India developing Chabahar in Iran port for access to Central Asia

Indx TechStyle

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besides the logical reply given by member @Indx TechStyle style above, may i add the following ::-

with serious sanctions now coming from usa to iran and if we extrapolate about usa middle east relations worsening in the future, then i think we are going to see the importance of the Chhabhar port

regarding population base in CA , then are basically only recently independent - give the a bit more time .....besides present pop is 27 million (UZ ) 17 (KZ ) 5 (TK ) plus others approx 10 min and iran 60 = approx 120 million ....not too bad for a start and more from the Arabian peninsula will join in eg our relations with UAE Kuwait , many others are better than theirs with pak


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If we're talkin about Gulf, I can bet my money it's UAE, for horn of Africa, I'll have to think over it again. May be Djibouti.
 

Neo

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India generally cooperated with sanctions on Iran: Report
By PTI | Updated: Feb 07, 2017


India and Iran agreed that India would help develop Iran's Chahbahar port that would enable it to trade with Afghanistan unimpeded by Pakistan.

WASHINGTON: India, a major buyer of oil from Iran, has implemented UN-mandated sanctions against it, a bipartisan Congressional report has said amid the Trump Administration's efforts to muster international support against Tehran after conducting a missile test.

The independent Congressional Research Service (CRS) said in its latest report said that India began reducing economic relations with Iran in 2010 when India's central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.

"India implemented UN-mandated sanctions against Iran and generally cooperated with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran," the report which was presented to lawmakers yesterday.

CRS is the independent research wing of the US Congress which prepares periodic report on issues of interest for lawmakers for them to make informed decisions. Its report are not considered as official report of the US Congress.

In its 42-page report CRS notes that during 2010-2016, India's private sector described Iran as a "controversial market" -- a term used by many international firms to describe markets that entail reputational and financial risks.

In January 2012, Iran agreed to accept India's currency rupee to settle 45 per cent of its oil sales to India, which Iran mostly used to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts and other products.

"India reduced its imports of Iranian oil substantially after 2011 - by the time of the JPA, Iran was only supplying about six per cent of India's oil imports, down from over 16 per cent in 2008. India incurred significant costs to retrofit refineries that were handling Iranian crude. However, since the JCPOA, oil imports apparently have increased to close to 2011 levels," the report said.

Indian firms ended or slowed work on investments in Iranian oil and gas fields--work that is likely to resume now that sanctions have been lifted, CRS said, adding that India and Iran are considering using Turkey's Halkbank to transfer to Iran USD 6.5 billion for oil purchased by India during 2012-2016.

In 2015, India and Iran agreed that India would help develop Iran's Chahbahar port that would enable it to trade with Afghanistan unimpeded by Pakistan.

"With sanctions on Iran now lifted, that project no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra Modi visited Iran and signed an agreement to invest USD 500 million to develop the port and related infrastructure," CRS said.

The report came as US President Donald Trump criticised Iran over its actions. The White House put Iran "on notice" over the move and vowed to take action, setting the stage for confrontation between the two nations.


http://economictimes.indiatimes.com...tions-on-iran-report/articleshow/57016107.cms
 

Neo

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Indian Airlines Reconsider Plans to Conduct Iran Flights

Indian carriers are either reviewing or stalling their plans to start flights to Iran, as the Donald Trump-led US government hardens its stance on the Islamic Republic, ratcheting up diplomatic tensions.

Air India Express is now taking a second look at its plans to start flights to the capital city of Tehran initially slated for later this year, Indian daily newspaper The Economic Times reported.

The carrier has alternative plans ready—Delhi-Tashkent-Almaty or Delhi-Doha-Bahrain—if geopolitical conditions make it difficult to start operations to the country. The plans, however, have not been dropped yet. Air India Express is the low fare international subsidiary of state-run Air India.

Even low-fare carrier Go Air, which was planning Tehran as one of its initial overseas destinations, has stalled those plans for now. The airline plans to start international flights later this year.

Last year, Jet Airways had made plans to fly to Tehran but put them on hold before some clarity emerged on who would lead the US government and which way it would move. The plans are now on the back burner.

The Trump government is said to be considering a renewal of sanctions—cutting trade and aid—on Iran after it recently tested a mid-range ballistic missile.

The plans follow Trump’s far reaching decision of temporarily banning the citizens of Iran and six other Muslim countries from entering the US.

International sanctions on Iran were lifted in 2015 under the Barack Obama administration, after a nuclear pact under which Iran agreed to limit its nuclear program.

India, under the Narendra Modi government, has been trying to strengthen relations with Iran but any kind of ties with it may antagonize the US government, said experts.

There are tactical problems, too. Air India Express operates US plane-maker Boeing’s planes. The biggest chunk of Jet’s fleet is also Boeing-made.

https://financialtribune.com/articl...ines-reconsider-plans-to-conduct-iran-flights
 

vinuzap

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http://www.moneycontrol.com/news/cu...t-afghanistan-us-general_8465961.htmlChabahar port initiative to benefit Afghanistan: US General "There's also, ongoing conversations about water treaties between Afghanistan and Iran. Iran needs Afghanistan's water," he said in his testimony before the powerful Senate committee.



The co-operation between India and Iran on the strategic Chabahar port in southern Iran will be beneficial to Afghanistan in terms of economic development, a top US general has said as he praised New Delhi's initiatives in the war-torn country. "The governments of India, Iran and Afghanistan signed an agreement over the Chabahar Port in southern Iran. Actually, this initiative would be very beneficial to Afghanistan, in terms of economic development," General John Nicholson, Commander of US and NATO forces in Afghanistan told members of the Senate Armed Services Committee during a Congressional hearing on Afghanistan. "There's also, ongoing conversations about water treaties between Afghanistan and Iran. Iran needs Afghanistan's water," he said in his testimony before the powerful Senate committee. "There are mutual interests that Iran and Afghanistan share -- water rights, commerce. We welcome the recent economic treaty between Iran, Afghanistan and India on the Chabahar port. We think this offers Afghanistan economic alternative to going through pack," Nicholson said. India has increased its aid to Afghanistan, he said. "India has dedicated another USD 1 billion on top of the USD 2 billion that they have already given to Afghan development needs and we appreciate their support," he said. At the Brussels Conference in October last year, 75 countries and organisations confirmed their intention to provide USD 15.2 billion to Afghanistan's development needs and this plays a very positive role, going into the future, he said. "These expressions of international commitment reflect the importance which the world places on stability in Afghanistan," Nicholson said. A "milestone" pact on the strategic Chabahar port in southern Iran, which will give India access to Afghanistan and Europe bypassing Pakistan, was inked by India and Iran in May 2016 after detailed discussions between Prime Minister Narendra Modi and Iranian President Hassan Rouhani.

