Issue Brief "Chabahar"India's Economic Gambit By Jawad Falak, Zeeshan Muneer and Hassan Riaz www.cscr.pk INTRODUCTION:

India is an important South Asian country and a regional power. India in addition to having vast territory and huge population of 1.2 billion also possess abundant natural resources, including agricultural land, oil and gas. It also possesses nuclear weapons and maintains a large military. India is one of the largest economies in the world and is an emerging market. It has a GDP of 1.8 trillion (USD). Indian industrial base is strengthening with new textile, pharmaceutical, automobile and IT units being set up across India. The literacy rate in India is also rising which is producing skilled work force and proficient technicians, doctors, engineers etc and this has attracted FDI in India in shape of software services, call centers and business process outsourcing. Indian economy has been growing at a rate of 7 % since 2001. If India is able to sustain this growth rate for the next decade, it will most likely become third largest economy in the world next only to USA and China. Favorable growth factors such as cheap and trained labor, low cost manufacturing, consumer spending power and countless business opportunities has made India an attractive business destination for western multinational companies and firms.

The increasing cooperation and trade between India and West has lead India to find shorter and cheaper trade routes. Iran, an important Indian partner provides India with such route. India has decided to invest $500 million to develop strategically important Chabahar port. The port would open a transit route to Afghanistan and Central Asia for Indian goods and products. Chabahar port would also enhance Indian oil and gas import opportunities which would also help tackle Indian future energy shortage crisis. This port would also create new economic opportunities for India in Middle East. This port will enable India to trade with Europe and Russia through International North South Transport Corridor. Chabahar port will help boost Indian economy and will increase its trade ties with Central Asia, Middle East and the West. Indian economic strength will depend on this port in future.

COMPLETE OVERVIEW OF INDIAN ECONOMY:

The strength of a country can be determined by various factors above all it is economy as if a state possess strong economy then international community will also give attention towards its issues. By dividing economy into various heads industry is just one component of economic development. Behind industrial development effective policy mechanism, bureaucratic structure of decision making and some other things determine the economic strength. India is also one of world’s largest economies with massive land and man power and also has massive economic growth potential. For better understanding of Indian economy and industrial power, we divided India into four zones: South, North, West and East India. As India, geographically is very big country so there are about twenty nine states, all has their separate industries especially according to the terrain of a state. This will decide that whether the state will produce the agrarian products, dairy products or that will provide software to outside world. The link of a state with sea port also determines its work and its collaboration with other states as well.

Seven States include in South India named as Maharashtra, Telangana, Goa, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. Twelve states include in Eastern India named as Odisha, Jharkhand, Bihar, West Bengal, Sikkim, Meghalaya, Tripura, Assam, Arunachal Pradesh, Nagaland, Manipur and Mizoram.

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Indian Industrial Regions (Courtesy Blog Berlin)

States in South India:

South India mainly comprises on seven states namely Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Goa Maharashtra, and Telangana.

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4 www.cscr.pk Major Industries in South India State wise:

Telangana is mainly an agrarian state and various agrarian products like cotton, sugarcane, mango and tobacco, these all crops are also called cash crops. Vegetable oil is also made with sun flower and peanuts used in daily meal also grown in this province. Some hard technologies include information technology, biotechnology even the province is also rich in coal reserves.

Goa is popular for Garments, diamond cutting factories, jewels, gems, automotive parts, IT and pharmaceuticals. A report published by Rajiv Gandhi Institute for Contemporary Studies and Confederation of India under which Goa was ranked on 4th number in industrial development. Goa also has twelve plus industrial zones which mainly handle the division of massive industry.

Karnataka is also known as large number of educational institution which shows the highest literacy in state. It is only reason the main industries are IT, Pharmaceuticals, electronics which is mainly run by intellectual people. Some other industries run by man power include leather, steel tourism, cement and automobiles. Tamil Nadu another important state for IT, it export software worth of 51 Billion $ alone 2007 and also considered as India’s hum for IT.

Kerala another important state in South India possess many household or cottage industry and it gave employment opportunity to more than one million people in just one state. Some other industries include rubber, tea, coffee, black pepper, rice, coconut, areca nut, cashew kernels, coffee curry powder as all are related to agrarian products. Fisheries is also another source of income for state which includes squid, tuna, shrimps, lobster, cuttlefish and sardines even Kerala fulfill have of country’s fisheries demand.

Maharashtra is also another important state, Mumbai with is capital, which is also considered as hub for film industry even India’s biggest city. The main industries lies here are wine, biotechnology, chemicals, IT, engineering, electronics, petrochemicals, pharmaceuticals, transportation, textile and waste recycling. The corporations like Maharashtra Industrial Development Corporation are present in every state with full willingness for economic development. Even these are present in every state and with their collaboration with each other they produce massive industrial output.

States in Eastern India:

States include in Eastern India are Mizoram, Manipur, Nagaland, Arunachal Pradesh, Assam, Tripura, Meghalaya, Sikkim, West Bengal, Bihar, Jharkhand and Odisha.

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6 www.cscr.pk Various Industries in East India:

All States in East India have different products according to their terrine and play their role in country’s progress. Here we mention as a whole the industrial strength of East India as states have been already mentioned. The various Industries include bamboo, agricultural, horticulture, tourism, food processing, IT, medical plants, handlooms, handicrafts, sericulture, hydropower, allied industries, minerals, mining, arts and crafts, weaving, sugar cane, carpet weaving, wood carving, ornaments, iron and steel, chemicals, beverages, floriculture, hydroelectric power and cement. States in North India:

States in North and Central India includes Chhattisgarh, Madhya Pradesh and Uttar Pradesh.

Industries in North and Central India: North India is locked between other states and Nepal even then the industrial growth is quite well here the industries like iron and steel, cement, biotechnology, auto components textiles, agro and forest based industries, pharmaceuticals and tourism and IT. Some cottage industries are handlooms, handicrafts, food processing and sports goods.

7 www.cscr.pk States include in Western India:

West India includes Occupied Jammu and Kashmir, Himachal Pradesh, Punjab, Rajasthan, Gujarat, Haryana, Uttarakhand. Industries in Western India:

The terrain of this region is more prone towards agrarian products however some other industries also lie there. These include paper, cement, pharmaceuticals, light engineering equipment, IT, electronics, hydropower, chemicals and petrochemicals, gems, oil and gas. Some agrarian industries include textile especially silk textile including woolen textile, food based industries and diary.

These were some industries states wise and how these are playing the vital role in Indian development however there are some other industries which have their significance these may include.

Industries on Broader Paradigm:

India is rich in natural resources with second largest man power in world which signifies cheap labor mad massive cheap exports. Mainly Indian economy is run by 60 plus major and minor industries, however remaining are mentioned below. As these have their significance for India’s regional development.

