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Chabahar: From more port pacts to managing risk, India’s next move revealed

India is looking to replicate the Chabahar port pact model in other strategic locations across the region in a bid to acquire additional assets, according to a recent statement by Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal.
India’s move comes after a March report by the US intelligence community warned that the People’s Republic of China (PRC) would continue to pursue the establishment of additional overseas military installations and access agreements, including in New Delhi’s neighbourhood, with possible bases in Pakistan, Sri Lanka, Myanmar, Seychelles, and the UAE being in Beijing’s sights.

India aims to replicate Chabahar model

Against this backdrop, Sonowal, who on Monday signed a 10-year pact with Iran to operate the Chabahar port, told The Economic Times that India was actively exploring opportunities in a bid to enhance its trade connectivity and maritime presence.
Stating that India aims to replicate the Chabahar model in other strategic locations, Sonowal said that New Delhi would do so “by adhering to similar principles” such as identifying ports in regions that offer economic advantages and then investing in the development and modernisation of port infrastructure.

India Ports Global Ltd (IPGL) and the Ports and Maritime Organisation (PMO) of Iran on Monday signed the Long-Term Bilateral Contract on Chabahar Port, enabling the operation of the Shahid Beheshti Port terminal in the Chabahar Port Development Project for a period of 10 years. Under the contract, India will procure, install, and operate crucial equipment at Chabahar. IPGL is a company 100 per cent owned by the Ministry of Ports, Shipping and Waterways.

Chabahar, the first overseas port to be operated by India, is seen as New Delhi’s response to the Gwadar port in Pakistan that is being developed under China’s Belt and Road Initiative (BRI).

Chabahar will complement IMEC

Sonowal also said that Chabahar would complement the India-Middle East-Europe Economic Corridor (IMEC) proposed at the G20 summit in New Delhi last year, adding that the port would contribute to the “success and viability” of the IMEC project.

The IMEC, which is a US-led connectivity project that would link India to Europe via the Gulf, has been stalled at present due to the war in Gaza and its fallout.

India will mitigate risks linked to Chabahar

While stating that the long-term Chabahar contract held both commercial and strategic potential for India and that the port in Iran would enhance trade between India and West Asian and land-locked Central Asian nations, Sonowal also acknowledged that Chabahar port’s operations could be impacted by regional tensions to some extent.

However, Sonowal added that a number of steps, including collaborating with regional partners and strengthening port security, could be taken to mitigate the risks.

Stating that India would continue to diplomatically engage with regional stakeholders to promote stability and manage tensions, Sonowal said New Delhi would implement “comprehensive risk management strategies to anticipate and mitigate potential disruptions”.

On Monday, the United States (US) had warned that any country having business dealings with Iran ran the “potential risk of sanctions”, noting that it was aware that Tehran and New Delhi had signed a deal concerning the Chabahar port. The warning came despite the Chabahar port being previously exempt from US sanctions.

Sittwe port is operational

Significant progress has been made in developing facilities at the Sittwe port in Myanmar, along with setting up warehouses and improving its connectivity to the hinterland, Sonowal told the financial daily.
Sonowal added that the Sittwe port was operational, with successful trial runs that handled cargo and verified its logistical capabilities having been completed.

In April, India gained the rights to operate its second overseas port, Sittwe, in Myanmar’s sensitive Rakhine state, with the Ministry of External Affairs (MEA) approving a proposal for India Ports Global Ltd (IPGL) to take over the operations of the entire port located on the Kaladan River.

Similar to any other Indian domestic port, IPGL will operate Sittwe with full rights. The Sittwe deal is a long-term one that is to be renewed every three years. Under the agreement, IPGL will raise finance to develop the port.

The Sittwe port, which was initially built with a $500 million grant-in-aid from India, can offer a significant connectivity advantage for cargo to reach from Vizag and Kolkata to the Northeastern states, bypassing Bangladesh.

However, reports emerged in February that India’s Kaladan Multi-Modal Transit Transport Project (KMTTP) had faced a significant setback after Paletwa, an important town in Myanmar, was captured by a rebel group. KMTTP aims to connect the port of Kolkata with the port of Sittwe, which would then be connected to Mizoram by road and the Kaladan river that flows by Paletwa.

What are China’s plans in India’s backyard?

The US intelligence community believes that China will continue to pursue the establishment of additional overseas military installations and access agreements, including in New Delhi’s neighbourhood.

Published on March 11, an intelligence report, called the The Annual Threat Assessment of the US Intelligence Community, said: “The People’s Liberation Army (PLA) will continue to pursue the establishment of overseas military installations and access agreements in an attempt to project power and protect China’s interests abroad.”

The assessment, published by the US Office of the Director of National Intelligence (ODNI), added: “Beyond developing its military base in Djibouti and its military facility at Ream Naval Base in Cambodia, Beijing reportedly is considering pursuing military facilities in multiple locations, including — but not limited to — Myanmar (Burma), Cuba, Equatorial Guinea, Pakistan, Seychelles, Sri Lanka, Tajikistan, Tanzania, and the UAE.”

China and India are engaged in a competition to expand their economic influence in the Indian Ocean, with the operating rights for ports playing a significant role in this rivalry. After Hambantota in Sri Lanka and Djibouti in Africa, China has also approached Maldives and Bangladesh to invest in their ports.
Source: Business Standard

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