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Mint
24-06-2025
- Business
- Mint
India on track to make Chabahar preferred port of call in Iran for trade with Central Asian nations, says shipping secy
India is pushing ahead to make Chabahar, located in the strategic southeastern corner of Iran, its main port of call in a bid to pivot away from Bandar Abbas near the Strait of Hormuz chokepoint, said ports, shipping and waterways secretary T.K. Ramachandran. The recent tension in West Asia, marked by the Iran-Israel conflict and US bombings has prompted India to fast-track its plan to develop rail and road infrastructure at Chabahar port. This would turn it into the preferred port of call for the movement of all Indian goods destined for Central Asian countries and Afghanistan and reduce dependence on Bandar Abbas. Chabahar not only provides India with an alternative access point to Central Asia and Afghanistan, it also bypasses both Pakistan and the China-Pakistan Economic Corridor (CPEC). This offers India greater regional connectivity and trade options, reducing its reliance on Pakistan and potentially strengthening its geopolitical influence in the region. 'Work on improving and expanding facilities at Chabahar Port is ongoing and the port has also been consistently getting increased container and cargo at its terminal. Very soon, the port will get connected to main rail and road networks in Iran allowing it to become the prime port for movement of shipments from India to Iran, Afghanistan and other Central Asian Republics," Ramachandran told Mint. He said the port did not face any threat during Israel-Iran conflict and functioned normally with all construction work, including expansion and connectivity projects, continuing uninterrupted. 'The objective for Chabahar Port is to make it the main port of call for Indian shipments bound for Central Asian republics and we are moving in that direction," Ramachandran said. Bandar Abbas key port now At present, Indian shipments to Iran and Central Asian countries mainly use Bandar Abbas, Iran's largest port. But rising tensions in West Asia and the Persian Gulf region pose threat to this port that is close to Strait of Hormuz, a famous chokepoint. In recent days the threat of Iran closing off the Strait of Hormuz has loomed large. A closure would have made shipments in and out of Persian Gulf difficult and spiked oil prices. Chabahar, is away from the Strait of Hormuz and has a vast opening towards the Arabian Sea. This makes the port not only strategically important for India but also one that supports uninterrupted shipments even during times of tension in West Asia. India's focus on projects in Iran also assumes importance in wake of worsening India-Pakistan ties following the April terrorist attack on tourists in Pahalgam. 'Indian and Iranian authorities are working to provide rail connectivity to the port and the infrastructure should be available soon," Ramachandran said. As per the plan, India along with Iran would fast-track the development of a new rail route between the Chabahar port and Zahedan city. This could turn the port into the gateway to the International North–South Transport Corridor (INSTC), providing the main trade channel for Central Asian and Eurasian countries located on the eastern side of the Caspian sea and Afghanistan. The rail line is expected to be ready by 2026-end or early 2027. Also read | India to fast-track Chabahar port works The rush for rail connectivity is because port operations have now become viable with a pick-up in movement of both container and dry bulk cargo as Chabahar becomes the main trading channel for India. Chabahar, as per the ministry of ports, shipping and waterways (MoPSW), handled a substantial volume of cargo in FY25, reaching up to 80,000 TEUs and 3 million tonnes of bulk cargo. In comparison, it had managed just over 64,000 TEUs in FY24 and only around 9,000 TEUs the year before that. The port handled 2.12mt of bulk cargo in FY24 and 2.08 mt in FY23. A TEU is a measure of volume in units of twenty-foot long containers. The port has a current capacity of 100,000 TEUs which will rise to 500,000 TEUs over the next few years The bulk cargo capacity of 8mt will be more than doubled soon. Work on the 700-km long Chabahar-Zahedan railway line has moved very slowly even though an MoU was signed between Indian Railways' IRCON and Iranian Railways' Construction and Development of Transportation Infrastructures Company (CDTIC) back in 2016. Now, it is getting implemented as Chabahar is emerging as next big commercial port in Iran after Bandar Abbas. Taking shape Things began to take shape when India and Iran in May last year signed a long-term contract for the development of Chabahar port after years of protracted negotiations. IPGL (India Ports Global Ltd) has taken over operations of Shahid Beheshti terminals at Chabahar. The facility. which comprises a container terminal and a multi-cargo berth, is operational and providing services for bulk and container cargo. A number of schemes are being offered by IPGL to promote the use of Chabahar port including, discounts, longer free storage times for cargo etc. The port has a deep draft that can handle larger vessels. Besides, ships calling at Chabahar avoid traffic congestion and waiting time at anchorage, being outside the Strait of Hormuz. The road to Zahedan (Iran) and onwards to Zaranj (Afghanistan) also provides seamless