India’s Major and Minor Industries:

• Zinc Industry: Two giants in Zinc Industry Hindustan Zinc and Binani Zinc • Turbine Industry: Mainly related to Wind energy • Tractor Industry • Toy Industry • Television Industry: Massive viewers • Telecom Industry: Started in 1851 • Tea Industry 172 Years old • Solar Industry: Especially in rural areas • Soap Industry: Different Brands of Soap according to someone’s income • Silk Industry: 2nd largest producer, 18 % of world production, their own demand is high • Shipping Industry: 90 % Indian trade via sea, • Rubber Industry • Retail Industry: Fifty largest retail industry, • Real Estate Industry: 26.53 Million Houses • Railway Industry: One of the largest network in world • Printing Industry • Power Industry: Necessary for economic progress • Poultry Industry: Constantly in rising • Plastic Industry: • Pearl Industry: Natural Pearls are located in Gulf of Mannar and Kutch • Weaving Industry: Provide largest work force Metallic Industries of India (Maps of India) 8 www.cscr.pk

• Paint Industry: Rapid Urbanization, • Oil Industry: First found in 1867 at Makum near Margherita in Assam • Mutual Fund Industry: Have its role in FDI management • Music Industry: • Insurance Industry: Oriental Life Insurance Company in Calcutta in 1818 • Hotel Industry: • Health Care Industry • Granite Industry: Rich in Granite reserve geographically • Furniture Industry • Film Industry • Fertilizer Industry • Electronic Industry: Communication system, augmentation of defense capabilities • Diamond Industry: Match with international standards • Cosmetic Industry • Copper Industry: Covers 3 % of world reserves • Chocolate Industry • Banking Industry • Aviation Industry: Covers 75 % domestic needs • Aluminum Industry

Indian Economic Growth:

• Indian current GDP 1.877 Trillion, Comprised on Agricultural 17.4 %, Industry 25.8%, Services 56.8%

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• For the period of 2014-2015, the total trade was 758.3 Bn $ with Exports at 310.3 Billion $, While Imports are 447.9 Billion $. This leads to a negative balance of 137.6 Billion $

Indian Export Decline

India’s Trade deficit narrowed to over a five-year low of $5.07 billion in March, with imports declining sharply by 21.6 per cent year-on-year as against a decline of 5.5 per cent of exports Exports declined for the sixteenth straight month in March to $22.72 billion, while imports fell to $27.79 billion during the month. Exports for the financial year ended March stood at $261.1 billion, down 15.9 per cent from last year, while imports declined 15.3 per cent to $379.6 billion, data released by Ministry of Commerce and Industry showed. “The trend of falling exports is in tandem with other major world economies. The growth in exports have fallen for the United States (10.81 per cent), European Union (7.40 per cent), China (11.37 per cent) and Japan (12.85 per cent) for January 2016 over the corresponding period previous year as per World Trade Organization statistics,” the ministry said

Indian Commercial and Military Ports

A port is a location on a coast or a shore that contains one or more harbors where ships can dock. They are also used to transfer people and material to and from land. The locations of the ports are selected to optimize access to land and navigable water that can be used for commercial purposes and for shelter from waves and winds. Wadi al- Jarf on the Red Sea is one of the oldest known artificial harbors in the world. Like other countries, India also houses many sea ports.

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Source: Blog Berlin

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With a coastline of more than 7,500 km, India forms one of the biggest peninsulas in the world. The country has 13 major sea ports and about 200 non-major sea ports and intermediate ports. All the sea ports are located in the following states - Maharashtra, Gujarat, Odisha, Tamil Nadu, Daman and Diu, Andhra Pradesh, Andaman and Nicobar Islands, Kerala, Karnataka, West Bengal, Lakshadweep, Puducherry and Goa. The major ports are administered by the Shipping Ministry of the Central Government, while the minor ports are taken care of by the Ministry of the respective States where they are located. Some of the major sea ports in India are mentioned as below:

Mumbai Port: Locate at the mainland of west Mumbai; it is the largest port in India. About one-fifth of the foreign trade of India predominantly in mineral oil and dry cargo is handled by Mumbai Port alone. Kandla Port: Located in the Gulf of Kutch, it is one of the prominent ports on the West Coast of the country. The port was developed to decongest Mumbai Port.

Chennai Port: The second largest port in India, Chennai Port (or Madras Port) primarily handles fertilisers, general cargo, iron-ore and petroleum products.

Jawaharlal Nehru Port (or Nhava Sheva Port): Situated in the Konkan region, it is a major port of the Arabian Sea and handles large volume of domestic cargo traffic and international container traffic. Haldia Port: A major seaport located near the Hooghly River in West Bengal, it is the most important centre of jute industries. It is also known as the 'Gateway of Eastern India'.

Ennore Port: Located at the north of Chennai, this port was established to reduce congestion on Chennai Port. It is also India's first corporate port.

Kochi Port (or Cochin Port): Kochi Port is located on the sea route of the Arabian Sea and the Indian Ocean. Export of tea and coffee and import of chemical fertilizers and mineral oil are handled by the port.

Paradip Port: The artificial deep-water port located in Odisha is an important port on the eastern shore. Coal, iron-ore and other dry cargoes are handled at the port. It has a cold handling plant, a railway system and a national highway that connects it to the road networks of the rest of the country.

Tuticorin Port: Tuticorin Port is one of the major ports in Tamil Nadu and one of the largest container terminals in India. The port handles the trade of coal, food grains, salt, sugar, petroleum products and edible oils and carries out major trade with the neighboring country of Sri Lanka.

New Mangalore Port: Located at the southern tip of the Karnataka coast, it is also an important port in India. The port exports commodities such as granite stones, cashew, manganese and coffee and imports products like LPG, timber, cargo container and others. List of Major Sea Ports in India Sea Port Name Location Chennai Port or Madras Port Chennai, Madras Haldia (Kolkata Dock System & Haldia Dock Complex) Kolkata Jawaharlal Nehru Port, also known as Nhava Sheva Maharashtra, South Mumbai Kamarajar Port or Ennore Port Ennore, Chennai Kandla Port Gujarat, Gulf of Kutch Kochi Port or Cochin Port Kochi, Kerala New Mangalore Port Manglore, Karnataka Mormugao Port Panaji, Goa Mumbai Port West Mumbai, Maharashtra Panaji Panaji Goa Paradip Jagatsinghpur, Odisha Tuticorin Port (now called V.O.Chidambaram Port) Tuticorin, Tamil Nadu

