For most of the hour-long journey, Rashid (not his real name) concealed his excitement about speaking with the visitor he had ferried from Iran’s Konak airfield – a wobbly landing strip straight out of a Wild West film – to Chabahar port. As he came close to the swanky Firdaws Hotel located at the port’s free zone, Rashid couldn’t control his urge to speak. In accent-free Hindustani (he called it Urdu), he asked me, “Are you from India? Here everyone speaks in Urdu.”

Such an interesting initiation to Chabahar, a port city on the shore of the Oman Sea in Iran’s Baluch-Sistan province, made amply clear its strategic location and why India is promising to invest $20 billion in developing the port and other industries in its sprawling free zone. Chabahar allows India to side-step Pakistan, which blocks its access to Afghanistan and Central Asia. Translated as “four springs”, the port has been described by medieval traveller Al Beruni as the entry point to the Indian subcontinent. Pakistan’s Gwadar port, in which the Chinese are investing $46 billion, is barely 72 km away. Proximity to Pakistan’s Baluchistan not only sustains the Urdu of Baluchis like Rashid, but also relationships. Iranians get a 15-day visa to visit Pakistan for weddings and, in some cases, for treatment.

The easy access that Iranians have to Pakistan has been a reason for Islamabad to accuse India of destabilising their side of Baluchistan. Early last year, they arrested one Kulbhushan Jadhav who allegedly confessed that he was an agent of India’s external intelligence agency, the Research and Analysis Wing, which was engaged in stirring up trouble in the region. Pakistanis are using his presence in their custody to put the Iranians on the defensive and, during Iranian President Hassan Rouhani’s visit to Islamabad some months ago, he was aggressively questioned by the Pakistani media about what the Iranian authorities were doing to prevent this Indian subversion.

Pakistan, and also China, is deeply worried over Chabahar. Understandably, there is glee when reports show up in the media that Iranian officials are not really happy with the pace at which the jetties that were given to India at Shahid Bahesti port are coming up. India is committed to the timelines agreed upon when India, Iran and Afghanistan signed a trilateral agreement in May 2016. Afghanistan has been given another option to trade with India as Kabul found the trade transit treaty with Pakistan humiliating. Afghanistan President Ashraf Ghani told Islamabad categorically last September that it should allow goods-laden trucks from India to travel to the Afghan border if it wants reciprocity of access to Central Asia. As the relationship between the Afghans and Pakistanis combusts, pressure is being exerted by Kabul on India to complete the Chabahar port work.

The port authorities say dredging will be complete soon and they will be ready to receive Indian cargo ships in a month’s time. The Iranians want India to show greater speed in acting on the agreement. Ambassador Abdolhamid Fekri, associated with a government think tank in Tehran, wondered why “Indian ships can’t come on a friendship trip to Chabahar and stamp their presence”. He may have a point there. In Tehran, too, the mere mention of Chabahar to a lay person elicits responses such as “India is building a port there”. At least now, in the minds of Iranians, there is a complete identification of Chabahar with India.

Gateway to Central Asia

On their part, Indians are cognisant of its strategic location and its potential for opening a route to Afghanistan and Central Asia. There have been two significant trips where the port has figured in discussions on investment and connectivity. During Prime Minister Narendra Modi’s trip to Tokyo last November, his Japanese counterpart, Shinzo Abe, agreed to help India with the Chabahar project. Both leaders directed their aides to hammer out a plan to fast-track the project. India wants Japanese investment and help in building the railway track between the port city and Zahedan. Both India and Japan see strategic convergence in Chabahar as it allows the landlocked countries of Central Asia to find a route away from ports that enjoy Chinese domination like Gwadar.

The presidents of Kyrgyzstan and Turkmenistan, during their visits to Delhi, were also promised access to this warm water port. From all standpoints, the Iranian port, located in the Oman Sea away from the turbulence of the Persian Sea region, has the potential to reorder old routes into new ties.

According to the managing director of the Chabahar free zone, Abdol Rahim Kurdi, the port is the best entry point to connect three continents: Asia, Europe and Africa. India has been conversing with Iran since 2003 about developing this port but, due to Western sanctions and ambivalence at the top, there has been slow progress.

In the last three years, Chabahar’s development has picked up.

Whereas, in the last 20 years, there were 1,800 companies registered in Chabahar, in just three years the figure has shot up by 60%. Similarly, there has been a spike in investment. Kurdi says that this change has been “happening daily”. There have been many queries from Indian companies from the steel, petrochemical and fertiliser sectors, but Indian businessmen are still exploring whether this would be the right time to invest as issues pertaining to financing remain tricky since the European banks have not eased up despite the signing of the P5+1 nuclear deal. Their fears are exacerbated by the triumph of Donald Trump in the US presidential elections. While many in Iran were expecting his win, what has caused some worry is the manner in which he has chosen to surround himself with officials who have taken a public position with their dislike for Iran. Some of them, including Trump himself, have promised to tear up the nuclear deal with Iran after they assume office. There is a lot of support for preserving the deal in the US, but it is unlikely that stability will visit Iran and Chabahar soon – from the standpoint of investors.

It is due to these reasons that India, too, has been progressing slowly. Some officials in the external affairs ministry feel that this sloth in executing its part of the project could be a strategic mistake. Iran has been dropping hints that it would explore investment from other countries, including China, which has made a gargantuan investment of $46 billion in the China-Pakistan Economic Corridor that originates from Gwadar. Iran had earlier staved off pressure from Beijing to invest in Chabahar as it wanted India to be present for strategic reasons. China has suggested a railway line between Gwadar and Chabahar. India will have to move swiftly to grab the opportunity that Iran is offering to not just explore the land route to Central Asia, but also connect with the trans-shipment road corridors that Iran is building to reach out to Europe. The International North-South Corridor is one of them.

Chabahar versus Gwadar

Chabahar in many ways is better than Gwadar. It is a deep water port that is connected to land and the mainland, which does not really involve charges for loading and unloading. It has two wharfs, Shahid Kalantri with a capability of 25,000 ton bunker and Shahid Beheshti with 40,000 bunkers to moor. It has access to human resources trained at Chabahar Maritime University with the necessary skills for running a world-class port. It has access to international waterways in the Indian Ocean and has moderate climate.

Chabahar free zone officials are quick to point out to companies that they are away from the crisis area of the Persian Gulf and their investment will remain safe. During the Iran-Iraq war, the Iranian government had used this port to locate much of its maritime resources. To reiterate, it is the best route to transfer goods to Afghanistan. It has off-coast facilities that are linked to the provinces of Sistan, Baluchistan, Kerman and Khorasan. Besides, due to its geographical location and its proximity to neighbouring countries (the Indian port of Mundra is 900-odd km away) which have great markets and political stability, the Chabahar free zone has enormous potential to host large industries through joint foreign and domestic investments.

There is a section in the Indian strategic community that is uncertain about the Chabahar foray as it fears that if the Taliban or a hostile power takes over Kabul, then all their investment would be lost. India has already invested $2 billion in Afghanistan and is unsure whether this investment can be protected or will give any dividends. All these conundrums are upsetting Modi’s plans to give shape to a regional foreign policy revolving around the key issue of side-stepping and isolating Pakistan.

This article first appeared on Hardnews.