Why Iran’s Chabahar Port has become new centre of geopolitics

To rein in Russia, US President Donald Trump has imposed a 50 percent tariff on Indian goods. Washington’s demand is that India stop buying oil from Russia. India buys crude from Russia, refines it and then exports it. The United States believes it is by selling oil to India that Russia is able to sustain its war in Ukraine. Now, to corner Iran, the US is moving with a new strategy. It wants to impose fines or sanctions on anyone using Iran’s Chabahar port. For India, Iran’s Chabahar seaport is extremely important, both commercially and strategically. At present, India is jointly running the port with Iran under a 10-year agreement.

To “corner” Iran, the US has decided to withdraw some exemptions previously given to countries using Chabahar. In the changed situation, India and others will have to pay penalties to the US if they use the port. This new policy will take effect from 29 September. According to the US State Department, the step is aimed at dismantling Iran’s “illegal economic infrastructure”. Last June, the US attacked three of Iran’s nuclear sites in an attempt to destroy its uranium enrichment programme.

The US alleges that Iran is secretly making nuclear weapons, aiming to join the list of nuclear powers. Should Iran succeed, Washington fears its closest ally Israel would face the greatest threat. Hence the Pentagon’s strong objections to Iran’s nuclear programme. Since those attacks, US-Iran relations have sunk to a new low. But if Washington clamps down on Chabahar, the country to face the greatest loss will be India. The sudden US announcement is a huge shock for India, which has invested billions in the project. For Delhi, Chabahar is also a vital part of its “connectivity diplomacy”.

India has been working jointly with Iran to build a terminal at this port on the Gulf of Oman. On 13 May 2024, India and Iran signed a ten-year agreement for the operation of Chabahar port. Strategically, India struck the deal to boost trade with Central Asian countries via the port. This was also India’s first attempt at taking responsibility for managing a foreign port. The agreement may be recent, but as early as 2003, the Atal Bihari Vajpayee government had proposed developing Chabahar. Delhi’s aim was to bypass Pakistan and reach Afghanistan and Central Asia by road and rail through the International North-South Transport Corridor (INSTC).

The INSTC is a nearly 7,200 km-long multi-modal transport project. It has made trade routes between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe much easier. But US sanctions over Iran’s nuclear programme slowed the pace of Chabahar’s development. India and Iran signed a memorandum in 2018 for its joint operation, in the presence of then President Hassan Rouhani and Prime Minister Narendra Modi. For India, Chabahar remains of strategic importance, as it allows access to the INSTC by bypassing Pakistan, reaching all the way to Europe. It is equally profitable for Iran and Russia.

So if the US penalises Chabahar users to punish Iran indirectly, India’s plans will suffer a major setback. Other partner companies will also be affected. From late September, the US has declared, sanctions will apply to all entities working at Chabahar. India has a large investment there and fully operates one terminal. For India, the port is vital for import-export with Afghanistan and Central Asia. Located in Iran’s Sistan-Baluchestan province, Chabahar is being built jointly by India and Iran.

Some strategic experts believe the US sanctions are in effect a way to punish India. According to PTI, State Department deputy spokesman Thomas Piggott announced that from 29 September, anyone involved in Chabahar operations or related activities under IFCA will come under US sanctions.

India and Iran have signed an MoU for investment worth $8 billion in the Special Economic Zone. Afghanistan has allocated land in central Afghanistan to seven Indian companies for the $11 billion Hajigak iron and steel mining project. India has pledged $2 billion to develop infrastructure for the Chabahar-Hajigak railway.

The INSTC opens up further trade prospects by linking with Europe and Turkey. Plans also include the “Mazar-i-Sharif-Herat railway” to connect Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan, and to link with Russia’s R-297 Amur highway and Trans-Siberian highway. If sanctions are enforced, India will be hit hardest. But the vacuum may be filled by China, which would use Pakistan’s Gwadar port to expand its hold over the Gulf of Oman. Meanwhile, India and Russia currently enjoy good relations with Afghanistan’s Taliban regime.

Despite US pressure, India will not stop buying oil from Russia. And for Washington, retaking Afghanistan’s Bagram airbase would be strategically costly – the Soviet-built base is now fully in Taliban hands, and possibly backed by Russian support. The US aims to cripple Iran’s Chabahar port as a lesson for both Tehran and Delhi, while also using Pakistani bases to retake Bagram and even strike Iran.

But geopolitics is far too complex for these wishes to materialise. Neither Iran, nor India, nor China will tolerate US dominance in the Gulf of Oman and the Arabian Sea. Russia will also not remain idle. China may exploit Gwadar for strategic gain, but will not tolerate US supremacy. Whenever Washington seeks to expand its influence in the region, Iran, India, Russia and China will resist. If Pakistan leans too heavily on the US, China will cut its development aid. Both China and India, alongside Iran and Russia, are closely watching Pakistan’s military pact with Saudi Arabia.

While the US seeks to escalate conflict through Israel, Iran has countered by empowering allies like Hamas, Hezbollah and the Houthis. Ultimately, the US clampdown on Chabahar may backfire. India will not cede ground on this strategic port – and that means Iran’s position will only strengthen. Military experts even warn that if Washington attacks Chabahar, India, Russia, China or North Korea will not remain silent. In such a scenario, Iran may retaliate by striking Pakistan’s Karachi port.

Reza Ghatak: Novelist and filmmaker