Last month, Indian Prime Minister Narendra Modi inked a major transport corridor deal with Iran and Afghanistan. According to the terms, India will provide $500 million to develop a port in the southern Iranian city of Chabahar. New Delhi also pledged to invest $16 billion in a free trade zone around the city. Additionally, there will be new roads and a railroad stretching northward from Chabahar to the Afghanistan border. The objective is to generate new trade routes to and from Afghanistan, Central Asia, and beyond.
Admittedly, these investments are small potatoes compared to China’s competing $46 billion economic corridor project next door in Pakistan, which includes the development of the Gwadar port in the Baluchistan province, just 60 miles from Chabahar. The Chabahar deal may be modest in scale; however, its geopolitical ramifications are enormous.
Iran, making good use of its new post-sanctions status, could become a gateway to the critical sea lanes to its south and the highly coveted markets to its north. Afghanistan could host flourishing northward and southward trade routes. And India, long denied transit rights by Pakistan, could have direct land access to Afghanistan and Central Asia for the first time since Partition. In short, the deal is both history making and history defying.
The accord also helps advance U.S. interests, and Washington should therefore embrace it. However, because of Iran’s involvement, the Western reaction to the accord has been muted. When asked about it at a May 24 Senate hearing, Nisha Biswal, the assistant secretary of state for South and Central Asia, was neither critical nor complimentary, saying only that the government is examining it to ensure that it does not violate remaining U.S. restrictions on activities with Tehran.
When U.S. President Barack Obama meets Modi in Washington on Tuesday, he should express his unequivocal support for the deal—and propose ways to help achieve its potential.
The Chabahar deal could benefit two of Washington’s key South Asian friends in a big way. First, doubling in natural gas consumption between 2000 and 2012 and that increasingly relies on imported natural gas to meet domestic demand. According to Indian economists, meanwhile, if India is to return to double-digit growth in the coming decades, it will require a three- to fourfold increase in energy supplies. The Chabahar deal, by boosting India’s energy security, can help meet the needs of its growing economy and help facilitate its transformation into a great power.
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