12 www.cscr.pk Indian Naval Bases

Source: RevistaMilitary 13 www.cscr.pk

Base City Type Latitude Longitude INS India New Delhi RIN Headquarters 28°36’N 77°12’E Calcutta Garden Reach Shipbuilders and Engineers 22°32’N 88°25’E Cochin, Kerala Cochin Shipyard Limited Repair Dry Dock 09°58’N 76°14’E Goa, Kerala Goa Shipyard Limited Repair Dry Dock 15°30’N 73°55’E Mumbai Mazagon Dock Limited Repair Dry Dock 18°58’N 72°49’E Western Naval Command Bombay Dockyard Naval Dockyard, Mumbai 18°58’N 72°49’E Dabolim, Goa HQ for Naval Aviation 15°23’N 73°52’E Karanja Naval War College 18°53’N 72°55’E Lakshadweep, Lacca- Patrol Craft Base 11°00’N 72°30’E dive Is. Lonavala Naval Training Center 18°45’N 73°25’E INS Agnivahu Colaba, Mumbai Missile Boat HQ 18°55’N 72°49’E NAS Hansa Dabolim, Goa naval air station 15°23’N 73°52’E INS Mandovi Goa officers basic training institution 15°30’N 73°55’E INS Jeevanti Goa Naval Hospital __°__’N __°__’E INS Valsura Jamnagar, Gujarat engineer training institution 22°28’N 70°04’E INS Tunir Karanja, Mumbai Missile Prep Fac. 18°58’N 72°49’E INS Kadamba Karwar Naval Base 14°8’N 74 °10’E (Project Seabird) [Binaga Bay] INS Jawarhalal Nehru Kerala Naval Academy 11°00’N 78°00’E Future Site INS Shivaji Lonavala training institution 18°45’N 73°25’E INS Akshat Lonavala training institution 18°45’N 73°25’E INS Abhimanyu Mumbai Marine Training Facility 18°58’N 72°49’E INS Angre Mumbai Western Naval Command 18°58’N 72°49’E INS Aswini Mumbai Naval Hospital 18°58’N 72°49’E INS Hamla Mumbai training facility 18°58’N 72°49’E INS Shikra Mumbai helicopter base °’N °’E INS Vajrabahu Mumbai Submarine facility 18°58’N 72°49’E INS Dwarka Okha, Gujarat Naval Base 22°28’N 69°05’E Eastern Naval Command Calcutta VLF Station 22°32’N 88°25’E Chennai VLF Station 13°05’N 80°17’E Visakhapatnam Eastern Naval Command 17°42’N 83°18’E [Vizag] Visakhapatnam Hindustan Shipyard 17°42’N 83°18’E [Vizag] Visakhapatnam HQ Submarines 17°42’N 83°18’E [Vizag] NAS Rajali Arakkonam, Tamil Naval Air Station 13°06’N 79°40’E Nadu INS Netaji Subhash Calcutta Naval Facility 22°32’N 88°25’E INS Agrani Coimbatore, Tamil training institution 11°00’N 76°58’E Nadu INS Garuda Kochi, Kerala Naval Aircraft Yard 09°58’N 76°14’E INS Chilka Orissa Basic training institution __°__’N __°__’E INS Kattabomman Tirunelveli, Tamil VLF Station 08°50’N 77°40’E Nadu

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INS Virbahu Visakhapatnam Submarine facility 17°42’N 83°18’E [Vizag] INS Satavahana Visakhapatnam Submarine school 17°42’N 83°18’E [Vizag] INS Kalyani Visakhapatnam Naval Hospital 17°42’N 83°18’E [Vizag] INS Eksila Visakhapatnam technical facility 17°42’N 83°18’E [Vizag] Southern Naval Command Cochin HQ Southern 09°58’N 76°14’E INS Venduruthy Cochin Training center 09°58’N 76°14’E INS Dronacharya Cochin 09°58’N 76°14’E Andaman & Nicobar Naval Command INS Kardip Nicobar Advance Base 08°00’N 93°30’E INS Jarawa Port Blair Support facility 11°40’N 92°45’E INHS Dhanvantari Port Blair Naval Hospital 11°40’N 92°45’E Source: Global Security.org India’s Top Twentyfive Trading Partners

Year: 2015-2016(Apr-Feb) Total Trade Rank Country Export Import Trade Balance 1. CHINA P RP 8,208.75 -48,702.54 2. U S A 36,900.23 17,236.30 3. U ARAB EMTS 27,169.28 9,051.26 4. SAUDI ARAB 5,841.71 -13,032.35 5. SWITZERLAND 823.24 -17,672.71 6. GERMANY 6,447.51 -4,375.35 7. HONG KONG 11,124.81 5,463.99 5,660.82 8. KOREA RP 3,244.63 -8,691.28 9. INDONESIA 2,518.79 -9,563.59 10. SINGAPORE 6,978.51 6,611.24 367.27 11. JAPAN 4,279.53 8,966.68 -4,687.16 12. U K 8,041.27 4,862.93 3,178.33 13. BELGIUM 4,578.86 7,509.69 -2,930.83 14. MALAYSIA 3,435.67 8,408.38 -4,972.71 15. NIGERIA 2,038.37 9,462.43 -7,424.06 16. IRAQ 944.67 -9,349.76 17. AUSTRALIA 2,865.92 8,301.27 -5,435.36 18. VENEZUELA 2,028.07 7,631.01 9,659.07 -5,602.94 19. QATAR 809.69 8,387.12 9,196.81 -7,577.43 20. SOUTH AFRICA 3,370.69 5,523.53 8,894.22 -2,152.84 21. IRAN 2,625.58 5,674.12 8,299.70 -3,048.54 22. THAILAND 2,730.02 5,041.20 7,771.22 -2,311.18 23. ITALY 3,806.67 3,720.87 7,527.54 85.79 24. VIETNAM SOC REP 4,792.68 2,355.25 7,147.93 2,437.43 25. FRANCE 4,247.14 2,592.28 6,839.42 1,654.86 Total of Top countries 159,852.28 -117,858.55 India’s Total 237,327.24 -113,390.65 % Share of Top countries 67.36 79.18 74.53 103.94 Source:Dept of Commerce, India 15 www.cscr.pk Potential of Indian Economic Growth (Futuristic Paradigm):

After China, India is next in providing the cheapest labor force for its own requirement and the rest of the world as well. If there will be any major industrial change in world India will benefited from it as well. This is highlighted by the agreements signed by Modi government with Western Countries and influx of foreign direct investment by various countries which include the West but some Middle East states as well. It shows India’s long lasting objectives towards region especially its collaboration with Iran in various sectors and investment in Afghanistan. On one side India is taking investment from other countries on the other hand she is also doing investment in Iran, Afghanistan even in Central Asian States as well. India is planning to broaden its foreign investments by developing Chabahar port. This port is vital for Indian economic interests.

National Highways of India:

National Highways Development Projects:

Currently India is moving from ports development to road development under the name of National Highways Development Project. It shows India’s real intentions towards its access to Chabahar port. Indian state Gujarat has very significance in this regard as Port of Kandla is 100 KM from the main highway. It means if we say that after the development of this highway India will has direct access to Chabahar via Kandla. Even this road infrastructure is about to complete except some specific areas in Central India.

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19 www.cscr.pk INDO-IRANIAN RELATIONS:

Iran holds the key to India's plan to build an economic corridor which would enable it to carry out trade with Central Asia and Europe. India and Iran established diplomatic relations in 1950. During Cold War, India's tilt towards former Soviet Union and Imperial Iran's strong alliance with USA did not allow the two states to develop close ties with each other. After 1979's Islamic Revolution in Iran, the relations between the two states started improving considerably . Strong opposition of Taliban and the support of Northern alliance in Afghanistan by both the states paved way for further cooperation.

Post 9/11, the relations between the two states improved further. The two countries established close trade ties. Today, Iran is the second largest supplier of crude oil to India. India, on the other hand has invested massively in Iran's oil and gas industry. About 40 % of refined oil consumed by India is imported from Iran. India also exports agricultural and industrial products to Iran . India is also investing huge sums in Iranian infrastructure especially in rail and road infrastructure.