connectivity for movement of humanitarian aid from India to Afghanistan through Chabahar port. The Port handles a diverse range of products such as automobile spare parts, agricultural products, iron ore, clinkers etc. and efforts are on to increase the product basket handled at the port. Also read | After Chabahar, India looks to build port facilities in Bangladesh and Sri Lanka The port's integration with a special free zone is another positive, while Indian incentives, such as concessions on vessel and cargo charges, bolster trade flows through Chabahar. In 2003, India agreed to help Iran develop the port as well as accompanying infrastructure links during then President Mohammad Khatami's visit to India. However, matters progressed slowly thereafter amid western sanctions. In 2013, India committed to providing $100 million for the development of Chabahar. An MoU) was signed in May 2015. Thereafter things appeared to be moving forward during the visit of Prime Minister Narendra Modi to Iran in 2016. But Indian plans to help develop an international trade corridor, which included Chabahar as a central transit point, stalled again due to the reimposition of western sanctions against Iran for its nuclear programme. Enhancing regional connectivity This present agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan. The India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of IPGL, facilitated the first consignment of exports from Afghanistan to India in 2019. The operations continued through short-term contracts while negotiations on a long-term agreement picked pace with the visit of MoPSW minister Sarbananda Sonowal to Chabahar in August, 2022. Also read | India, Iran may restart rail connectivity project between Chabahar and Zahedan Negotiations on the long-term contract were held up over disagreements on arbitration clauses. Mint had earlier reported that the two sides have reached an accommodation which will allow arbitration under rules framed by the UN Commission on International Trade Law. India is looking to strengthen its presence in key infrastructure along the route passing through the Persian Gulf region. The Adani Group is already operating the Haifa port in Israel and more port deals are expected in the region by Indian entities that will strengthen the country's presence on this strategic route that is the main gateway for shipments moving from the India to Europe.
Indian Express
11-06-2025
- Business
- Indian Express
How India's development-centric approach to Central Asia marks a shift
Amid shifting dynamics in and around the Central Asian region – marked by Iran's entry into the Shanghai Cooperation Organization (SCO) and BRICS, and the Taliban's growing engagement with China, Iran, and now India – new opportunities are emerging for India to deepen its engagement with Central Asian Republics (CARs), especially in the development sector. Notably, the development sector emerged as the primary focus of discussions during the fourth meeting of the India-Central Asia Dialogue. This signals a departure from the earlier narrative between India and the region, which was largely dominated by Central Asian geopolitics, the new Great Game, oil and gas deals, and pipeline routes. The Dialogue, chaired by India's External Affairs Minister S Jaishankar and attended by the Foreign Ministers of Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, proved to be a valuable opportunity to showcase India's developmental strengths and the potential for linking them to Central Asia. Let's examine India's development-centric approach to the region, which has become noticeable in recent years, and explore how the India–Central Asia Dialogue evolved as a strategic tool for New Delhi. Central Asia has long been part of the Indian imagination due to historical civilisational linkages and cultural connections. After the Soviet Union break-up, new geopolitical realities and economic opportunities influenced India's approach to the region. The emergence of new independent states opened opportunities for energy imports as well as trade and transit. At the same time, concerns over rising religious fundamentalism, instability in Afghanistan and China's growing profile in the region further heightened India's strategic interest. After signing strategic partnerships with Kazakhstan (2009), Uzbekistan (2011) and Tajikistan (2012), India announced its 12-point 'Connect Central Asia' policy in 2012. The aim was to look at the region collectively in a more proactive manner and strengthen India's political, security, economic and cultural connections. In July 2015, Prime Minister Narendra Modi visited all five Central Asian states and signed 22 agreements. India's engagement deepened further when it became a full member of the SCO in 2017 and initiated the foreign minister-level 'India–Central Asia Dialogue' in 2019. The same year, India elevated relations with Kyrgyzstan to a strategic partnership. Despite close political and strategic ties with all Central Asian countries, India's commercial engagement with the region has remained limited. An unstable Afghanistan and strained India–Pakistan relations have obstructed direct connectivity. To address these challenges, New Delhi sought alternative routes by working with Russia and Iran through the International North–South Transport Corridor (INSTC) and its tributaries. Investments in Afghan infrastructure was also part of this broader strategy. The