’s Golestan province to inspect Iranian railways and potential in the Iran-India railway corridor. During his visit, the Indian ambassador to Tehran said that his country wanted to expand trade with the CARs and Russia through Iran, benefiting from the Iran-India railway corridor. India intends to sign railway agreements with Kazakhstan and Turkmenistan in order to export goods to the CARs and Russia. These agreements will make Chabahar more important to India.

Chabahar would be India’s first foreign port project. Its strategic significance is in the access it provides to Afghanistan, Central Asia and beyond. Originally envisioned by the government led by Atal Bihari Vajpayee in 2003, the project has been delayed over the years. While issues of viability persist, India wants to take up the project. The strategy is aimed at fulfilling the immediate security interests of establishing a sea-land route into Afghanistan’s major cities, namely Herat, Kandahar, Kabul and Mazar-e-Sharif. This access will be facilitated through the Zaranj-Delaram Road, constructed by India in 2009. Additionally, this is a step to counter China’s growing influence in the development of the Pak-China Economic Corridor (PCEC).

India has an extensive plan for making investments in Iran’s southeastern port of Chabahar. Based on a memorandum of understanding (MoU) ratified by Indian Prime Minister Narendra Modi, which will be signed in the near future with Iran, Indian firms will invest in the Chabahar port’s development project. The Jawaharlal Nehru Port Trust (JNPT), based in Mumbai, will take 60 percent equity in the Indian company to be formed for developing the Chabahar port in southeastern Iran. Kandla Port Trust (KPT) will hold the remaining equity. Official reports suggest that the project includes development of container piers through a $ 100 million investment as well as formation of joint ventures between Iranian and Indian companies. With the implementation of the MoU, India will gain maritime and land access to Afghanistan and Central Asia. Recently, India shipped two container consignments to Astara (in Gilan province, Iran) through Iranian soil tentatively, something that proved very economical and fruitful for Indian investors.

Moreover, India has provided Iran a cushion against international sanctions by importing 42 percent more Iranian oil in 2014 as compared to 2013. India has become Iran’s top oil customer after China. Private refiner Essar Oil is the biggest Indian client of Iran, followed by Mangalore Refinery, Petrochemicals Ltd and Indian Oil Corp. The current sanctions allow Iran access to some of its frozen oil revenue overseas and restrict its oil sales at about one million to 1.1 million barrels per day.

India has revived its plan to set up a fertilizer plant in Iran with an investment of about Rs 50,000,000,000 and has asked the Persian Gulf nation to offer long-term gas contracts for manufacturing the soil nutrient. India has nominated Rashtriya Chemicals and Fertilisers (RCF), Gujarat Narmada Valley Fertilisers and Chemicals (GNFC) and Gujarat State Fertilisers Corporation (GSFC) for the proposed 1.3 million tonnes urea joint venture plant at Chabahar. India’s annual demand for urea is about 30 million tonnes while domestic production is around 22 million tonnes. The rest is met through imports.

India has also proposed to make investments and especially establish reverse Special Economic Zones (SEZs) in Iran. Indian Chemicals and Fertilisers Minister Ananth Kumar has expressed interest in the establishment of reverse SEZs near Iran’s petrochemical and fertiliser firms. Indian officials claim that reverse SEZs in such regions can produce goods capable of competing in world markets. India intends to establish such zones in countries that have lots of raw materials, returning their products to Indian markets again.

Gwadar Port will have to face stiff competition from Chabahar. It is still not operating as vigorously as Chabahar. The supporting structures in Gwadar Port are still non-existent. Several projects such as the 950-kilometre railway and 900-kilometre motorway to link with the railways and highways of the country have so far remained only on file. The current Indian endeavours will further make Chabahar competitive. Therefore, it is a dire need for Pakistan to determine vigorous measures in order to complete the 200-kilometre branch road that will link the coastal road to the Indus Highway at Ratodero. There are no internal roads and services, water, gas, power and communication services for the new township and industrial zone. There are no warehouses and cold storages there. Therefore, the development of internal infrastructure is critical, coupled with the PCEC in order to compete with the Chabahar port of Iran.

The author is a freelance columnist