Read more at: http://www.moneycontrol.com/news/cu...s-general_8465961.html?utm_source=ref_article
 

vinuzap

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if operational japan will join it , Israel view :


http://www.jpost.com/Opinion/Op-Ed-Contributors/Irans-Chabahar-port-transforms-its-position-337167


Interim Nuclear Agreement between Iran and the Six Powers provides for the limited easing of trade restrictions on strategic items such as petrochemicals products, aircraft parts and precious metals, accounting for up to $7 billion of trade over the six months following the agreement’s implementation.

With the prospect of even wider Iranian trade in the near future, India’s construction of Iran’s first deep-water port to meet modern shipping standards will radically transform Iran’s geo-strategic position, breaking the international economic pressure on Tehran and transforming Iran into the key transit link for the most cost-effective transportation corridor for European-Indian Ocean trade.





While Iran and India traditionally have been allies in Afghanistan against Pakistan, New Delhi’s drive to construct a deep-sea port at the Iranian city of Chabahar along with transportation corridors running northward has been motivated by New Delhi’s economic rivalry with Beijing.

For Iran, it means a centrally important position in the emerging pattern of trade between Europe and a rising Asia.

One of Iran’s strategic weaknesses is its lack of deep-water ports. Iran’s southern ports, such as Bandar Abbas which handles 85 percent of Iranian seaborne trade, can only receive 100,000 ton cargo ships. Since most shipping is conducted via 250,000 ton cargo vessels, cargo must first be offloaded in the United Arab Emirates and then sent on smaller ships which can dock in Iran. Aside from the hundreds of millions of dollars lost to the UAE, Iran is also vulnerable to a UAE closure of its seaborne trade in the case of conflict between Iran and the UAE or its GCC and Western allies.

Unlike Bandar Abbas, which is located in the congested waters of the Straits of Hormuz, subject to constant US naval patrol, Chabahar is located further east and is the only Iranian port with direct access to the Indian Ocean.

For India, the Chabahar port will serve as the Indian Ocean outlet for New Delhi’s grand International North- South Transit Corridor (INSTC) initiative. With India’s overland access to Central Asia is blocked by Pakistan, the Chabahar deep-sea port and the INSTC running northward through Iran and Afghanistan will provide New Delhi vital access to Central Asian, Russian, and ultimately European markets, enabling India to effectively compete with China. Compared to the current Indian Ocean-European transport route via the Red Sea, Suez Canal and the Mediterranean, the Chabahar-based INSTC is estimated to be 40% shorter and will reduce the cost of Indian trade by 30% (Meena Singh Roy, Strategic Analysis, November 2012).

India began developing the Chabahar port in 2002 in response to China’s construction of a deep-water port at Gwadar, Pakistan, approximately 72 km east of Chabahar (Samanta Pranab Dhal, The Indian Express, March 24, 2012). An extension of the enduring Sino-Pakistani strategic partnership, the Gwadar port provides China with a long-sought-after, land-accessible port on the Indian Ocean. The $248m. first phase of the part was completed in 2006. The $1b. second phase of the port construction will develop two oil terminals and an oil pipeline that will carry energy from Gwadar directly into China. The Sino-Pakistani oil pipeline will provide China with an alternative route for Persian Gulf energy, which would alleviate China’s need to transport oil around the Indian Subcontinent and through the increasingly disputed territorial waters of the South China Sea. The route will be cheaper, less vulnerable and give Beijing greater freedom of action to pursue its claims to sovereignty over the South China Sea (M.T., East Asia Forum December 6, 2013).

Until 2012, India ceased construction of the Chabahar port under pressure from the United States as part of Washington’s efforts toughen the international sanctions against Iran. However, when a Chinese stateowned firm took over administration of the Gwadar port from a Singaporean company in 2012, New Delhi resumed construction of the Chabahar port, overriding Washington’s objections. Whereas the original Chabahar port project and transit corridors involved a trilateral agreement between Iran, India and Russia, the Indian- led 2012 resumption of the project involves the participation of 11 additional countries from Middle East, the Caucasus, Central Asia and Europe, each lured by the benefits of easier access to the Indian Ocean.

New Delhi’s INSTC includes a highway running from the Iranian port through Afghanistan. In addition to India’s $100m. investment in Chabahar, New Delhi has already completed a 200 km road from the Iranian bordertown of Zaranj to Delaram in Afghanistan. India has also assisted in the construction of the Iranian portion of the highway from Chabahar to Zaranj. India is also planning to build a parallel 900 km railway from Chabahar to the iron-ore rich Hajigak region of Afghanistan’s Bamiyan province. Home to the oppressed Shi’ite Hazara ethnic group, Bamiyan’s substantial iron deposits may become a major source of income for the Iranian sympathetic population. The Chabahar port will serve as a cost-effective outlet to bring the iron to market (The Telegraph, November 2, 2011).

Trade between Afghanistan and Chabahar will bolster Iranian and Indian influence in Afghanistan after NATO’s 2014 withdrawal, providing a measure of counter- balance to Pakistani influence.

Although there are no signs of any significant Indian- Iranian naval cooperation, commercial maritime cooperation and joint transportation infrastructure development has elevated the level of Indo-Iranian strategic cooperation (Harsh V. Pant, The Washington Quarterly, 2011). Moreover, the Chabahar port and the INSTC will place Iran at the center of a Eurasian transport corridor for international trade in which significant number of nations are developing vital economic interests.

As the INSTC nears operation, the time-window is diminishing to apply tougher economic pressure on Iran to abandon its nuclear weapons program. While India will secure cost-effective access to markets in Central Asia, Russia and Europe vital for its future economic growth, Iran will secure a position in the world economy less vulnerable to international pressure.

The author is a Fellow at the Department of Middle East and Islamic Studies, Shalem College, Jerusalem, and at the Asia and Middle East Units, Truman Research Institute for the Advancement of Peace, Hebrew University. He also teaches in the Departments of Middle Eastern History and East Asian Studies, Tel Aviv University. The piece first appeared on the website of The Alliance Center for Iranian Studies (ACIS) at Tel Aviv University.
 

ezsasa

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Another test for Modi.....
=======
Does India's Chabahar Deal Make Sense?

May 2017 marks the one-year anniversary of Indian Prime Minister Narendra Modi’s landmark trip to Iran, where he applauded the signing of a regional connectivity agreement centered around Iran’s Chabahar port as the “creation of history.” India’s willingness to make a major strategic play for Central Asian trade is remarkable, but major areas of the plan remain to be fleshed out — most importantly the question of the port’s economic viability, even in a best-case scenario. The likelihood remains that Chabahar will be more of a strategically impactful venture than it is an economic one.