Since Prime Minister Modi took office in 2014, the relations between the two states saw considerable improvement. India is willing to develop strong trade and economic ties with Iran. In May this year, PM Modi flew to Tehran and signed 12 agreements, including a deal to develop Iran's Chabahar port. India will spend $500 million on the project, with a plan to invest an additional $16 billion in the Chabahar free trade zone . The massive Indian investment in Chabahar port project is an indication of the centrality of this port in future economic aspiration of India.

CHABAHAR PORT PROJECT:

BRIEF HISTORY OF CHABAHAR PORT

Chabahar is located in Southeast of Iran in Sistan and Baluchistan province. The port provides an easy access to Indian Ocean as well as Oman Sea and Persian Gulf. The work on this port started in 1973 but the Iranian Revolution delayed its development. The port proved vital during Iran-Iraq war since Iran carried out its trade through it . The government in Iran made plans to expand this port and make it functional but economic and trade sanctions imposed on Iran due to its nuclear program made it difficult for the government to allocate required funds for this project.

ECONOMIC SIGNIFICANCE OF CHABAHAR PORT FOR IRAN

Iran is a large country. Its southern and eastern parts are under developed and are marred by insurgency. Development of Chabahar port will bring great benefits for these under developed areas. Connection of Chabahar with Afghanistan and Central Asia will boost Iranian economic growth and development.

IMPORTANCE OF THIS PORT FOR INDIA

Chabahar port offers access to Afghanistan, Central Asia and Europe and India got involved in building this port in 1990's to gain access to these regions Chabahar port holds importance in Indian economic ambitions. India is busy constructing roads in Iran and Afghanistan in order to connect Chabahar with Afghanistan and Central Asia. Between 2005 and 2009, India has spent $100 million to construct a road from Delaram in Afghanistan to Zarnaj at the Iran-Afghanistan border. Iran has also constructed a road between Chabahar and Milak which is close to Zarnaj . Through Milak, Zarnaj and Delaram connectivity has been established to the Afghan “Garland road” which connects the major cities in Afghanistan, Herat, Kandahar, Kabul and Mazar-e-Shareef. Once this port is integrated with International North South Transport corridor, India will have access to Russia and Europe. This port will also provide India the access to Middle East. Studies indicate that the corridor at Chabahar could bring down costs as well as time taken to transport cargo trade to Europe by approximately 50 % for India.

20 www.cscr.pk DISTANCE BETWEEN CHABAHAR AND INDIAN PORT KANDLA

Distance between Indian port of Kandla in Gujarat and Chabahar is only 1000 kilo meters (650 nm) and it would take ships only 2 days to travel between the two ports . According to Indian Shipping Minister Nitin Gadkari,” the distance between Kandla and Chabahar port is less than the distance between New Delhi and Mumbai, so what this agreement does is enable us quick movement of goods first to Iran and then onward to Afghanistan and Russia through a new rail and road link”.

INDO-IRANIAN AGREEMENTS ON CHABAHAR PORT PROJECT

In 2002, India and Iran signed a long standing agreement to develop Chabahar into a full deep sea port. Plans were made to expand the port from its current capacity of 2.5 million tons to 12.5 million tons annually . In 2015, governments of both states signed an MoU to develop Chabahar port. According to this understanding, India would be able to have direct access to Afghanistan through sea route after the completion of project. India also pledged to invest $85 million for the development of floating Special Purpose Vehicle which would enable the accommodation of more ships.

In May 2016, India signed a historic deal with Iran and Afghanistan under which India would invest $635 lion to develop the strategically important Chabahar port. As part of agreement, India would develop berths at the port at the cost of $85 million over the course of 18 months. India will also ensure the availability of $150 million for the first phase of construction of the port. India has also further offered to supply $400 million worth of steel towards the construction of rail link between Chabahar and Zahidan. In total, Indian commitments to Iranian infrastructure total approximately $635 million as per 12 MoU's signed in May 2016 . A MoU was also signed for the construction of Chabahar-Zahidan railway.

STRATEGIC IMPLICATIONS OF THIS PROJECT

Many experts have elucidated the strategic implications of this port project by India. According to US analyst Rory Daniels, Indian investment in Chabahar and Chinese investment in Gwadar are instances of strategic encirclement. Another analyst Padukone states that India has need to establish naval counterweight to China's presence in Gwadar as India sees the Gwadar port as a manifestation of strong China-Pakistan alliance that seeks to choke Indian investments in the Indian Ocean region . This port will have great strategic implications for India because it will enable it not only to counter Chinese ambitions in Indian Ocean but also to enhance its trade with Central Asia and Europe.

IMPACTS OF CHABAHAR PORT ON INDIAN ECONOMY:

The impacts of Chabahar port project on Indian economy can be summed up as follows:

1) Chabahar port project would provide vital access to India to the newly unlocked Iranian economy, while shoring up India's access to the Afghan economy. India would be able to fulfill the Iranian needs of rice, sugar and other consumable commodities while Indian needs of oil shall also be met.

2) Chabahar port would strengthen and broaden the Indian potential for more multi-way trade and cultural exchange with Iran, Afghanistan Central Asia and Russia while also providing market access to Europe and Middle East.

3) The trade between India and Iran has doubled over the past two years to $4billion dollars. The establishment of Chabahar port is expected to scale up the trade and business activities between the two states to unprecedented levels.

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4) Chabahar port will fulfill Indian energy needs. The port will serve as a way station for energy imports coming from Iran, Gulf region and Central Asia destined for India. This would help in tackling any energy shortages in future which would ensure the continuous growth of Indian industrial base .

5) India is constructing infrastructure in Iran as part of the Chabahar port project. Indian commitments of $400 million worth of steel towards the construction of rail link between Chabahar and Zahidan would not only help strengthening the Indian steel companies but would also create employment opportunities for thousands of Indians in Iran.

6) Chabahar port project will give boost to the International North South Transport Corridor (INSTC). The route entails the ship, rail and road routes for enabling trade between India, Iran, Central Asia, Russia and Europe. Chabahar port would give momentum to INSTC and would help India to carry out trade with Europe further increasing Indian economic growth and industrial output .

7) Chabahar port will decrease the cost of transportation of goods from India to Central Asia and will also serve as a safe all weather trade corridor. This would encourage small and big industries in India to invest in Iran-Afghanistan and Central Asia which would increase the GDP growth rate up to approximately 8.3 % once Chabahar port starts functioning.

8) Chabahar port will enable Indian companies to invest upto US $15 billion in the Chabahar special economic zone by building gas and urea plants as well as other industries.

9) India would also be able to invest in Iranian and Afghan natural resources sector such as coal, steel. Copper, iron, oil and gas. This would ensure cheap availability of raw materials which would reduce the production cost of various finished products. Thus Indian companies will be able to extract more profits with lesser investments.

10) New markets in Caucasus and Eurasia would be opened for trade and investment to India once Chabahar port project starts functioning.

CHABAHAR PORT PROJECT: THREAT MATRIX:

Chabahar port will ensure economic growth and development of all the states involved in the project. However, this project is facing various threats. These threats can be classified into two categories: Conventional and Non- Conventional threats.

