India, Afghanistan and Iran Sign Deal for Transport Corridor

India, Afghanistan and Iran Sign Deal for Transport Corridor ...
wsj.com 23/05/2016 News

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Iran’s Chabahar port will be focal point of trade route that bypasses Pakistan
Afghan President Ashraf Ghani, center, arrives at a news conference with Iranian President Hassan Rouhani, left, and Indian Prime Minister Narendra Modi in Tehran on Monday after signing a three-way transit agreement. Photo: Agence France-Presse/Getty Images

* * * By Niharika Mandhana
May 23, 2016 1:01 p.m. ET
NEW DELHI—Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani signed an agreement with Tehran on Monday for a transport corridor designed to open up a new route to Afghanistan via the Iranian port of Chabahar, circumventing Pakistan.
Chabahar port, which India will partially develop just across the border from Pakistan’s Chinese-run Gwadar port, is the centerpiece of the corridor. India and Iran on Monday signed an agreement in Tehran that allows New Delhi to begin work on Chabahar after a delay of more than a decade.
“To carve out new routes for peace and prosperity is our common goal,” Mr. Modi said. “Afghanistan will get an assured, effective and a more friendly route to trade with the rest of the world,” he said, in a veiled criticism of Pakistan, with whom both countries share turbulent ties and whose location in between them has stymied trade.
Mr. Modi said the deal could “alter the course of history of this region” and help India, Afghanistan and Iran “to eventually build what we all desire and deserve—a friendly and healthy neighborhood.”
The agreements come as Beijing is building a $46 billion economic corridor with Gwadar as its focal point, potentially redrawing the region’s geopolitical map. India opposes construction of part of that corridor in an area of the disputed Kashmir region that is governed by Pakistan but claimed by India.
While Pakistan’s relations with the U.S. and Afghanistan have grown strained, its ties with China remain strong, raising hackles in New Delhi, where Gwadar is seen as a symbol of that partnership.
“Today, the nature of global engagement requires an attitude more suitable to this century, not the mindset of the century gone by,” Mr. Modi said, echoing a statement he made on a 2014 visit to Japan where he criticized some countries’ “expansionist mindset.” “Today, the watchwords of international ties are trust, not suspicion; cooperation, not dominance; inclusivity, not exclusion,” he said Monday.
While China is building and will run Gwadar, India’s engagement in Chabahar is much smaller. Under the deal with Iran, New Delhi will invest $200 million to develop two terminals and five berths at Chabahar, India’s Foreign Ministry said.
An additional $300 million would be available for the port and development of related infrastructure, according to a statement from Mr. Modi. Iran is also seeking investment from other nations to fully develop the port.
“There is no comparison in scale and intent between China’s role in Gwadar and India’s in Chabahar,” said Radha Kumar, director general of the Delhi Policy Group. “But that doesn’t take away from the fact that this is important for India and for Afghanistan, whose economic stability in turn is very important to India.”
Islamabad says Chabahar and Gwadar will complement each other rather than compete. Prime Minister Nawaz Sharif said last year that the two would be “sister ports.”
The corridor from Chabahar will run to Zaranj, an Afghan border town already connected by a 135-mile, Indian-built highway to Delaram, to the northeast. Development of the route is expected to strengthen ties between New Delhi and Kabul—a source of concern in Islamabad, which fears being encircled by India.
India provides millions of dollars in aid to Afghanistan. Mr. Modi inaugurated Kabul’s new Parliament building in December, which India built at a cost of $90 million. The Chabahar investment has been pending for years, in part owing to U.S. sanctions against Iran over its nuclear program, many of which were lifted earlier this year.
Like China, which is looking to boost transport and trade ties through its new “silk road,” India too has emphasized regional connectivity as Mr. Modi seeks to boost the country’s economy. It has moved forward on a deal to facilitate the movement of goods, vehicles and people across borders between Bangladesh, Bhutan, India and Nepal.
New Delhi is also a part of the International North-South Transport Corridor, which seeks to link India, Iran, Central Asia and Russia. Dry runs in recent years have helped to identify bottlenecks, bringing the delayed project closer to being completed.
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