When India, Iran, and Afghanistan signed a trilateral agreement to develop a transport corridor from Chabahar through Afghanistan, it marked the culmination of over a decade of Indian hopes for an alternate land route to Central Asia. The deal depends on Indian state investment: state-owned India Ports Global Private Limited (IPGPL) is responsible for expanding the port itself to bring capacity to 12 million tons per year; India’s EXIM Bank has offered a $500 million line of credit to fund work on rail connections to the port; and Ircon International, another public-sector undertaking, will build a $1.6 billion railroad from Chabahar north to Zahedan on the Iran/Afghanistan border. Zahedan in turn is a node on the Iranian rail network, which connects to Turkmenistan and eventually to Kazakhstan’s Caspian seacoast. It also provides convenient access to the start of the Indian-built Zaranj-Delaram highway, which intersects with the Afghanistan ring road. Despite the occasional hiccup, work on developing Chabahar appears to be progressing: IPGPL is selecting a private contractor to carry out construction.



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The plan to anchor new trade routes to Central Asia with a deep-water port at Chabahar has been frequently described as a riposte to the China-Pakistan Economic Corridor (CPEC) and its Chinese-sponsored port at Gwadar. For India, it is a chance to position itself as a player amidst the land corridor mania that has gripped mainland Asia and to stake its claim as Afghanistan’s primary economic partner. Unsurprisingly, however, the Indian government has sold the plan not as a primarily strategic venture but as an economic one that will promote the “unhindered flow of commerce” between India and Central Asia.

The statistics on China and India’s exports to Central Asia (Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) makes clear the promise and limitations of the project. In 2001, China exported half a billion dollars worth of goods to Central Asia, while India exported $100 million. By 2015, however, China exported nearly $18 billion to the region, while India exported only $950 million. China currently exports nearly twice as much to tiny Tajikistan as India does to the entire region.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

This imbalance suggests an obvious rationale for increasing India’s connectivity to Central Asia. Delhi is only about 1,000 miles from Almaty as the crow flies, compared to 2,500 miles for China’s eastern manufacturing hubs. Chinese goods, however, can travel by rail to Kazakhstan and then take advantage of road access to most of the region, while India’s land route to Central Asia is blocked by unreliable access through Pakistan. Despite the hurdles India faces when exporting to the region, its trade with Central Asia has grown steadily; its exports to Afghanistan, in particular, have increased more than 25 times since 2001. These data suggest that with improved connectivity India’s exports could see more explosive growth. But it’s important to note that Indian exports are still dwarfed by China’s even in regions where it has far better connectivity. Despite its relative proximity to East Africa, for instance, Indian non-fuel exports to four of that region’s largest economies were less than a quarter of China’s in 2015.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

In his speech announcing the project, Modi said that the land route to Europe via Chabahar “could bring down the cost and time of the cargo trade to Europe by about 50 [percent]” compared to the price of sea transport. This is a surprising statistic given that freight charges for maritime shipping are about 60 percent of those for rail freight: for instance, it currently costs about $1,500 to ship a 40 foot container from Shanghai to Europe by sea (sometimes falling as low as $200), versus $2,500 to go by rail, even though the overland route is much shorter.

A 2014 report by the Federation of Freight Forwarders’ Associations of India (FFFAI) in conjunction with the Indian government’s Ministry of Commerce reveals the thorny logistical challenges involved in a sea-land route to Central Asia via Iran. The FFFAI conducted a dry run for the proposed “International North South Transport Corridor,” shepherding 20 foot containers along two test routes, both originating in Mumbai; one terminated in Baku, Azerbaijan and the other in Astrakhan, Russia. The Mumbai-Baku route cost $3,132 and took 33 days from “door to door”; the Mumbai-Astrakhan route cost $3,339 and took 43 days. By way of comparison, a container ship can make the journey from Mumbai to Rotterdam in 26 days, although additional time must be allowed for administrative processes at both ends. Even when the overland route is completely streamlined, it is unlikely to bring goods to European markets faster than the sea routes.

Both routes used in FFFAI’s experiment passed through the existing Iranian port of Bandar Abbas, located less than 300 miles from Chabahar in the Strait of Hormuz. Bandar Abbas, Iran’s largest port, already has direct rail connectivity to Turkmenistan and from there to Kazakhstan. In contrast, even when the Chabahar-Zahedan rail link is completed, goods bound for Central Asia will have to travel farther west to join the main rail line to Mashhad. This makes Bandar Abbas an obvious first choice for rail shipment north. (In fact, goods are currently more likely to travel north via road, but this makes the logistics of an India-Europe rail corridor even more complex.)

Furthermore, multiple passages in the FFFAI report emphasize the importance of volume to decrease shipping charges and time on the India-Iran-Central Asia routes; for instance, currently ships departing Mumbai for Bandar Abbas generally stop in Dubai or at the Gujarati port of Mundra in order to load enough cargo to make the trip economically viable. Greater volume would also allow the Iranian railways to charge a far lower tariff to bring cargo from Bandar Abbas to transshipment points in Northern Iran. The need for volume on what are still nascent trade routes is a strong argument against promoting an alternative port for Indian trade to Iran. This is especially so given that that FFFAI estimated non-agricultural trade along the India-Iran route would be worth only $150 million per year. In the short-term, at least, the Indian government may need to offer subsidies to grow volume on both routes and to create the efficiencies of scale that will make them economically viable.

Chabahar’s principal attraction over Bandar Abbas appears to be its relative proximity to Afghanistan, especially once the Chabahar-Zahedan railroad is complete. Afghanistan is the one country in the region where India beats China in terms of exports, despite the unreliability of passage through Pakistan; the Indian and Afghan governments are anxious to build closer economic ties. But trade with Afghanistan presents numerous complications beyond the simple movement of goods.

Kabul has apparently already warned India that the Taliban could attack trucks carrying Indian exports. This warning is given force by the fact that the Taliban control or contest most of the districts to the east or west of Delaram, the terminus of the Indian-built highway from Iran. Thus Indian goods traveling to Kabul or Herat will have to pass through, or close to, some of the most dangerous parts of the country. Although it is to be hoped that increased trade will eventually help improve Afghanistan’s security situation, the persistence of Afghan insecurity likely makes Chabahar a very long-term play for India.


Source: Long War Journal/Foundation for Defense of Democracies, “Map of Taliban controlled and contested districts in Afghanistan,” updated March 1, 2017. The green line shows the Zaranj-Delaram highway and the yellow line the ring road.