construction of the 218 km Zaranj–Delaram road in Afghanistan and the development of Chabahar Port in Iran were key initiatives aimed at facilitating India's access to Central Asia via Iran and Afghanistan's ring road. India's connectivity plans coincided with the US New Silk Road Initiative to connect Central Asia with South Asia via Afghanistan. The Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline project also remained a key focus for many years. However, the US withdrawal from Afghanistan and the return of the Taliban disrupted all these earlier narratives. In the meantime, China has expanded its presence in the region through trade and Belt and Road Initiative (BRI) projects. Kazakhstan and Kyrgyzstan are also part of the Russia-led Eurasian Economic Union. In this evolving regional context, development cooperation and capacity building have become central to India's engagement with Central Asia. To support this shift, India has established the India–Central Asia Development Group and the India–Central Asia Business Council. Additionally, a US$1 billion line of credit was launched to fund development projects in infrastructure, IT, energy, and agriculture. At the recent India-Central Asia Business Council, EAM Jaishankar outlined five key areas to strengthen linkages between the growing Indian economy and Central Asia. These included digital economy and innovation, financial services, healthcare and pharmaceuticals, enhancing connectivity, and streamlining transit procedures. The outcome of the Foreign Ministers' Dialogue also included the establishment of the India–Central Asia Digital Partnership Forum and India's offer of technical support for designing Universal Health Coverage (UHC) models in Central Asia. The Central Asian partners further agreed to work closely with India's Global South Centre of Excellence – DAKSHIN (Development and Knowledge Sharing Initiative), to exchange and learn from each other's development experiences. India has also offered to share its Digital Public Infrastructure (DPI) platforms, such as Aadhaar and DigiLocker, with Central Asian Countries. However, due to challenges related to direct connectivity and customs procedures, India's trade with Central Asia has remained limited to around US$2 billion in recent years. To strengthen these ties, it has been suggested to develop long-term cooperation in uranium, crude oil, gas, mining, coal, and fertilizers, along with facilitating payments in local currencies. Additionally, tourism and education have been identified as high-potential sectors for future growth. India imports significant quantities of uranium from Kazakhstan and Uzbekistan. During the meeting, Central Asian partners expressed interest in jointly exploring rare earth minerals. How have changing power dynamics in and around Central Asia – marked by Iran's entry into SCO and BRICS, and the Taliban's growing engagement with China, Iran, and now India – reshaped India's calculus in the region? To what extent can India's development-centric approach counterbalance China's economic influence in Central Asia, especially under the BRI framework? How has the India–Central Asia Dialogue evolved as a strategic tool for New Delhi's regional outreach in a post-US Afghanistan? Following the break-up of the Soviet Union, what were the factors that sharpened India's strategic interest in the Central Asia region? India announced its 12-point 'Connect Central Asia' policy in 2012. What was the aim of this initiative? Evaluate. (Gulshan Sachdeva is Chief Coordinator, DAKSHIN – Global South Centre of Excellence, RIS at New Delhi and Professor at the School of International Studies, Jawaharlal Nehru University) Share your thoughts and ideas on UPSC Special articles with Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Business Recorder
25-04-2025
- Business
- Business Recorder
Pak-Kyrgyz rail link discussed
ISLAMABAD: The Ambassador of Kyrgyzstan to Pakistan, Avazbek Atakhanov, Friday, called on the Federal Minister for Railways, Hanif Abbasi, to discuss matters related to Pakistan-Kyrgyzstan rail link and invited Railways minister to attend the meeting of the Pakistan-Kyrgyzstan Intergover nmental commission next month. During the meeting both the sides, while expressing determination to further strengthen railway cooperation, agreed to promote economic, cultural and trade relations. Abbasi emphasised on improving trade links and travel facilities between the two countries. The ambassador Kyrgyzstan of appreciated the government's economic policies and said that Pakistan's current situation has improved and the economy has strengthened. Pakistan and Kyrgyzstan discuss technical exchanges and joint projects for development in the railway sector. 'Railway cooperation between Pakistan and Kyrgyzstan will improve economic relations and strengthen people-to-people contacts,' Abbasi said. Abbasi stressed the need to strengthen relations with Kyrgyzstan and other Central Asian Republics (CARs), saying railways has great potential to not only serve the travellers but also goods transport. He assured full support for increasing cooperation in the railway sector with Kyrgyzstan. The Ambassador of Kyrgyzstan invited Railways Minister Abbasi to attend the meeting of the Pakistan-Kyrgyzstan Inte rgovernmental Com mission. On February 26, 2025, Uzbekistan and Pakistan during Prime Minister Shehbaz Sharif's visit to Uzbekistan had agreed to establish a tripartite committee with Afghanistan to address issues that are hindering the implementation of a proposed railway project connecting the three countries. According to officials, Russia is also keen to participate in the Trans-Afghanistan rail link and Russia has signed an agreement with Uzbekistan. According to Russia's Ministry of Transport, two possible routes are under consideration: Route (i) Mazar-e-Sharif – Herat – Dilaram– Kandahar – Chaman (Pakistan) and (ii) Route 2: Termez (Uzbekistan) – Naibabad – Logar – Harlachi (Pakistan). Copyright Business Recorder, 2025
