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Can Afghanistan benefit from Chabahar Port?

INDIA and Afghanistan appear to have a problem at hand with banking transactions for bilateral trade through Chabahar port despite the strategically located port kept out of the purview of US sanctions on Iran for the time being. Already, there was no shipment after the first shipment on 24th February 2019 for other reasons, and now after about three months at least 50 containers of Afghan goods ready to be exported through Chabahar Port for Indian and Chinese markets have been disrupted due to financial obstacles, according to Afghan Chamber of Commerce and Industry (ACCI). According to Bakhtar News Agency, export and import have taken place only once between India and Afghanistan since opening of the Chabahar port. Khanjan Alokozai, Deputy Director of the Chamber of Commerce and Industry while talking to media stated that there are still some problems with import-export trade through the Chabahar Port.

Afghanistan's products were exported to India through Nimroz province for the first time in the last week of February 2019, most of which were the products from the western provinces of Afghanistan. The reason is that fresh fruits are perishable and dried fruits the main item of Afghan exports have their season; secondly, the quantities of the products are small and cannot be exported through big ships to make it cost effective for the exporters. Hence, it is not possible to export merchandize to India consecutively through Chabahar Port. Likewise, he pointed out that a ship could carry between 6000 and 16,000 tons of goods, and exporters are obliged to pay for it. Obaidullah, Nimruz Head of the Chamber of Commerce and Industry says that there is no problem in Afghanistan's exporting to India through the Chabahar Port, but according to him, there are international problems on the Iranian seaway.

One way trade between Afghanistan and India continued through the Pakistani Wahga border, through which Afghan traders had some times faced problems vis-a-vis closure of the border for weeks after an attack by the Taliban on Afghan forces, or attack of banned TTP elements on Pakistan's border areas, rotting the perishable fruits that caused loss to the traders. Anyhow, landlocked Afghanistan had sent its first export shipment to India through Iran's strategic Chabahar Port. Afghan President Ashraf Ghani, who attended the special ceremony on February 24 in the western city of Zaranj to mark the event, said the exports through the Iranian port on the Indian Ocean would connect hundreds of villages and millions of Afghans to the outside world. But, that was a tall claim, as after the first shipment there is no second shipment after that so far.

India's objective to develop the strategically located Chabahar Port along with the one with Afghanistan on road and rail network was meant to counter China and Pakistan's alliance in South West Asia. However, the bigger questions of feasibility of logistical linkages remained unanswered. Like Pakistan and India, Iran too is competing for the Afghan market, its share in reconstruction opportunities and outreach to Central Asia. However, the road network and rail link vital to connect Chabahar to Central Asian States were capital intensive and time-consuming projects. The question is whether India will come forward in a big way like China has, especially in the wake of the US sanctions? In the case of China-Pakistan Economic Corridor, no such hiccups existed, and progress on Gwadar and CPEC is unstoppable. Secondly, the distances from Chabahar to Kabul and Central Asian Republics would entail prohibitive costs which Afghan traders have realized now.

Whereas some Pakistani analysts expressed concern over India's efforts to bypass Pakistan and to contain China, Chinese leadership remained well-composed. China Pakistan Economic Corridor is indeed part of a much bigger Chinese initiative known as 'One Belt One Road' (OBOR), which envisages new land and sea routes connecting China to Western Eurasia and East Africa. Many in India have been vocal in their opposition to China-Pakistan Economic Corridor (CPEC), which epitomizes the spirit and strength of Pakistan-China friendship and cooperation for regional peace, progress and prosperity. One Corridor and four dimensions pattern of cooperation was agreed by both sides for CPEC. The four key areas included Gwadar Port, Energy, Transportation Infrastructure and Industrial Cooperation. Initially, some US D 46 billion were estimated for CPEC. Of this $ 34 billion were envisaged for the energy sector, $6.1 billion for roads, $ 3.7 billion for rail network and $793 million for Gwadar Port.

In November 2018, the US State Department had exempted the Chabahar Port project from its sanctions on Iran in recognition of its importance to war-torn Afghanistan. In general, the US sanctions are intended to exert pressure on Iran to renegotiate its 2015 nuclear deal with world powers, from which President Donald Trump walked away in May 2018. In view of the brewing conflict between the US and Iran, the US may withdraw its exemption. An American aircraft-carrier strike group is steaming towards the Persian Gulf, joined by b-52 bombers, after unspecified threats from Iran. John Bolton, the National Security Adviser, says any attack on America or its allies will be met with unrelenting force. In Tehran, meanwhile, President Hassan Rouhani says Iran will no longer abide by the terms of the deal signed with America and other world powers, whereby it agreed to strict limits on its nuclear program in return for economic relief.
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Publication:Pakistan Observer (Islamabad, Pakistan)
Geographic Code:9PAKI
Date:May 18, 2019
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