The close bilateral cooperation that infrastructure development requires also threatens to drawn India into the morass of Iran-Afghanistan politics — just as China’s investment in CPEC inevitably involves it in Pakistani internal politics. Iran’s longstanding support for the Afghan Taliban appears to have increased in recent years. Since at least 2015, media reports have indicated that Iran provides factions of the Afghan Taliban with money and materiel. Under President Hamid Karzai, who reportedly received large cash payments from Iran, the Afghan government was largely silent on Iran’s role in the conflict. While Afghanistan still seeks a constructive relationship with Iran, the Afghan senate announced early this year that it would investigate Iran’s ties to the Taliban. So far India has benefited from the diplomatic cover provided by Afghanistan’s support for the Chabahar initiative, but if Afghan-Iran ties worsen India may be forced to pick a side.

Engagement over Chabahar could also bring India and Iran closer just as Iran and the United States are on a new collision course in Afghanistan. The U.S. position has so far remained muted, but a change of administration could increase U.S. willingness to make Iran’s involvement in Afghanistan a major geopolitical issue. In 2012, General John Allen, then leader of U.S. forces in Afghanistan, told Congress that Iran was supporting the insurgency but that it “could do more if [it] chose to.” In late 2016, by contrast, General John Nicholson mentioned Iran in the same breath as Pakistan when discussing the “malign influence” of external actors in Afghanistan. In February, he testified to Congress that Iran was supporting the Taliban. The Trump administration, including a secretary of defense who is a well-known hawk on Iran, is likely less inclined than its predecessor to play down Iran’s support for the Taliban, especially given the possibility that the United States will increase troop strength in Afghanistan.

More than two years since Modi declared that his government had converted the previous “Look East” policy into an “Act East” policy, his regional connectivity agenda in India’s east has largely stalled. India’s desire for better connectivity to its Central Asian backyard is understandable. But Chabahar will involve India more deeply in the murky waters of continental Asian politics. Without a clear economic rationale, it could prove a dangerous distraction from more important efforts.

Sarah Watson is an associate fellow in the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies (CSIS).

http://thediplomat.com/2017/05/does-indias-chabahar-deal-make-sense/
 

hit&run

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Another test for Modi.....
=======
Does India's Chabahar Deal Make Sense?

May 2017 marks the one-year anniversary of Indian Prime Minister Narendra Modi’s landmark trip to Iran, where he applauded the signing of a regional connectivity agreement centered around Iran’s Chabahar port as the “creation of history.” India’s willingness to make a major strategic play for Central Asian trade is remarkable, but major areas of the plan remain to be fleshed out — most importantly the question of the port’s economic viability, even in a best-case scenario. The likelihood remains that Chabahar will be more of a strategically impactful venture than it is an economic one.

When India, Iran, and Afghanistan signed a trilateral agreement to develop a transport corridor from Chabahar through Afghanistan, it marked the culmination of over a decade of Indian hopes for an alternate land route to Central Asia. The deal depends on Indian state investment: state-owned India Ports Global Private Limited (IPGPL) is responsible for expanding the port itself to bring capacity to 12 million tons per year; India’s EXIM Bank has offered a $500 million line of credit to fund work on rail connections to the port; and Ircon International, another public-sector undertaking, will build a $1.6 billion railroad from Chabahar north to Zahedan on the Iran/Afghanistan border. Zahedan in turn is a node on the Iranian rail network, which connects to Turkmenistan and eventually to Kazakhstan’s Caspian seacoast. It also provides convenient access to the start of the Indian-built Zaranj-Delaram highway, which intersects with the Afghanistan ring road. Despite the occasional hiccup, work on developing Chabahar appears to be progressing: IPGPL is selecting a private contractor to carry out construction.



Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The plan to anchor new trade routes to Central Asia with a deep-water port at Chabahar has been frequently described as a riposte to the China-Pakistan Economic Corridor (CPEC) and its Chinese-sponsored port at Gwadar. For India, it is a chance to position itself as a player amidst the land corridor mania that has gripped mainland Asia and to stake its claim as Afghanistan’s primary economic partner. Unsurprisingly, however, the Indian government has sold the plan not as a primarily strategic venture but as an economic one that will promote the “unhindered flow of commerce” between India and Central Asia.

The statistics on China and India’s exports to Central Asia (Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) makes clear the promise and limitations of the project. In 2001, China exported half a billion dollars worth of goods to Central Asia, while India exported $100 million. By 2015, however, China exported nearly $18 billion to the region, while India exported only $950 million. China currently exports nearly twice as much to tiny Tajikistan as India does to the entire region.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

This imbalance suggests an obvious rationale for increasing India’s connectivity to Central Asia. Delhi is only about 1,000 miles from Almaty as the crow flies, compared to 2,500 miles for China’s eastern manufacturing hubs. Chinese goods, however, can travel by rail to Kazakhstan and then take advantage of road access to most of the region, while India’s land route to Central Asia is blocked by unreliable access through Pakistan. Despite the hurdles India faces when exporting to the region, its trade with Central Asia has grown steadily; its exports to Afghanistan, in particular, have increased more than 25 times since 2001. These data suggest that with improved connectivity India’s exports could see more explosive growth. But it’s important to note that Indian exports are still dwarfed by China’s even in regions where it has far better connectivity. Despite its relative proximity to East Africa, for instance, Indian non-fuel exports to four of that region’s largest economies were less than a quarter of China’s in 2015.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

In his speech announcing the project, Modi said that the land route to Europe via Chabahar “could bring down the cost and time of the cargo trade to Europe by about 50 [percent]” compared to the price of sea transport. This is a surprising statistic given that freight charges for maritime shipping are about 60 percent of those for rail freight: for instance, it currently costs about $1,500 to ship a 40 foot container from Shanghai to Europe by sea (sometimes falling as low as $200), versus $2,500 to go by rail, even though the overland route is much shorter.

A 2014 report by the Federation of Freight Forwarders’ Associations of India (FFFAI) in conjunction with the Indian government’s Ministry of Commerce reveals the thorny logistical challenges involved in a sea-land route to Central Asia via Iran. The FFFAI conducted a dry run for the proposed “International North South Transport Corridor,” shepherding 20 foot containers along two test routes, both originating in Mumbai; one terminated in Baku, Azerbaijan and the other in Astrakhan, Russia. The Mumbai-Baku route cost $3,132 and took 33 days from “door to door”; the Mumbai-Astrakhan route cost $3,339 and took 43 days. By way of comparison, a container ship can make the journey from Mumbai to Rotterdam in 26 days, although additional time must be allowed for administrative processes at both ends. Even when the overland route is completely streamlined, it is unlikely to bring goods to European markets faster than the sea routes.

