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Chabahar Port is a seaport in Chabahar city located in southeastern Iran. Chabahar is situated on the Makran Coast of the Sistan and Baluchistan province of Iran and is officially designated as a Free Trade and Industrial Zone by Iran's government. Due to its free trade zone status, the city has increased in significance in international trade. Its location lies in the Gulf of Oman. Historical View An initial pact to build the Chabahar port was first inked during the Atal Bihari Vajpayee's government in 2003, but the deal slipped through during subsequent years. Negotiations only intensified after nuclear deal between P5 + 1 (the UN Security Council's five permanent members -- China, France, Russia, UK and US -- plus Germany) and Iran last year. In May 2016, India signed a series of twelve memorandums of understanding which centered upon the Port of Chabahar. It links ports in the western coast of India to the Chabahar port and covers the road and rail links between Chabahar and the Afghan border.The investment for Chabahar port was supplemented with a $150 million credit line through India's Exim Bank of India. India and CHABAHAR PORT
CRITICAL ANALYSIS Opportunities Trade and proximity to Strait of Hormuz: Bolster trade by gaining access to Afghanistan, Central Asia and other parts of west Asia and even Europe with help of . India is presently dependent on Pakistan for accessing Afghanistan through Afghanistan-Pakistan Trade and Transit Agreement which is not cost effective. Further Afghanistan is rich in resources like Iron, Copper, Gold and rare metals which can be tapped by India once easy access is achieved. Given its proximity to the Strait of Hormuz will boost oil trade. Economic ties The distance between Kandla and the Chabahar port is less than the distance between New Delhi and Mumbai. This agreement enable India to do quick movement of goods first to Iran and then onwards to Afghanistan and Russia through rail & road links and INSTC. Over Rs 1 lakh crore investment will happen in Chabahar free trade zone. It will encourage reciprocal ties in other areas amongst participant countries(especially energy and mineral resources of Iran and Afghanistan). INSTC(International north south transport corridor) This will also give momentum to the International North-South Transport Corridor of which India and Iran are initial signatories along with Russia. Iran is the key gateway in this project. It entails the ship, rail, and road routes for moving freight between India, Russia, Iran, Europe and Central Asia. Compared to current Indian Ocean-European transport route via Red Sea, Suez Canal and Mediterranean, Chabahar-based INSTC is estimated to be 40% shorter and will reduce cost of Indian trade by 30%. Strategic benefits: Access to Central Asia and its resources: India has traditionally attached great importance to its relations with Central Asia. But, unfortunately, the relationship despite close historical & cultural contacts has not progressed to the desired extent. The key constraint India faces is the lack of direct access to Central Asia. The unstable situation in Afghanistan and a highly problematic India-Pakistan relation have deprived India from the benefit of relations with Central Asia. India’s enhanced role in Middle East- India’s traditional old ties with Iran and substantial investment in Chabahar port also provide India with an opportunity to become an important player in Middle East . Indo Afghan Ties- In addition, trade to and from Chabahar will allow India to increase commercial influence in Afghanistan, physically bypassing Pakistan, whose generally hostile stance towards India impedes New Delhi’s ability to develop ties with Kabul. Challenges Ensure healthy dialogue with China and Pakistan to avoid any suspicion . Today, the watch-words of international ties are trust not suspicion; cooperation not dominance; inclusivity not exclusion. This is also the guiding philosophy and driving spirit of the Chabahar Agreement. This will be a corridor of peace and prosperity for our peoples. Motives of economic growth, and empowerment would drive it. It will build our security without making others vulnerable. It would break barriers among our nations and encourage new benchmarks of people-to-people contacts. And, help us to eventually build what we all desire and deserve - a friendly and healthy neighbourhood. Political turmoil of Middle East Political turmoil and undercurrents of economic stress continue to spread in West Asia. Moreover global economy is yet to fully come out of uncertainty and weakness. ME and Extremism Financial Viability for India Conclusion Chabahar port is way to taking strategic ties between India and Iran to new level. It is key to enhancing connectivity, trade, investments, energy partnership, culture and people to people contacts as well as promoting regular consultations on peace and stability, particularly in the region and extended neighbourhood.
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