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India has offered a counterweight to the Chinese initiative "Belt and road" – the Indian diplomat
Material posted: Publication date: 03-08-2018
India is showing a growing interest in transport projects in Eurasia. In 2016, India, Afghanistan and Iran signed a Trilateral transit agreement under which new Delhi is funding the construction of the port in the Iranian Chahbahar. Some Indian commentators are already calling it a response to the Chinese initiative of "One belt and one road". According to the expert of the Institute for defence studies and analyses (new Delhi) Funuke Stobdan, Chahbahar will give India the opportunity to enter the Eurasian markets, but also has the potential to become a gateway to Central Asia. The Indian diplomat told the "Eurasia.Expert" about the plans of India for development of transport infrastructure in Central Asia, as well as on specific joint projects new Delhi, and the countries of the region in the field of transport and logistics.

- Mr. Stobdan, what characterized the policy of India in the Eurasian region at the present stage? What areas for investment and joint ventures are seen as the key?

- The policy of India towards Eurasia is related to its political interests in Afghanistan and economic interests in Russia and Central Asia.

Commissioning of the port of Chahbahar in Iran has become a strategic "tipping point" for India. India has already shipped 1.1 million tons of wheat to Afghanistan through this port.

With enthusiasm and was met with the commissioning of the first phase of the terminal in the Shahid Beheshti port Chahbahar in Iran on 3 December 2017, the Reviewers in India have called Chahbahar Indian counterweight to the Pakistani port of Gwadar and Chinese initiative "One belt and one road". The port will allow India to finally come out on the Eurasian markets.

Commissioner of Central excise and customs Council (DATS) of India said that through the ITC "North – South" after almost 15 years of waiting in 2018 will be resumed transportation of Indian goods.

This will allow India to soon send the first batch of products in the path length of 7.2 thousand km in Russia or Turkey via Iran.

It is expected that the corridor will allow to reduce by half the time and cost of transporting goods, and thus will contribute to the growth of Russian-Indian trade from the current $6 billion to $30 billion over the next 10 years.

When the head of the dates the statements were made, India was preparing to officially become a member of the TIR Convention (Customs Convention on the international transport of goods under cover of TIR Carnets). India signed the agreement on 15 June 2017, 15 December 2017, the TIR Convention entered into force for India.

- Why for the construction of the port of India chose the Iranian city of Chahbahar? What opportunities will open with the introduction port into operation?

Iran is without a doubt an ideal transit country for India, the gateway to Central Asia and Russia as it provides access to a large number of commercial corridors, existing and planned. Chahbahar is an attractive opportunity for India, given Iran's interests in the construction of the port as a trading hub. This is the only Iranian port to the Indian ocean.

In Chahbahar there are two terminals: Shahid Kalantari & Shahid Beheshti. Through the first terminal is about 2.1 million tons of cargo per year, and with the commissioning of the terminal of Shahid Beheshti volumes will increase to 10 million tonnes, Iran Recently imported cranes from Germany to dock at the terminal of Shahid Beheshti. The cost of the German cranes and equipment is estimated at $85 million, and the terminal was built with Indian investment. Shortly after in January 2016. entered into a Joint comprehensive plan of action (SVPD) and Iran was the sanctions, India has opened the country a credit line of $500 million for the early development of the port.

Chinese company Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC) is going to put four of the reloading crane to service the large container ships in the first berth with a capacity of 8.5 million t of Course, in the future will add more berths to increase the capacity of the port to 82 to 85 million tonnes.

The trilateral transit agreement 2016 (between India, Afghanistan and Iran) imposes on India the responsibility to build and Commission the port in Chahbahar (two terminals with five berths), and also for 10 years to lead the design and handling of goods. The agreement provides a legal framework for the transportation of goods to Afghanistan.

According to some estimates, with the commissioning of the port of Chahbahar and MTK "North – South" trade turnover between India and Eurasia could grow to $170 billion ($60,6 billion exports, $107,4 billion and import).

With the commissioning of the terminal of Shahid Beheshti offers the prospect to increase operational and practical significance of Chahbahar. It can be vital gates and the shortest route by land to Central Asia. However, the further construction of multi-purpose terminal in Chahbahar, including the plans of India for the construction of a 610 km long railway track from Chahbahar in Zahedan, cannot be realized, if any Central Asian state (except Afghanistan) will not become an interested party in the construction of the port.

- What is today the trade turnover between India and Central Asia? What are the interests of India in the region?

At the moment, the establishment of relations with Afghanistan is very important for India, given its task to show a strategic commitment to Afghanistan. But that route was economically viable, it becomes necessary to reach Central Asia, as this region contains the largest reserves of minerals, including uranium, copper, titanium, yellow phosphorus, iron ore, propane, butane, coal, etc. for Example, only one Kazakhstan wants to increase non-oil exports by 50% by 2025, And no direct transport links India will not be able to access the resources of Central Asia necessary for producing economy of India.

Today India's trade with Central Asia is minimal and is slightly more than $1 billion, showing no growth. The volume of trade with the region amounts to only 0.11 percent of the total trade of India. Similarly, trade with India is around 1% of trade in Central Asia. Trade relations with the region can be strengthened only basis transportation.