Both routes used in FFFAI’s experiment passed through the existing Iranian port of Bandar Abbas, located less than 300 miles from Chabahar in the Strait of Hormuz. Bandar Abbas, Iran’s largest port, already has direct rail connectivity to Turkmenistan and from there to Kazakhstan. In contrast, even when the Chabahar-Zahedan rail link is completed, goods bound for Central Asia will have to travel farther west to join the main rail line to Mashhad. This makes Bandar Abbas an obvious first choice for rail shipment north. (In fact, goods are currently more likely to travel north via road, but this makes the logistics of an India-Europe rail corridor even more complex.)

Furthermore, multiple passages in the FFFAI report emphasize the importance of volume to decrease shipping charges and time on the India-Iran-Central Asia routes; for instance, currently ships departing Mumbai for Bandar Abbas generally stop in Dubai or at the Gujarati port of Mundra in order to load enough cargo to make the trip economically viable. Greater volume would also allow the Iranian railways to charge a far lower tariff to bring cargo from Bandar Abbas to transshipment points in Northern Iran. The need for volume on what are still nascent trade routes is a strong argument against promoting an alternative port for Indian trade to Iran. This is especially so given that that FFFAI estimated non-agricultural trade along the India-Iran route would be worth only $150 million per year. In the short-term, at least, the Indian government may need to offer subsidies to grow volume on both routes and to create the efficiencies of scale that will make them economically viable.

Chabahar’s principal attraction over Bandar Abbas appears to be its relative proximity to Afghanistan, especially once the Chabahar-Zahedan railroad is complete. Afghanistan is the one country in the region where India beats China in terms of exports, despite the unreliability of passage through Pakistan; the Indian and Afghan governments are anxious to build closer economic ties. But trade with Afghanistan presents numerous complications beyond the simple movement of goods.

Kabul has apparently already warned India that the Taliban could attack trucks carrying Indian exports. This warning is given force by the fact that the Taliban control or contest most of the districts to the east or west of Delaram, the terminus of the Indian-built highway from Iran. Thus Indian goods traveling to Kabul or Herat will have to pass through, or close to, some of the most dangerous parts of the country. Although it is to be hoped that increased trade will eventually help improve Afghanistan’s security situation, the persistence of Afghan insecurity likely makes Chabahar a very long-term play for India.


Source: Long War Journal/Foundation for Defense of Democracies, “Map of Taliban controlled and contested districts in Afghanistan,” updated March 1, 2017. The green line shows the Zaranj-Delaram highway and the yellow line the ring road.

The close bilateral cooperation that infrastructure development requires also threatens to drawn India into the morass of Iran-Afghanistan politics — just as China’s investment in CPEC inevitably involves it in Pakistani internal politics. Iran’s longstanding support for the Afghan Taliban appears to have increased in recent years. Since at least 2015, media reports have indicated that Iran provides factions of the Afghan Taliban with money and materiel. Under President Hamid Karzai, who reportedly received large cash payments from Iran, the Afghan government was largely silent on Iran’s role in the conflict. While Afghanistan still seeks a constructive relationship with Iran, the Afghan senate announced early this year that it would investigate Iran’s ties to the Taliban. So far India has benefited from the diplomatic cover provided by Afghanistan’s support for the Chabahar initiative, but if Afghan-Iran ties worsen India may be forced to pick a side.

Engagement over Chabahar could also bring India and Iran closer just as Iran and the United States are on a new collision course in Afghanistan. The U.S. position has so far remained muted, but a change of administration could increase U.S. willingness to make Iran’s involvement in Afghanistan a major geopolitical issue. In 2012, General John Allen, then leader of U.S. forces in Afghanistan, told Congress that Iran was supporting the insurgency but that it “could do more if [it] chose to.” In late 2016, by contrast, General John Nicholson mentioned Iran in the same breath as Pakistan when discussing the “malign influence” of external actors in Afghanistan. In February, he testified to Congress that Iran was supporting the Taliban. The Trump administration, including a secretary of defense who is a well-known hawk on Iran, is likely less inclined than its predecessor to play down Iran’s support for the Taliban, especially given the possibility that the United States will increase troop strength in Afghanistan.

More than two years since Modi declared that his government had converted the previous “Look East” policy into an “Act East” policy, his regional connectivity agenda in India’s east has largely stalled. India’s desire for better connectivity to its Central Asian backyard is understandable. But Chabahar will involve India more deeply in the murky waters of continental Asian politics. Without a clear economic rationale, it could prove a dangerous distraction from more important efforts.

Sarah Watson is an associate fellow in the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies (CSIS).

http://thediplomat.com/2017/05/does-indias-chabahar-deal-make-sense/
Indian export stat justfy exactly what its Industrial capabilities are, the positive takeaway is that it is on an upward trajectory.

China ranks higher than India in this regard for many decades now. Comparing both to form an analysis that shows India as an unimportant player is nothing but a propaganda.

Indian approach follows tenets of market economy and is more of a venture dictated by private players. As already discussed the capability part India currently can not dump goods and has principle position of not making small nations its debt pets which in long term always fires back. Of course we do not have that kind of money to risk either.

If there is public spending prompted by strategic reasons foreseen by last two Governments then the viability issues must have been discussed. Any trade activity is a bonus to our benefit then.

On Chabhar, If India wouldn't have explored that route then all those import would have never happened in the first place. Also this is not current Govermnets venture but previous government's, may be government before. There has been money and diplomatic resources spent and now it can not debated everyday to rant about its viability by comparing to Chinese ventures. The only way is to spend more and increase the skates.

Throwing another fallacy of India being more closer to CA than China is like accusing India of not bending in front of Pakistan which no sane Indian would like to see (expect few newly turned peaceniks). The vulnerability of depending on Pakistanis for a Trade that is currently close to a billion dollar throws the viability out.

Since Afghanistan is Pakistan's cultivation bed of Jihadis on rent and on top of it a logisticaly 'no-go' area (Kandhar Highjack); the startegic urgency to make inroads wins economical benefits.

This article is going to appeal those who are not aware of India building its port capabilities to increase saturation of Trade using Chabhar. Indian PM has particularly mentioned Chabhar couple of days back on his visit to Gujarat. It means GOI values this connectivity and looking forward to develop it further.

'Look East and Look Central Asia' is both working at same typical Indian pace. People have been critical of the pace of development work and
formalizing Chabhar port connectivity but here authors is again doing faulty comparison when Look east is more in a stage of Diplomatically strengthening relationship with eastern neighbours and exploring trade options on the other hand access to CA and Afghanistan is already activated.