CONVENTIONAL THREATS

Nuclear Threats (Pakistan and India Impact)

• The formost threat to Chabahar port in the nuclear domain is the enmity between Pakistan and India. In case of any altercations between the two south Asian nations the possible of nuclear exchange is very high. Such a nuclear exchange will not only devastate the Indian mainland nullifying the Chabahar project but nuclear fallout can deeply impact Chabahar.

Israeli Nuclear attack

• Israel is the only nuclear power though not declared in the Middle East, it has been classified as the main target of the Iranian regime and also views as Iran as its main threat in the region. Although there is less chance of a nuclear attack on Iran which would encompass Chabahar, it still remains as a distinct possibility. Israel’s constant antagonism to the Iranian nuclear program and its opposition to the P 5 +1 nuclear deal as well as statements by various high level officials are testimony to this scenario.

22 www.cscr.pk Arab Atomic attack

• There is also another scenario of an Arab-Iranian nuclear exchange whose possibility is very low. It will only be possible in a scenario in which both Iran and an opposing Arab country like Saudi Arabia both go nuclear and resort to a nuclear exchange which comes after a conventional war.

Rogue Indian Nuclear material

• Some theft of nuclear material inside India possesses very grave threats towards regional security. As Highly Enriched Uranium kept under high safeguards is being stolen from various plants inside India. It underscores the reach of various non state actors who not only try but are actually successful in their objectives as well as the weak and inefficient structure of Indian nuclear material. Militant groups can use such materials to construct dirty bombs or even full-fledged nuclear devices. If any fall out happen even within India then it will be a great catastrophe for the region as a whole. If such an incident happens within India it could cause an economic collapse which would compromise the Chabahar project.

Global Nuclear Exchange

• Another likely scenario is the event of nuclear exchange between two nuclear global powers such as the US and Russia. The full utilization of arsenals of both counties would cause global mega death and the collapse of the global system which will end all states including India and Iran and by extension the Chabahar project

Global Nuclear Weapon States (Courtesy: SIPRI)

23 www.cscr.pk Threats posed by States (Military Threats)

Israel

• Israel considers Iran its main regional threat it has often threatened to use conventional force against Iran, in such a scenario Israel may target Chabahar via airstrikes but the possibility is low due to proximity of Iran main port of Bandar Abbas to Israel. However such a conventional war can undermine the economy of Iran which can severely damage the feasibility of the Chabahar project.

Arab States

• The emerging cold war situation between Iran and Saudi Arabia and Iran could also lead to conventional war between Iran and an Arab State (Saudi Arabia) / group of Arab nations (Arab Collation). Chabahar can be targeted in such a scenario to reduce both Iranian naval and economic capability.

Pakistan and India

• Chabahar port can face a major challenge in case of any escalation between India and Pakistan which would result in a conventional warfare. Chabahar port which is only 172.2 km away from the naval base in Gwader would make it susceptible to airstrikes, naval bombardment, missile attacks and other conventional means of warfare. Also warfare between Pakistan and India can lead to economic hardships that could compromise the Chabahar port project as well as disrupting shipping.

America

• Though the US has agreed in principle to abide by the P 5+1 agreement it’s still has not taken other options on the table. It also include the conventional means of warfare such as airstrikes, in case of any attack on Iranian nuclear facilities by the US or the US led collation the impact on Iranian economy will be severe and can cause of economic collapse of Chabahar project. Additionally in case of escalation after airstrikes the US in order to deprive Iran of the ability to close the strait of Hormoz, can attack Iranian navel and commercial facilities which will include Chabahar.

China-India War

• In case of war between China and India the Chinese can use their naval forces to attack Chabahar in order to deprive India of its shipping facilities. However the possibility is low due to the aversion of Chinese to resorting to military means as well as reluctance to escalate such a conflict to another country and such reluctance will be magnified by the Chinese investments in Iran.

NON-CONVENTIONAL THREATS

INSURGENCY/TERRORISM:

• SUNNI INSURGENCY: Chabahar port is located in Southeastern Iran in Sistan and Baluchistan province which is marred by Sunni insurgency and terrorism. The insurgency waged by various groups in this province began approximately in 2004. It is a low intensity asymmetric conflict. The Sunni insurgency is motivated by separatism and/or religious aims. In addition to insurgency various terrorist groups are also active in this region . These insurgents and terrorist groups have brought instability to an already backward and underdeveloped province. This instability is threatening the Chabahar port project. Foreign companies and investors rarely venture into insurgency/terrorism hit areas due to security threats and fears of losses. If the pace of insurgent and terrorist attacks rise, it would be difficult for Iranian government to provide security to Indian engineers and workers and

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installments in the province. In addition to this, Iranian government would have to allocate more resources for the security of the trade route in a volatile region with unfriendly terrain. It would become even more difficult for the Indian government to convince its industrialist and business community to invest in Iran or use the Chabahar port for trade with Central Asia or Europe. In order for this project to succeed, Iran would have to control the insurgency and terrorism in Sistan Baluchistan province or at least to bring it down to manageable levels.

• AFGHAN INSTABILITY: The instability in Afghanistan is also a threat to the Chabahar port project. India through Chabahar port project is aiming to carry out trade with Iran, Afghanistan and Central Asia. But this project is at great risk due to the fact that Afghanistan is not even close to stability. The government in Kabul controls less than 30 % of Afghan territory. Taliban are making advances while Daesh is also on the rise. If this situation persist, India would neither be able to invest in Afghanistan nor make contacts with Central Asian states . Peace and stability are essential for the success of Chabahar port project and insurgency and terrorism in Afghanistan and Iran pose serious threat to this goal.

• CIVIL WAR OR REGIME CHANGE: Civil war and regime change are a non-traditional/conventional security threats. This phenomenon is more common in the contemporary times than ever before. India has planned to invest millions of dollars in Chabahar port project. This project envisions the passage of goods and products through some of the most volatile countries in the world. Iran is a closed society with an oppressive regime. Afghanistan is already suffering from insurgency and terrorism and the ground is ripe for civil war. Central Asia, which would be the destination of these goods and products is also not stable. Dictators hold sway over Central Asian states. All these are the characteristics of a societies where there is always a danger of regime change or civil wars. Chabahar port project will see the light of the day only if these countries remain stable and do not get embroiled in civil wars or struggle for regime change. Hence, regime change and civil wars is also a non- conventional security threat being faced by Chabahar port project.

• ESPIONAGE: Iran has been a target of subversive activities by foreign states primarily Israel. Israel’s subversive role was quite prominent in the targeting of Iranian nuclear scientists. There is a high possibility of Israeli agents carrying out large scale espionage and terrorism in order to contain a resurgent Iran that can lead to the undermining of the Chabahar port. The port itself can be targeted in a devastating strike such as blowing up of fuel depots that could cripple the facilities.

