India and Iran have many shared interests in Afghanistan. Both fear the adverse impact of prolonged instability and war in Afghanistan on their security interests. They also have concerns Iabout the growth of Pakistan’s influence in Afghanistan and about the Taliban becoming a dominant force there, which could have negative repercussions on their interests in Afghanistan.

For India, Iran’s strategic location makes it a viable transit point to Afghanistan and Central Asia. Iran is at the crossroads of some important international transportation corridors, such as the North-South corridor, the East-West corridor (old Silk Road), the Transport Corridor Europe-Caucasus Asia (TRACECA) programme, the Asia Land Transportation Infrastructure Development (ALTID), and South Asia. Both countries have been working on completing these projects to realise Iran’s transit potential.

The Chabahar Port is one such project that has assumed significant economic and strategic importance in recent times. Located on the Makran Coast off Southeast Iran, the Chabahar Port provides Iran with direct access to the Indian Ocean. It is closer to Mumbai and Karachi than Bandar Abbas, the other main port in Iran, and the development of the port at Chabahar would reduce some of the pressure on Bandar Abbas as well as potentially the cost of transportation to the eastern parts of Iran, Afghanistan and Central Asia. Moreover, the fact that Chabahar, unlike Bandar Abbas, is located beyond the Straits of Hormuz adds to its significance. In a scenario where the Straits of Hormuz are shut down, trade and commercial activities at Chabahar will remain unaffected.

India has been supportive of the development of the Chabahar port, pledging to commit as much as US$ 100 million in May 2013 towards the upgradation of the port. It has also funded, or considered funding, a number of other projects that could enhance the connectivity of the port. From India’s perspective, the Chabahar Port would improve New Delhi’s access to Afghanistan and the Central Asian Republics (CARs). India has, in fact, already used the Chabahar Port for facilitating trade with Afghanistan. In March 2012, India used the port for the first time to transport 100,000 metric tons of 2 wheat to Afghanistan as part of its humanitarian aid. In September 2013, India received its first batch of commodities–20 containers of dry fruits–from Afghanistan through the Chabahar Port.

This report seeks to examine the significance of the Chabahar Port for India, as well as some of the constraints and challenges that lie ahead for India in this regard. This brief is divided into four parts. The first part will look at the importance of Chabahar for Iran and some of the steps taken by Tehran to develop the port. The second part will examine Indian plans of developing the port and other infrastructure that enhances its connectivity with Afghanistan and Central Asia. This will be followed by an examination of the factors that have led the Chabahar Port to assume an important position in India’s strategic calculus. Finally, this brief will conclude with some of the constraints and challenges that lie ahead for India in this regard.