In a nutshell and I have said the same on a different forum that Indian efforts to connect with CA shouldn't be seen as counter to China because our strategic and economical interests are different to China. If there are comparisons made, and China is seen winning then it has to be analysed with more holistic approach.

Author shouldn't have used the word madness of having cordidors to main land Asia. It seems like some communist thoughts are processed sophistically that actually says, 'nothing should be done by India to circumvent Hump called Pakistan'.
 

sthf

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Author is mostly looking through the prism of economics and not strategic geo political relations, which is understandable.

Even though "Acting East", is as @hit&run put it going forward at an "Indian pace" you have to keep in mind that India cannot compete with China as far as the trade is concerned. However, because China has imperialistic tendencies and a penchant for antagonizing the West, it gets more attention.

For example, Indian trade with Africa doubled in past five years and stands where China's was in 2007-08. Difference between two is the attention they receive. China was/is being targeted by hit piece by hit piece since the early 2000s.
 

ezsasa

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Indian export stat justfy exactly what its Industrial capabilities are, the positive takeaway is that it is on an upward trajectory.

China ranks higher than India in this regard for many decades now. Comparing both to form an analysis that shows India as an unimportant player is nothing but a propaganda.

Indian approach follows tenets of market economy and is more of a venture dictated by private players. As already discussed the capability part India currently can not dump goods and has principle position of not making small nations its debt pets which in long term always fires back. Of course we do not have that kind of money to risk either.

If there is public spending prompted by strategic reasons foreseen by last two Governments then the viability issues must have been discussed. Any trade activity is a bonus to our benefit then.

On Chabhar, If India wouldn't have explored that route then all those import would have never happened in the first place. Also this is not current Govermnets venture but previous government's, may be government before. There has been money and diplomatic resources spent and now it can not debated everyday to rant about its viability by comparing to Chinese ventures. The only way is to spend more and increase the skates.

Throwing another fallacy of India being more closer to CA than China is like accusing India of not bending in front of Pakistan which no sane Indian would like to see (expect few newly turned peaceniks). The vulnerability of depending on Pakistanis for a Trade that is currently close to a billion dollar throws the viability out.

Since Afghanistan is Pakistan's cultivation bed of Jihadis on rent and on top of it a logisticaly 'no-go' area (Kandhar Highjack); the startegic urgency to make inroads wins economical benefits.

This article is going to appeal those who are not aware of India building its port capabilities to increase saturation of Trade using Chabhar. Indian PM has particularly mentioned Chabhar couple of days back on his visit to Gujarat. It means GOI values this connectivity and looking forward to develop it further.

'Look East and Look Central Asia' is both working at same typical Indian pace. People have been critical of the pace of development work and
formalizing Chabhar port connectivity but here authors is again doing faulty comparison when Look east is more in a stage of Diplomatically strengthening relationship with eastern neighbours and exploring trade options on the other hand access to CA and Afghanistan is already activated.

In a nutshell and I have said the same on a different forum that Indian efforts to connect with CA shouldn't be seen as counter to China because our strategic and economical interests are different to China. If there are comparisons made, and China is seen winning then it has to be analysed with more holistic approach.

Author shouldn't have used the word madness of having cordidors to main land Asia. It seems like some communist thoughts are processed sophistically that actually says, 'nothing should be done by India to circumvent Hump called Pakistan'.
It's not about the content in the article per say, it's more about the timing of the article. It's come at a time when trump is openly blaming Iran.

The article is written by a scholar from CSIS. as far as I know CSIS is the only think tank which has a grant from US state department to track the developments / reforms in India. We can safely assume CSIS will be asked for their opinions for any American decision making on India.

If the assessment of think tank is wrong, safe to assume it will have implications on American policy making wrt India.
 

zala09

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Another test for Modi.....
=======
Does India's Chabahar Deal Make Sense?

May 2017 marks the one-year anniversary of Indian Prime Minister Narendra Modi’s landmark trip to Iran, where he applauded the signing of a regional connectivity agreement centered around Iran’s Chabahar port as the “creation of history.” India’s willingness to make a major strategic play for Central Asian trade is remarkable, but major areas of the plan remain to be fleshed out — most importantly the question of the port’s economic viability, even in a best-case scenario. The likelihood remains that Chabahar will be more of a strategically impactful venture than it is an economic one.

When India, Iran, and Afghanistan signed a trilateral agreement to develop a transport corridor from Chabahar through Afghanistan, it marked the culmination of over a decade of Indian hopes for an alternate land route to Central Asia. The deal depends on Indian state investment: state-owned India Ports Global Private Limited (IPGPL) is responsible for expanding the port itself to bring capacity to 12 million tons per year; India’s EXIM Bank has offered a $500 million line of credit to fund work on rail connections to the port; and Ircon International, another public-sector undertaking, will build a $1.6 billion railroad from Chabahar north to Zahedan on the Iran/Afghanistan border. Zahedan in turn is a node on the Iranian rail network, which connects to Turkmenistan and eventually to Kazakhstan’s Caspian seacoast. It also provides convenient access to the start of the Indian-built Zaranj-Delaram highway, which intersects with the Afghanistan ring road. Despite the occasional hiccup, work on developing Chabahar appears to be progressing: IPGPL is selecting a private contractor to carry out construction.



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The plan to anchor new trade routes to Central Asia with a deep-water port at Chabahar has been frequently described as a riposte to the China-Pakistan Economic Corridor (CPEC) and its Chinese-sponsored port at Gwadar. For India, it is a chance to position itself as a player amidst the land corridor mania that has gripped mainland Asia and to stake its claim as Afghanistan’s primary economic partner. Unsurprisingly, however, the Indian government has sold the plan not as a primarily strategic venture but as an economic one that will promote the “unhindered flow of commerce” between India and Central Asia.

The statistics on China and India’s exports to Central Asia (Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) makes clear the promise and limitations of the project. In 2001, China exported half a billion dollars worth of goods to Central Asia, while India exported $100 million. By 2015, however, China exported nearly $18 billion to the region, while India exported only $950 million. China currently exports nearly twice as much to tiny Tajikistan as India does to the entire region.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

This imbalance suggests an obvious rationale for increasing India’s connectivity to Central Asia. Delhi is only about 1,000 miles from Almaty as the crow flies, compared to 2,500 miles for China’s eastern manufacturing hubs. Chinese goods, however, can travel by rail to Kazakhstan and then take advantage of road access to most of the region, while India’s land route to Central Asia is blocked by unreliable access through Pakistan. Despite the hurdles India faces when exporting to the region, its trade with Central Asia has grown steadily; its exports to Afghanistan, in particular, have increased more than 25 times since 2001. These data suggest that with improved connectivity India’s exports could see more explosive growth. But it’s important to note that Indian exports are still dwarfed by China’s even in regions where it has far better connectivity. Despite its relative proximity to East Africa, for instance, Indian non-fuel exports to four of that region’s largest economies were less than a quarter of China’s in 2015.