• INDIAN INTERNAL CONDITIONS: India itself is very unsatisfactory in terms of internal security. It is affected with several militant movements across its length and breadth. The Naxalite insurgency controls several swathes of central India and threatens to dismember India into two halves. There are also separatist movements in its northeast ranging from Assam to Manipur that threaten Indian natural resource reserves. The Khalistan movement is undergoing resurgence according to Indian intelligence agencies. India’s brutal hold on the disputed Jammu and Kashmir region is leading it to face a militant backlash from groups like the Lashkar-e- Taiba, Jaish-e-Muhammad & Indian Mujahideen. However, the main threat comes from Saffron terrorists or Hindutva militants whom the present government refuses to recognize. According to Wikileaks, Senior Indian politicians consider Saffron terrorists more dangerous than Islamist militants due to their ability to unleash havoc in the main Indian urban centers like Mumbai. This cocktail of militancies can severely impair India’s economy and ability to invest in Chabahar.

THREAT 1: Implications of Red Corridor:

Some separatist movements have strong hold on some part of India from North to South normally called red corridor. It is huge landmass which shows the inefficiency of government to satisfy their own people. The economy disparity among different classes forced these groups to retaliate against State and force their own agenda. The write also seems weaken over these areas as shown in the map, it is true that international community is paying less attention towards these issues but their importance cannot be denied. As they are indigenous people of India and have some expectation from their government which is failed to fulfill their demands. On the longer period of time a state cannot suppress to its own citizens just on economic grounds. So the situation like this show long lasting instability inside India which is ultimately a big question mark on India’s economic progress. 25 www.cscr.pk

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THREAT 2: Role of Seven Sisters:

The areas like Assam are far from the Central Government and have some separatist elements normally called seven sisters. There are two separatist organization in Assam comprised on the area of 78,000 sq KM approximately one is National Democratic Front of Bodoland. It is mainly dominated by Christians led by I K Songbijit, their main objective is to get free land from Bodo people. The other one is United Liberation Front of Assam (ULFA), who also wants the same thing even they have longer history and link their struggle to Ahom Kingdom which was there in somewhere in history. However an agreement signed between Indian government and ULFA back in 2011to lower down their aggressive activities of both sides.

The situation in Nagaland is not different from Assam as there are two militant outlets one is Naga National Council and second is National Socialist Council of Nagaland. Both have their same objectives and also promote Naga Nationalism, as the district comprised on 16,000 sq KM so it is grave matter of concern for Indian authorities. The cases like these show the inefficiency of central government which is inefficient in controlling its own territory. It seems like the state is helpless in front of these militant outlets.

Meghalaya is also witnessing the same situation as Garo National Liberation Army and Hynniewtrep National Liberation Council. There two militant outlets are working in area comprised on 22,000 sq KM with thesame objective of separation also a matter of grave concern. Manipur another district in north east India isfacing militancy in form of United Liberation National Front and People Revolutionary Party of Kangleipak. Their main agenda towards Manipur is sovereign and socialist Manipur, these organizations are not formed over a night rather

27 www.cscr.pk they have history of five decades. It shows that these people were never satisfied with Delhi government or after subcontinent got independence from Britain.

Tripura is also adjoining area to Manipur with two separatist organizations like National Liberation Front of Tripura and All Tripura Tiger Force also have the same objectives. Two organizations are working in Mizoram one is Hmar People’s Convention and second is Bru National Liberation Front. The organizations like these especially in small area of north east India is really a great matter of concern. If India wants to rise economically and want to become Asian tiger then on which cost. These are unsatisfied people living in India if they are not willing to become a part of it then what India mean the central government can do in this regard.

Afghanistan Insurgency:

The ongoing insurgency in Afghanistan as shown in the map indicates some severe threats. As Afghanistan will get benefit from Chabahar port and it will also link to Central Asian Republics but the ongoing scenario presenting the opposite situation. In this case India will not be able to get benefit from Afghanistan even then their lot of investment. The threat matrix in case of Afghanistan is much high which should and must be a matter of grave concern for India.

28 www.cscr.pk ECONOMIC THREATS:

• INDIAN ECONOMIC WOES: The success of the entire Chabahar port project depends upon the investments which have been pledged by India. In May this year, PM Modi signed a tripartite agreement with Iran and Afghanistan for the development of Chabahar port and promised more than $500 million for this purpose. But questions are being raised by many economic experts in India and abroad about the viability of these promises. Although the economic growth rate per anum of India is well above 7% , it still is facing huge economic problems. Indian population is growing fast, its infrastructure is crumbling, corruption is rampant, inflation and large budget deficits among others are the problems which have slowed down Indian economic growth . In 2015, inflation in India picked up to 5.4 %. Corruption and malpractices are also on the rise. Indian governments have failed to address the problem of rebuilding much needed infrastructure in India. These economic conditions have raised many eyebrows and critics are asking whether India would be able to invest so much in a project whose success isn't guaranteed. Although, the investments in Chabahar port project will be made over many years but any meltdown in Indian economy or slow economic growth will threaten this project.

• IRANIAN ECONOMIC WEAKNESS: While the economy of Iran has started to open up to the world, the threat of sanctions still hang over it like a sword. The P5+1 plan has made room for devastating sanctions if Iran is found to be in violation of the agreement. In such a scenario any foreign investment in Iran like the Chabahar project will immediately be undermined. There is a high possibility due to the rather wary reaction of the Iranian Supreme Leader to the P5+1 deal. In such a scenario, the Iranian “economy of resistance” may not be sustainable for l ong as well.

• GWADAR: The CPEC project between Pakistan and China is also a challenge to Chabahar port project. The present structure of Chahbar is not in optimum shape. The berths in Port of Chabahar include general cargo and bulk. Berth capacities range from 2,000 to 2,500 tonnes. Chabahar Shahid Beheshti Jetty is 600 metres long and can berth four vessels of up to 25,000 gross tonnage and 11-metre draught at once. The other Shahid Kalantary Jetty has a length of 1100 metres, four metallic ready-made jetties. Adequate reserves of water and electricity efficient telecommunication network, warehouses and cold storage facilities are already available. Gwadar Port has the capacity to handle large crude containers of with the deadweight up to 500,000 tonnes. It will have three container terminals, a bulk cargo terminal, a grain terminal and an oil terminal.

The development of Gwadar will attract Kabul and Central Asian Republics more. Kabul is 1237 kilometers away from Gwadar whereas the distance between Kabul and Chabahar is 1840 kilometers (driving distance). It means Gwadar is more suitable for Kabul because it is more than 600 km nearer to it as compared to Chabahar. Kandahar is situated almost in middle as it is 1338 km away from Gawadar and 1346 km away from Chabahar. Herat (the nearest city to Iran) and Gawadar, it is 1637 km away whereas it is 1358 km away from Chabahar. The distance between Gwadar and nearly all Afghan cities is less compared to Chabahar and the law and order situation along Pakistani route is improving. A more detailed analysis will come in the following section of this IB.

• ECONOMIC VIABILITY also plays an important role in ventures like Chabahar. The Indian design about displacing Gawader as the gateway of central Asia is hindered by the fact that Gawader connects the world to China, an 20 • trillion $ economy on PPP basis, whereas Chabahar connects to India, an eight trillion $ economy, to Iran Beyond Iran, the cost would be around $20 billion through the turbulent regions of Afghanistan and it will take India and Iran another 100 years to pacify those areas.

