Historic pact signed with Iran. Now comes the real work

India and Iran may have finally inked the "historic" pact for the development of the strategically significant Chabahar Port nestled in Iran’s south-eastern Sistan and Baluchestan province on May 23. However, now that it has signed the contract, New Delhi will need to ensure that it executes the project that’s been in the pipeline for long without further ado.

Coupled with the agreement to establish a Trilateral Transport and Transit Corridor between India, Iran and Afghanistan to develop Chabahar-Zahedan-Zaranj as a transit corridor, it’s clear that New Delhi is all set to give a fresh thrust to its efforts at regional connectivity.

Indeed, Prime Minister Narendra Modi during his on-going Iran visit went so far as to describe the trilateral pact as something that can "alter the course of history of this region".

Chabahar, located on the Gulf of Oman, promises India access to not just landlocked Afghanistan but to resource-rich Central Asia, Russia and even Europe. The Chabahar contract will see the development and operation of two terminals and five berths with cargo handling capacities for ten years in the port located on Gulf of Oman. The trilateral pact, among other things, envisages a 500km rail link between Chabahar-Zahedan-Zaranj.

India has committed to spending $500 million on the Chabahar project. Besides, it’s also eyeing Chabahar free trade zone as a viable option for investment by its industries in urea, aluminium smelter, etc.

The trilateral pact is being seen by New Delhi as a "game changer for regional connectivity", especially for Afghanistan. Having long sought an alternative route to Afghanistan with whom India has close ties, the sea-rail link to the landlocked country, with Chabahar as the hub, is expected to give a fillip to trade and economic ties between New Delhi and Kabul.

Connectivity under the trilateral pact is, in turn, expected to lend an impetus to the proposed North-South Transport Corridor which envisages linking Europe to South Asia.

There is much at stake for India in the successful and swift execution of these connectivity projects as it seeks not just to reboot bilateral ties with Tehran but also press ahead with its aim to enhance regional connectivity.

In recent years, New Delhi despite maintaining close ties with Iran, even as it battled international isolation and economic sanctions in the wake of its nuclear programme, did find the going tough. For instance, India continued to import oil from Iran, the imports dipped and making payments became difficult. Payments are an issue that India is still working to resolve.

Iranian President Hassan Rouhani, perhaps, while speaking about Chabahar summed it up best when he said that the port can "turn into a very big symbol of cooperation between the two great countries of Iran and India".

For India too, participation in the Chabahar project will, of course, indicate its commitment to its own strategic and economic interests in the region. More importantly, it will also be a reiteration of its centuries-old ties with Iran.

PM Modi wasn't wrong in saying: "Our dosti [friendship] is as old as history," when recalling the age-old ties between the two countries. However, this dosti will need to be nourished now that sanctions against it have been lifted following the nuclear deal.

As India seeks to step up its engagement with Iran, which is emerging from the cold, Chabahar will be an important cog in the wheel in the years to come. Connectivity is of import here for India as its participation in the development of Chabahar will enable it to altogether bypass Pakistan, and use it as a regional hub to develop trade and economic links with countries in the region.

Significantly, Chabahar is located a mere 80km away from Pakistan's Gwadar port which has been developed with Chinese assistance. Gwadar's development is also an important part of the $46 billion China-Pakistan economic corridor - a project about which India has already raised its concerns.

That India is seeking to not just sidestep Pakistan for access to Afghanistan and beyond, and also have a counter to Gwadar in Chabahar, is something that's not gone unnoticed by the Iranian press. It appears to have noted with glee the fact that India's decision to invest in Chabahar is to counter Chinese moves in Central Asia and the move will set the alarm bells ringing in Beijing and Islamabad.

But it’s precisely why India needs to push ahead with its objective of finding ways to "connect" with its extended neighbourhood.