Source: United Nations Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

In his speech announcing the project, Modi said that the land route to Europe via Chabahar “could bring down the cost and time of the cargo trade to Europe by about 50 [percent]” compared to the price of sea transport. This is a surprising statistic given that freight charges for maritime shipping are about 60 percent of those for rail freight: for instance, it currently costs about $1,500 to ship a 40 foot container from Shanghai to Europe by sea (sometimes falling as low as $200), versus $2,500 to go by rail, even though the overland route is much shorter.

A 2014 report by the Federation of Freight Forwarders’ Associations of India (FFFAI) in conjunction with the Indian government’s Ministry of Commerce reveals the thorny logistical challenges involved in a sea-land route to Central Asia via Iran. The FFFAI conducted a dry run for the proposed “International North South Transport Corridor,” shepherding 20 foot containers along two test routes, both originating in Mumbai; one terminated in Baku, Azerbaijan and the other in Astrakhan, Russia. The Mumbai-Baku route cost $3,132 and took 33 days from “door to door”; the Mumbai-Astrakhan route cost $3,339 and took 43 days. By way of comparison, a container ship can make the journey from Mumbai to Rotterdam in 26 days, although additional time must be allowed for administrative processes at both ends. Even when the overland route is completely streamlined, it is unlikely to bring goods to European markets faster than the sea routes.

Both routes used in FFFAI’s experiment passed through the existing Iranian port of Bandar Abbas, located less than 300 miles from Chabahar in the Strait of Hormuz. Bandar Abbas, Iran’s largest port, already has direct rail connectivity to Turkmenistan and from there to Kazakhstan. In contrast, even when the Chabahar-Zahedan rail link is completed, goods bound for Central Asia will have to travel farther west to join the main rail line to Mashhad. This makes Bandar Abbas an obvious first choice for rail shipment north. (In fact, goods are currently more likely to travel north via road, but this makes the logistics of an India-Europe rail corridor even more complex.)

Furthermore, multiple passages in the FFFAI report emphasize the importance of volume to decrease shipping charges and time on the India-Iran-Central Asia routes; for instance, currently ships departing Mumbai for Bandar Abbas generally stop in Dubai or at the Gujarati port of Mundra in order to load enough cargo to make the trip economically viable. Greater volume would also allow the Iranian railways to charge a far lower tariff to bring cargo from Bandar Abbas to transshipment points in Northern Iran. The need for volume on what are still nascent trade routes is a strong argument against promoting an alternative port for Indian trade to Iran. This is especially so given that that FFFAI estimated non-agricultural trade along the India-Iran route would be worth only $150 million per year. In the short-term, at least, the Indian government may need to offer subsidies to grow volume on both routes and to create the efficiencies of scale that will make them economically viable.

Chabahar’s principal attraction over Bandar Abbas appears to be its relative proximity to Afghanistan, especially once the Chabahar-Zahedan railroad is complete. Afghanistan is the one country in the region where India beats China in terms of exports, despite the unreliability of passage through Pakistan; the Indian and Afghan governments are anxious to build closer economic ties. But trade with Afghanistan presents numerous complications beyond the simple movement of goods.

Kabul has apparently already warned India that the Taliban could attack trucks carrying Indian exports. This warning is given force by the fact that the Taliban control or contest most of the districts to the east or west of Delaram, the terminus of the Indian-built highway from Iran. Thus Indian goods traveling to Kabul or Herat will have to pass through, or close to, some of the most dangerous parts of the country. Although it is to be hoped that increased trade will eventually help improve Afghanistan’s security situation, the persistence of Afghan insecurity likely makes Chabahar a very long-term play for India.


Source: Long War Journal/Foundation for Defense of Democracies, “Map of Taliban controlled and contested districts in Afghanistan,” updated March 1, 2017. The green line shows the Zaranj-Delaram highway and the yellow line the ring road.

The close bilateral cooperation that infrastructure development requires also threatens to drawn India into the morass of Iran-Afghanistan politics — just as China’s investment in CPEC inevitably involves it in Pakistani internal politics. Iran’s longstanding support for the Afghan Taliban appears to have increased in recent years. Since at least 2015, media reports have indicated that Iran provides factions of the Afghan Taliban with money and materiel. Under President Hamid Karzai, who reportedly received large cash payments from Iran, the Afghan government was largely silent on Iran’s role in the conflict. While Afghanistan still seeks a constructive relationship with Iran, the Afghan senate announced early this year that it would investigate Iran’s ties to the Taliban. So far India has benefited from the diplomatic cover provided by Afghanistan’s support for the Chabahar initiative, but if Afghan-Iran ties worsen India may be forced to pick a side.

Engagement over Chabahar could also bring India and Iran closer just as Iran and the United States are on a new collision course in Afghanistan. The U.S. position has so far remained muted, but a change of administration could increase U.S. willingness to make Iran’s involvement in Afghanistan a major geopolitical issue. In 2012, General John Allen, then leader of U.S. forces in Afghanistan, told Congress that Iran was supporting the insurgency but that it “could do more if [it] chose to.” In late 2016, by contrast, General John Nicholson mentioned Iran in the same breath as Pakistan when discussing the “malign influence” of external actors in Afghanistan. In February, he testified to Congress that Iran was supporting the Taliban. The Trump administration, including a secretary of defense who is a well-known hawk on Iran, is likely less inclined than its predecessor to play down Iran’s support for the Taliban, especially given the possibility that the United States will increase troop strength in Afghanistan.

More than two years since Modi declared that his government had converted the previous “Look East” policy into an “Act East” policy, his regional connectivity agenda in India’s east has largely stalled. India’s desire for better connectivity to its Central Asian backyard is understandable. But Chabahar will involve India more deeply in the murky waters of continental Asian politics. Without a clear economic rationale, it could prove a dangerous distraction from more important efforts.

Sarah Watson is an associate fellow in the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies (CSIS).

http://thediplomat.com/2017/05/does-indias-chabahar-deal-make-sense/
Maybe Ofcource...

China Should Go for using port Its military power too...

india have boooooooost ..military power and change strategy.. with chahbar port

otherwise its just useless....
 

hit&run

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It's not about the content in the article per say, it's more about the timing of the article. It's come at a time when trump is openly blaming Iran.