For non land-locked countries of Central Asia Chahbahar now will become the shortest land route of delivery for shipping. Before that, they relied on the ports of Turkey, Russia, the Baltics, Iran (Bandar Abbas) and China. Until recently, the only Kazakh operators have expressed interest in building a terminal in Mundra (Gujarat). However, with the opening of the port of Chahbahar Uzbekistan has expressed interest in direct access to the Indian ocean, signed a deal with Afghan Railways just two days after the opening of the terminal of Shahid Beheshti.

- You mentioned about Uzbekistan, its role in the development of transport infrastructure in Central Asia?

- In 2011, the Uzbek state railway company "Uzbekiston Temir Yullari" has built a short 75-kilometer stretch of road between Hairatan (a town on the Uzbek-Afghan border) and the Afghan city of Mazar-e-Sharif $1.5 billion the Investor, the Asian development Bank. Uzbekistan wanted to extend the site to other areas of Afghanistan. However, the main obstacle to linking Northern Afghanistan with the provinces of Parwan and Kabul is the Salang pass.

At the same time plan for the extension of the railway line (about 700 km) from Mazar-e-Sharif via Shibergan, andkhoi and Maimana to Herat in Western Afghanistan discussed the "Uzbekiston Temir Yullari" and Afghan Railways. The agreement on the construction of the railway line was signed by the President of Uzbekistan Shavkat Mirzieev and Afghanistan President Ashraf Ghani December 5.

Herat is the gateway to Iran, and when the draft of the TRANS-Afghan transport corridor is completed, this will allow to Afghanistan and Uzbekistan to establish a direct link with the sea ports and to transport cargo through the port of Chahbahar.

Against this background, India needs to look at the strategic role Chaharsou port. It can combine the ITC "North – South" and planned transit corridor to Central Asia from Chahbahar in a single transport network.

Corridor Chahbahar – Iranshahr – Zahedan – Mashhad is the ideal route to reach Sarakhs (city on the border with Turkmenistan). India has already committed for the construction of a railroad from Chahbahar to Zahedan.

Port Chahbahar can connect with ITC "North – South" if the existing line will be extended to Mashhad. Branch Chahbahar – Iranshahr – Zahedan – Mashhad can be connected to an existing rail line that connects other parts of Central Asia. Similarly, this route can be embedded in other multilateral transport initiatives in the region, such as TRACECA Programme regional economic cooperation in Central Asia, etc.

India could settle the issues of communication with Central Asia through bilateral and multilateral mechanisms. To date, India has constructed 218-km road from Delaram in Afghanistan to Zaranj on the Afghan-Iranian border.

- What transportation projects India is implementing in Eurasia?

- When it comes to Eurasia, the important role container shipping. India has become competitive in the Eurasian transport system, the active participation in the transport projects.

The approach India should not be restricted by increased trade, it needs to be aimed at increasing investment and establishing linkages between sources of raw materials, production centers and markets in India and Eurasia.

For example, the agreement on FTA between India and the Eurasian economic Union could be an incentive for the unfettered movement of raw materials and inflow of capital and technology across new industrial infrastructure, as well as Chahbahar and ITC "North – South".

The decision of India to join Ashgabat agreement, aimed at building a multimodal international transport and transit corridor for transporting goods between Central Asia and the Persian Gulf – is a step in the right direction.

As already mentioned, on 15 December 2017 to India came into force, the TIR Convention used in international transport of goods. This greatly benefits the economy, reducing administrative and financial burden, because instead of getting national guarantees in each country of transit (which is quite expensive) one is enough international interest.

Transport under the TIR Convention have become even faster and more productive thanks to the free web platform TIR-EPD applications in 18 languages, allowing transport operators to send preliminary information on the goods transported under the customs Convention. This system provides access to real-time, online monitoring, flexible guarantee. Central Asian countries are already members of the TIR Convention.

All these initiatives along with the opening of the port of Chahbahar should spur the enthusiasm of Indian companies and increase their interest in MTK in Eurasia. But more importantly, Chahbahar will make Afghanistan a major transportation hub in the region, a bridge connecting the Indian ocean and Central Asia.

Afghanistan has common borders with Uzbekistan (137 km), Turkmenistan (744 km) and Tajikistan (1206 km). However, the level of trade between these countries remains low due to poor transport infrastructure. The construction of the railroad will allow Afghanistan to become a bridge for the integration of the Central Asian region in the global market. According to estimates by the Asian development Bank, improving transport links between Central Asia and Afghanistan could increase goods turnover in the region of $12 billion.

- What are the challenges India still needs to do in Central Asia?

In the next phase, India will have to engage one or more countries in Central Asia, preferably Uzbekistan and Kazakhstan, Chahari the project, this objective can also be realized within the framework of the SCO. In addition, India needs to focus on the following priority areas:

• implementation of operational controls Chahbahar;

• establishing regular and frequent communication between the ports in India (Mandra, Kandla and Mumbai) and Chahara;

• future expansion of the railway Chahbahar – Zahedan – Mashhad to Herat in Afghanistan;

• to consider participation at the Uzbek-Afghan initiative connecting Mazar-e-Sharif to Herat (According to officials "Uzbekiston Temir Yullari", the company has the opportunity to build a 100 km railway line every 8 months. The project cost is estimated at approximately $2 billion).

Early implementation of TRANS-Afghan railway corridor connecting Chahbahar and Central Asia could become a major breakthrough in the field of transport in Asia and have tremendous implications for the region, spurring the economy and ensuring political stability.


Tags: India

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