CYBERATTACK

The threat of a cyberattack remains extremely high in the case of Iran. Iran has already been afflicted with a cyber attack by the Stux net virus. Stuxnet is a malicious computer worm believed to be a jointly built American-Israeli cyber weapon. Although neither state has confirmed this openly, anonymous US officials speaking to the Washington Post claimed the worm was developed during the Obama administration to sabotage Iran’s nuclear program with

29 www.cscr.pk what would seem like a long series of unfortunate accidents. Israel has not publicly commented on the Stuxnet attack but confirmed that cyberwarfare is now among the pillars of its defense doctrine, with a military intelligence unit set up to pursue both defensive and offensive options.

In 2009, a year before Stuxnet was discovered, Scott Borg of the United States Cyber-Consequences Unit (US-CCU) suggested that Israel might prefer to mount a cyber-attack rather than a military strike on Iran's nuclear facilities. The preference for cyber warfare can also make its way towards Israel’s quest of stopping a rising Iran. In such a case, it’s most plausible target will be the infrastructure that will play havoc with the Iranian economy and may as well cause the demise of many a venture like Chabahar.

GWADAR VS CHABAHAR:

Pakistan's Gwadar port and Iran's Chabahar port both have unique geo strategic and geopolitical importance. The two ports are deep sea ports and are approximately a 100 miles apart from each other. These ports are located at the mouth of Strait of Hormuz in the Arabian Sea. These ports are located at cross junction of international oil trade and shipping routes while connecting three regions ie Central Asia, South Asia and the Middle East. These two ports lie in Indian Ocean region which has abundant natural resources. Indian Ocean holds great importance because most of the world oil trade passes through here. It is home to strategically important waterways and checkpoints such as Suez Canal, Bab al-Mandeb, Strait of Hormuz and the Strait of Malacca. It is also home to 65 percent of the world’s raw material, 31 percent gas and over half of the world’s oil exports .

Strait of Hormuz is one of the most important waterways. It connects the oil fields of Persian Gulf, Gulf of Oman and the Indian Ocean. It is the only waterway which gives an outlet to the largest oil producing states of Persian Gulf. It is estimated that the strait carries almost 88 % of the Persian Gulf oil to the world and almost 20 % of the world oil which makes it to carry 35 % of all seaborne oil shipment . Daily, almost 17 million barrels of crude oil and almost 2 million barrels of petroleum products pass out from the Persian Gulf through the strait.

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Due to the significance of Strait of Hormuz in particular and the Indian Ocean in General, the importance of Gwadar and Chabahar ports have exacerbated. Due to this fact, both China and India are funding these deep sea port projects. China is investing heavily in Pakistan's Gwadar while India is busy investing in Iran's Chabahar port. China intends to find shorter, safer and cheaper routes to Middle East and Africa while India plans to access landlocked Afghanistan and Central Asia through Iran by lessening their dependence on Pakistan .

In mid 2015, the Chinese President announced the launching of China Pakistan Economic Corridor (CPEC) project which will connect western Chinese region of Kashgar with the Gwadar port in South-Western Pakistan. A massive $46 billion investment was promised by China to develop Gwadar port and its supporting rail-road infrastructure. This investment also included the updating and installment in energy infrastructure in Pakistan to overcome its energy crisis . This project once completed will connect Pakistan with landlocked Central Asian states while bypassing restive Afghanistan. Simultaneously, it will provide a shorter and less expensive route to China to access Middle East and Africa. China also plans to make Gwadar a hub for transporting Gulf oil through pipelines to the Chinese region of Xinjiang while bypassing the risky and costly Strait of Malacca. It will reduce the transportation cost and supply time and will allow China to escape from the US monitored shipping lanes.

Gwadar port also has great military significance for China. It could possibly become a future operating naval base for China. China plans to install listening posts here and also intends to deploy modern air defense unit, military garrison and huge Chinese built refinery petrochemicals storage facilitates. Gwadar would also serve as a refuelling point for huge Chinese submarines. These capabilities will not only enable China to encircle India but will also help it to counter US naval activities in Indian Ocean in general and Persian Gulf in particular. Gwadar port will be an important base in the Chinese string of pearls which is an important ingridient of Chinese maritime miilitary strategy.

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India is busy investing and constructing the Chabahar port since early 1990's. Chabahar port holds importance in Indian economic ambitions. India is busy constructing roads in Iran and Afghanistan in order to connect Chabahar with Afghanistan and Central Asia. Between 2005-2009, India has spent $100 million to construct a road from Delaram in Afghanistan to Zarnaj at the Iran-Afghanistan border. Iran has also constructed a road between Chabahar and Milak which is close to Zarnaj . Through Milak, Zarnaj and Delaram connectivity has been established to the Afghan “Garland road” which connects the major cities in Afghanistan, Herat, Kandahar, Kabul and Mazar- e-Shareef. Once this port is integrated with International North South Transport corridor, India will have access to Russia and Europe. This port will also provide India the access to Middle East. Studies indicate that the corridor at Chabahar could bring down costs as well as time taken to transport cargo trade to Europe by approximately 50 % for India. In May 2016, India signed a historic deal with Iran and Afghanistan under which India would invest $635 lion to develop the strategically important Chabahar port. Chabahar port holds great importance in Indian military strategy as well. India intends to use Chabahar port for military purposes. It wants to counter Chinese ambitions in Gwadar while at the same time to encircle Pakistan.

Pakistan's Gwadar and Iranian Chabahar ports are located in the same region and are very near to each other. But tentative assessment of the capabilities of these ports indicate that Gwadar port is far superior to Chabahar in many aspects. Both the ports are deep sea ports. Gwadar port extends into deep sea with East and West bays. While Chabahar port doesn't have this quality. Gwadar port planned capacity is 300 to 400 million tons of cargo annually. It is far larger than the planned capacity for Chabahar which is 10 to 12 million tons of cargo annually.

India pledged to invest $85 million for the development of floating Special Purpose Vehicle which would enable the accommodation of more ships in Chabahar and to increase the capacity of the port. Gwadar port do not need such floating special purpose vehicles since it extends to deep sea. It has enabled Gwadar to accommodate many more ships than Chabahar .

Gwadar port surpasses Chababar port in terms of the investment which is being done for the development of these ports. China has pledged to invest $46 billion for the development of Gwadar and its supporting rail road infrastructure. Roads, railways, energy units and communication networks will be established across the entire length of Pakistan which will benefit entire Pakistan. On the other hand, India has pledged to invest a little over $600 million in chabahar port project and its supporting infrastructure.

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CPEC will connect Pakistan with China and ultimately Central Asian states through China. This will enable Pakistan to bypass restive Afghanistan which is marred by terrorism and insurgency. On the other hand, the Chabahar port project plans to link India with Central Asia by traversing the entire length of Afghanistan. This has put this project dependent on the peace and stability in Afghanistan which dose not seem probable in near future since most of Afghan territory is controlled by the Taliban. Moreover, Afghan institutions are weak and are marred by corruption. Afghan Army and Police are weak and many among their ranks hold allegiances to warlords and the Taliban. This indicates that Pakistan's Gwadar port is far superior to Iran's Chabahar port project.