The article is written by a scholar from CSIS. as far as I know CSIS is the only think tank which has a grant from US state department to track the developments / reforms in India. We can safely assume CSIS will be asked for their opinions for any American decision making on India.

If the assessment of think tank is wrong, safe to assume it will have implications on American policy making wrt India.
Now I got your concern.

China is investing and projecting to invest more than 500 billions in Iran. If Iran will be hit by Trump than Chinese are going to get hit as well. Therefore If authors is comparing us with China and trying to suggest futility of our relationship with Iran given upcoming instability then it all becomes a shoddy proposition as China will be losing as well.

Only way one can satisfy this author is by swapping our Geography with China so that Iran goes out of the equation.

It is quite typical of Indian intelligentsia to see India through American perspective. However the reality is that GOIs have been quite expert in walking the so called tight rope and balancing its relationships with two opposing entities.
 

IBSA

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India's plan to develop key Iranian port faces U.S. headwinds

Western manufacturers are shying away from supplying equipment for an Iranian port that India is developing for fear the United States may reimpose sanctions on Tehran, Indian officials say, dealing a blow to New Delhi's strategic ambitions in the region.

Lying on the Gulf of Oman along the approaches to the Straits of Hormuz, the port of Chabahar is central to India's hopes to crack open a transport corridor to Central Asia and Afghanistan that bypasses arch-rival Pakistan.

India committed $500 million to speed development of the port after sanctions on Iran were lifted following a deal struck between major powers and Tehran to curb its nuclear program in 2015.

But the state-owned Indian firm that is developing Chabahar is yet to award a single tender for supplying equipment such as cranes and forklifts, according to two government sources tracking India's biggest overseas infrastructure push.

U.S. President Donald Trump denounced the nuclear agreement on the campaign trail, and since taking office in January has accused Iran of being a threat to countries across the Middle East.

Swiss engineering group Liebherr and Finland's Konecranes (KCRA.HE) and Cargotec (CGCBV.HE) have told India Ports Global Pvt Ltd, which is developing the deep water port, they were unable to take part in the bids as their banks were not ready to facilitate transactions involving Iran due to the uncertainty over U.S. policy, the two officials said in separate conversations with Reuters.

These firms dominate the market for customized equipment to develop jetties and container terminals. One official said the first tender was floated in September, but attracted few bidders because of the fear of renewed sanctions. That fear has intensified since January.

"Now the situation is that we are running after suppliers," one official said, speaking on condition of anonymity because of the sensitivity of matter.

A Konecranes spokeswoman declined to comment beyond confirming the company was not involved in the project.

Cargotec and Liebherr did not respond to requests for comment.

Some tenders have been floated three times since September because they failed to attract bidders. A Chinese firm, ZPMC, has since come forward to supply some equipment, the same Indian official said.



THREAT OF SANCTIONS

Trump has called the agreement between Iran and six major world powers restricting Tehran's nuclear program in exchange for lifting of sanctions "the worst deal ever negotiated".

Last month his administration extended relief on Washington's broadest and most punitive sanctions, while carrying out a wider policy review on how to deal with the Islamic Republic.

Uncertainty over U.S. policy is already causing long delays in contracts that Iran has sought with international firms to develop its oil fields and buy planes for its aging airlines.

The lifting of United Nations and European Union sanctions in 2016 partly reconnected Iran with the international financial system crucial to trade.

But large international bankers with exposure to the United States remain unwilling to facilitate Iranian deals for fear of running afoul of narrower, unilateral U.S. sanctions that remain outside the nuclear deal and uncertainty over whether wider sanctions relief will continue.

India's ambassador to Iran said the process of procuring equipment for the Chabahar port was under way and that some of the customized cranes needed up to 20 months to build. The banking situation was slowing improving, he added.

"Tenders are re-floated for a variety of reasons including technical specifications not being met, etc. Banking channels, in recent months, have in fact somewhat eased," Saurabh Kumar said in an emailed response to Reuters from Tehran. "If some companies do not participate, it really is their business."

India has been pushing for the development of Chabahar port for more than a decade as a hub for its trade links to the resource-rich countries of central Asia and Afghanistan. Access to those countries is currently complicated by India's fraught relationship with Pakistan.

Bureaucratic delays, difficult negotiations with Iran and the risk of incurring Washington's displeasure during the financial embargo in Tehran had meant there was little progress on the port until now.

But, prodded in part by China's development of Gwadar port, which lies barely 100 km (60 miles) from Chabahar on the Pakistani coast, Indian Prime Minister Narendra Modi's government has unveiled massive investment plans centered around the Iranian port, offering to help build railways, roads and fertilizer plants that could eventually amount to $15 billion.

So far, even an initial credit line of $150 million that India wants to extend to Iran for development of Chabahar has remained a non-starter as Tehran has not been able to do its part of work.

"They have not sought the loan from us because they haven't awarded the tenders, either because of lack of participation or banking problems," said the second government official.

Ambassador Kumar said the Iran had indicated it would be sending proposals shortly to tap the credit line.

Meena Singh Roy, who heads the West Asia center at the Institute for Defence Studies and Analyses, a New Delhi think-tank, said increasing tension between Washington and Tehran would have an impact on the port project.

"The Chabahar Project has strategic significance for India," she said. "However ... nothing much seems to be moving due to new uncertainties in the region."



(Additional reporting by Tuomas Forsell in HELSINKI; Editing by Alex Richardson)

http://www.reuters.com/article/us-india-iran-ports-idUSKBN19024M
 

sorcerer

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India operationalises sea trade route to Afghanistan via Chabahar, sends first shipment of Wheat

Officials from the Afghanistan Chamber of Commerce and Industries (ACCI) said India will send its first cargo of wheat to Afghanistan through Chabahar Port in Iran.

The ACCI officials said the move to send in at least 130,000 tons of wheat to Afghanistan will strengthen trade ties between the two countries.

“This process is crucial for strengthening trade and transit relations of Afghanistan with India and Iran. We will continue our efforts to provide better grounds for increasing trade activities,” the ACCI deputy head for trade, Kamila Sediqi said.


“Many (Afghan) investors will try to do business through Chabahar once the process kicks off. This will help investors send their goods to India and import goods through a closer route,” the CEO of the ACCI, Atiqullah Nasrat said.

This comes after President Ashraf Ghani said during his trip to India this week that Afghanistan appreciated India’s move to send in the wheat to the country.


http://www.tolonews.com/business/india’s-first-shipment-wheat-enter-chabahar
 

raja696

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Time has come we deliver some transport heli's to afgans as a good will gesture probably lightly armed for patrolling its border areas.
 

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