Express Tribune
16-02-2025
- Business
- Express Tribune
Trade, economic partnership agreements fuel growth
Listen to article BRUSSELS: Pakistan, by developing its own internal integration through free trade agreements and economic partnership agreements with Central Asian Republics (CARs) including Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan and most importantly with China, can provide refuge at times when other markets suffer. The free flow of products and people across country borders increases overall economic efficiency, widens consumer choices, decreases production costs and enables faster economic growth. It contributes to improved living standards and increased investment opportunities. As total trade flow increases, liquidity increases. With an increase in liquidity comes a decrease in volatility, which is eventually followed by broader, deeper markets with an improving risk profile. So, while optimal policy prescriptions within all four grand kingdoms of macroeconomics (fiscal policy, monetary policy, income policy and trade policy) are desirable, effective trade policy can be especially important for fueling economic growth and equity market outperformance. Free trade among Central Asian countries and Pakistan will make the region more competitive and more productive. By reducing arbitrary government constraints on trade flows, businesses enjoy increased market access and can exploit economies of scale and other local advantages, allowing them to purchase resources from the cheapest suppliers and locate manufacturing operations where they are most efficient. Expansion of free trade in Southeast Asia among member countries of the Association of Southeast Asian Nations (Asean) is an example to follow. Total trade (exports and imports) in the Asean bloc has surged since 2002-03, when the Asean Free Trade Area drastically reduced tariffs within the region. Today, total trade stands at more than $750 billion and foreign direct investment (FDI) above $200 billion. Furthermore, trade within the Asean bloc represents 60% of their total trade and their annual growth rates for the last two decades have averaged between 8% and 10%. The Asean region has shown that they understand trade dynamics and a major stimulus to growth. Besides the Asean-China free trade agreement, they also have free trade deals with India, South Korea, Japan, Australia and New Zealand. Included in the Asean-China free trade deal is an agreement on FDI. The agreement stipulates that there will be similar transparency and legal protection for Chinese companies in the Asean region as those granted to member countries of the bloc. This simply makes it easier for capital to flow from China to the Asean region. The net inflow of FDI into Asean countries from China has been substantially positive since the start of tariff reductions in 2005. It is thus much easier for companies to seek competitive advantages within the region, leading to increased investment and ultimately higher growth. It is high time that Pakistan and Central Asian countries with China create a similar regional free trade agreement that involves reduction or elimination of tariffs and decreased regulations on investments and services. There are investment opportunities across the board as trade acceleration increases the pace of economic growth. Currently, Pakistan's trade with CARs is between $400-500 million annually and is mostly via Afghanistan. This should not be the case. Pakistan shares deep cultural and historical ties with Central Asian states since centuries and therefore it is imperative to enhance mutual interest in regional trade connectivity. Additionally, Pakistan's geographical location would offer CARs the potential to integrate their transit trade routes via Sost-Khunjerab in Gilgit-Baltistan all the way down to Gwadar and Karachi ports on the Arabian Sea. Kashgar, located in southwestern Xinjiang, China is well positioned to become a major regional logistic hub for Transports Internationaux Routiers (TIR) and can be used for access to and from all neighbouring Central Asian countries and integrate with the China-Pakistan Economic Corridor (CPEC). The regional land route connectivity under TIR holds the key to diversifying Pakistan's total trade and unlocking markets in Central Asia. This quicker mode of transportation for regional connectivity can be undertaken by National Logistics Corporation (NLC) and others under TIR and Multimodal conventions. The road route can also be connected for transshipment by rail towards Pakistani ports, which are currently underutilised, then by sea towards their final destinations and vice versa. As trade volumes continue to rise, more and more transit/TIR hubs will emerge within CARs and Pakistan, at last fulfilling the crucial component of CPEC. The writer is a philanthropist and an economist based in Belgium