COUNTERING CHABAHAR:

Gwadar and Chabahar port projects serve the same cause of enabling the stakeholders involved to access their destinations with ease and safety. But the rivalry between the competitors has lead each of them to neutralize others project. China and India are two rivals who have a long history of enmity and hostilities. The Indian designs to sabotage the Gwadar port project has lead many who want it to succeed to discuss various strategies to counter the Indian sponsored Chabahar port project. Following are a few strategies :

1) Pakistan's Exclusive Economic Zone (EEZ) has grown by 150 nautical miles, adding around 50,000 sq km of international waters to its territory. A United Nations commission has accepted Pakistan's claim for extension of its continental shelf limits from 200 nautical miles to 350 nautical miles. Pakistan now enjoys exclusive rights over seabed and subsoil resources , allowing it to drill for petroleum or lay submarine cables or pipelines in the added area. In addition to that, Pakistan's naval power would increase to unprecedented levels due to the deployment of Chinese Naval forces in Gwadar. In case of any hostilities between Pakistan and India or China and India, an effective blockade could be imposed on Indian naval bases in Gujrat and Mumbai. This would make it impossible for India to access Central Asia through Chabahar. Another scenario is that, Pakistan can declare its EEZ out of bound for Indian shipping. In that case, India would have to travel around 5000 sq km of Pakistan's maritime territory which would increase the time and cost of reaching Chabahar port in Iran.

2) Route 606 also known as Delaram-Zarnaj Highway or A71 is a 218 km roadway in Nimruz Province of Afghanistan connecting the Delaram District in Afghanistan to the northern border of Iran. The opposite way goes towards the south near Zarnaj Afghanistan. It is one of the busiest roads in Afghanistan and provides an important trade route between Iran and the rest of Asia. It connects Afghan Iran border with Kandhar Herat Highway in Delaram which provides connectivity to the other major cities via A01. Route 606 is an important part of Chabahar port project. It will enable India and Iran to carry out trade with Afghanistan and with Central Asian states as well. The problem with this road is that it passes through those areas which are mostly under the influence of Afghan Taliban. Indian plans to access Central Asia will only be realized if there is stability in Afghanistan and the writ of Afghan state is restored. Instability in Afghanistan will in itself be a blessing in disguise for Gwadar port project. India also plans to establish rail link between Iran and the Afghan mineral rich area in Haji gug in Bamyan province which is only 80 km away from Kabul city. This region is also marred by violence and any success in Indian plans depend again on peace in Afghanistan.

3) The best way to counter Chabahar port project is simply to incorporate Chabahar port in CPEC project and link it with Gwadar port. It will not only neutralize Indian threat to Gwadar port project but will also strengthen ties between Islamabad and Tehran. Iran has time and again stated that it is not against Pakistan's Gwadar port project and will welcome any effort which will benefit both the states. Pakistan needs to focus on the development of Gwadar port and ensure that plans for CPEC are realized. If Gwadar port starts functioning to its full potential it will surpass the Indian sponsored Chabahar port project manyfolds.

CONCLUSION:

The Chabahar venture while lucrative for the parties of Iran and India also has a rather fragile nature. Both nations while holding vast potential for economic growth suffer lack in infrastructure and finance that can causethe Chabahar project to be undermined. The plethora of threats present due to instability in the region and extra

33 www.cscr.pk regional & intra regional rivalries also put a big question mark on Chabahar’s feasibility.

Pakistan faces a lot of risks due to Chabahar as it can cause it to be isolated and lose its leverage on Afghanistan by means of trade. However, Gwadar appears more feasible in economic and technical aspects than Chabahar. If Pakistan plays its diplomatic cards right it may as well wean away Kabul from the Chabahar project and nullify the Indian project.

Yet the recent Pakistani declaration to link both Chabahar and Gwadar seems to be the most feasible idea at the moment. Not only will Pakistan’s economic future be safeguarded but it will share in the economic bounty of regional economic connectivity. Such connectivity may also make both Iran and Afghanistan wary of facilitating tools of foreign subversion onto Pakistan’s soil.

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• "Five Things About Chabahar Port and How India Gains from It." Timesofindia-economictimes. Accessed May 29, 2016. http://articles.economictimes.indiatimes.com/2016-05-23/news/73290279_1_chabahar-port-gwadar- port-kandla-port. • "Volatile Sistan-Baluchistan Region Is Base for Insurgents." WSJ. Accessed May 30, 2016. http://www.wsj.com/ articles/SB125591291724293363. • • "Afghan Turmoil Threatens NATO's 'mission Accomplished' Plans." Reuters. Accessed May 30, 2016. http:// www.reuters.com/article/us-nato-summit-afghanistan-idUSKBN0GX0PP20140902. • "Problems Facing Indian Economy." Economics Help. Accessed May 30, 2016. http://www.economicshelp.org/ india/problems-indian-economy . • Zohaib, Muhammad Ali. "Chabahar or Gwadar, Which One is Suitable for Afghanistan?" Voice of Journalists. Accessed May 29, 2016. http://www.voiceofjournalists.com/chabahar-or-gwadar-which-one-is-suitable-for- afghanistan/. • "A Tale of Two Ports: Gwadar Versus Chahbahar." World News Report. Accessed June 19, 2016. http:// worldnewsreport.in/a-tale-of-two-ports-gwadar-versus-chahbahar/. • "Gwadar Vs Chabahar | Opinion | Thenews.com.pk." The News International: Latest News Breaking, Pakistan News. Accessed June 19, 2016. http://www.thenews.com.pk/print/67245-gwadar-vs-chabahar. • "Chabahar Vs Gwadar: Gaining Advantage Over China-Pakistan Axis." The Quint. Accessed June 19, 2016. http:// www.thequint.com/opinion/2016/05/21/chabahar-vs-gwadar-gaining-advantage-over-china-pakistan-axis- hassan-rouhani-ali-khamenei-india-iran-relations. • "Gwadar Vs Chabahar Vs India." Siasat.pk Forums. Accessed June 19, 2016. http://www.siasat.pk/forum/ showthread.php?462908-Gwadar-vs-chabahar-vs-india. • "Chabahar Free Trade Zone Will Enable Us Direct Access to Iran and Other Countries: Gadkari." The Indian Express. Accessed May 28, 2016. http://indianexpress.com/article/india/india-news-india/narendra-modi-iran- visit-chabahar-free-trade-zone-will-enable-us-direct-access-to-iran-and-other-countries-saving-45000-crores- spent-on-urea-subsidy-gadkari-2815121/.

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Authors

Jawad Falak has acquired his degree in IR from NDU and is also an ACCA. He is currently working as DD Operations CSCR and can be reached at [email protected] and he tweets @JawadFalak

Zeeshan Muneer has completed his LLB from Punjab University and a degree in International Relations from National Defense University Islamabad. He has a deep interest in international affairs and International Humanitarian Law. He is employed as a Research associate in CSCR and is part of CSCR Research Team.

Hassan Riaz The writer is an International Relations graduate from National Defence University,Islamabad. He has been working with Pakistan House and SASSI in the past, currently he is working with CSCR. He has completed his thesis on 'US Iran Nuclear Deal its implication on region'. His areas of interests includes domestic problems of Pakistan and on going turmoil in Middle East generally and Iran specifically.

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