By: Salman Rafi Sheikh

With Iran’s Chabahar port now in operation, a new geography of trade in Asia has come into existence that may have far reaching geo-economic and geo-political consequences not only for India – which has invested uS$500 million – Iran and Afghanistan but also for Pakistan as well.

For one thing, with the port on the Gulf of Oman, now fully operational and with India and Afghanistan linked economically and bypassing Pakistan as well, Pakistan’s concept of Afghanistan being their “strategic depth” against an Indian land invasion has died out, leaving Pakistan’s policy-makers with fears of increasing Indian encirclement from both eastern and western sides of the border. The move also marks Pakistan’s failure to limit India’s increasing involvement in Afghanistan both economically and strategically.

But the Chabahar port is not just about bypassing or encircling Pakistan; it is more about – and largely defines –the role India is likely to play in shaping its own position in Asia as China’s chief competitor. While no match to the China-Pakistan Economic Corridor or even the Gwadar port – which has problems of its own – in terms of the capacity to handle relative cargo volume, the development of the Iranian port does indicate that India is sticking to its non-CPEC mode of relations with China, and is emphatically asserting its own place in accordance with its self-defined image of big regional power – an image encouraged by the US as well.

For India, Chabahar is a route that will redefine its relations not only with Afghanistan and Iran but also with the entirety of Central Asia, a culmination of a race between India and China to build ports in Asia. Through the port, not only does India want to rebuild its oil-based relationship with Iran but also aims to build, in the long run, a nascent trade route tantamount to China’s New Silk Roads. The Chabahar port is also supposed to be linked with International North-South Transport Corridor, and would thus connect South Asia to Europe as well.

The purpose, in short, is to capture economic space in as resource-rich but economically un-diversified, region: Central Asia. A closer look at figures of trade between India and Central Asia and China and Central Asia reveals that for India stakes are extremely high, especially if it wants to emerge as China’s prime competitor.

In 2001, Chinese exports to Central Asia amounted to almost half a billion dollars as against India’s US$100 million. By 2015, however, Chinese exports had grown at a much faster pace than India, reaching US$18 billion against India’s US$950 million. While this imbalance suggests why India has invested millions of dollars in the development of this port, it doesn’t explain why, for instance, India chose Chabahar over Iranian port of Bandar Abbas, which already has direct rail connectivity to Turkmenistan and from there to Kazakhstan.

The reason for choosing Chabahar appears to be strategic rather economic for both India and Iran. Iran realizes that it needs a functional and fully developed seaport away from the historically contested Arabian Gulf. For India, the underlying reason for choosing Chabahar, Iran’s southernmost coastal city, is its geographical proximity to Afghanistan, the only country in the region where it has advantage over China in terms of trade volume.

While clouds of uncertainty had started to loom large over the possibility of the port’s operationalisation due the growing tension between the US and Iran and there were fears that re-imposition of sanctions on Iran might disturb the port’s functioning as well, it is thanks to the US’s cultivation of India as its chief ally against China that the port is functional now.

It isn’t a coincidence that India’s first shipment has come only days after the US Secretary of State Rex Tillerson, on a visit to New Delhi, allayed concerns that the Trump administration’s tough stand on Iran could pose a fresh stumbling block to India’s plans to develop the strategic Iranian port as a regional transit hub. Tillerson was also reported to have said that US did not intend to “interfere with legitimate business activities that are going on with other businesses, whether they be from Europe, India, or agreements that are in place that promote economic development and activity to the benefit of our friends and allies”.

And why would the US interfere now when it desires to ‘enlist’ India in a hundred-year alliance against China?

Just before Tillerson’s visit to Asia two weeks ago, the Secretary delivered a very significant speech at the Center for Strategic and International Studies in Washington, titled ‘Defining Our Relationship with India for the Next Century.’ In that speech, Tillerson hinted that the US would be leaning on India to counter-balance China’s influence in Asia and proposed a new regional security alliance with the US, Japan, India and Australia as its main pillars.

While it can’t be categorically said that India would simply veer into the US’s anti-China gambit, or that it wouldn’t perform a balancing act vis-à-vis the US and its immediate neighbor, China, what still seems most obvious is that if there is one weapon that India can use to perform this balancing act, it is through increasing its economic and strategic leverage in the region.

Chabahar is to play a pivotal role in this re-balancing, although its success for India in the long run depends upon how both India and Iran steer it to its advantage. Significantly enough, if India fails to use this port to increase its trade with Central Asia, the port will end up deepening Indian involvement in the murky waters of the “war on terror” in Afghanistan; while China will continue to increase its own trade volume—a process that is likely to gain pace once Gwadar becomes fully functional with all of trade routes from China into Pakistan being built under CPEC.

Salman Rafi Sheikh is a Pakistani academic and a regular contributor to Asia Sentinel