Iran's President Hassan Rouhani delivers remarks at a news conference during the United Nations General Assembly in New York City, on September 20, 2017. Photo: Reuters / Stephanie Keith
Iran's President Hassan Rouhani delivers remarks at a news conference during the United Nations General Assembly in New York City, on September 20, 2017. Photo: Reuters / Stephanie Keith

Inaugurating Chabahar Port early this week, Iranian President Hassan Rouhani said he looked forward to “more engagement and unity” in the region, explaining, “We should go after positive competition. We welcome other ports in the region, we welcome Gwadar’s development.”

Achieved 15 years after the initial agreement in 2003, the Indo-Iranian project of Chabahar is often seen as a rival or competitor for Pakistan’s Gwadar Port, which is the main seaport of the flagship China-Pakistan Economic Corridor, the most important land route of Beijing’s Belt and Road Initiative.

Making efforts to dispel any illusions of an imminent rivalry between and Gwadar, Iran has tried to indicate that the two new ports will be complementary to each other, and the presence of Mir Hasil Khan Bizenjo, Pakistan’s minister for maritime affairs, as well as the chairman of Gwadar Port at the inauguration ceremony on Sunday conveyed as much.

Apparently, Iran has plans to export electricity to Gwadar and even has a memorandum of understanding with Pakistan for the further convergence of the two “sister” ports. As far as India is concerned, it is a dream come true, as it visualizes Chabahar as the gateway to a transit and transport corridor connecting India, Iran and Afghanistan.

Additionally, India intends to build a US$1.6 billion rail line to Zahedan in Iran, which can provide access to Central Asia. Having no common borders with Afghanistan, India could not get a trade route to it through Pakistan in the past because of friction between the two neighbors, so it has great expectations from the launching of Chabahar.

Countering Gwadar Port is India’s main goal. It lies less than 100 nautical miles from Chabahar, and India has plans to invest $500 million in the project and secure two berths there as well as develop economic zones later on. Increasing port capacity to 8 million metric tons of cargo from just 2.5 million tons a year, the new harbor extension is all set to facilitate the International North-South Transport Corridor (INSTC) to Russia as well.

Even though Iran currently faces stringent restrictions on any projects linked to its Islamic Revolutionary Guard Corps, Chabahar remains an exception, even though sanctions  were a hurdle in the past. Recently, US Secretary of State Rex Tillerson has been on the record saying that Washington would not block “legitimate” business activities with Iran by India as there was “no contradiction” between US sanctions on Iran and the Chabahar project.

Having dwelt on the main benefits from Chabahar, let’s take a short overview of Gwadar Port in Pakistan. To begin with, the port happens to be situated on a main trade route, and ships have direct access to it without having to venture into the Strait of Hormuz. Close proximity of the two ports also means that all of Chabahar’s traffic has to pass by Gwadar first.

Not only that, Gwadar’s natural layout and depth enable the largest ships to dock there, whereas both Chabahar and Dubai lack these advantages. Whereas the maximum planned capacity of Chabahar is 10 million to 12 million tons per annum, that of Gwadar will be 300 million to 400 million tons once it reaches complete capacity and it is also projected as a city of 2 million residents once it is ready. If things go according to plan and the port operates full capacity, Gwadar could outstrip all of India’s 212 ports that collectively handle 500 million tons a year.

Geopolitically, if we consider the possibility of instability in Baluchistan, one cannot ignore the fact that Chabahar is located in one of Iran’s most volatile regions, which was rocked by the Jundullah insurgency in recent years. One cannot forget the Shia-Sunni dimension either, as countries such as Saudi Arabia and the United Arab Emirates would prefer Gwadar over Chabahar considering the ongoing Yemen scenario and other matters.

As for Afghanistan using Chabahar, even that seems unlikely in the near future, as that country remains unstable and US forces are still required to maintain peace there.

Realistically, the fact remains that China’s trade is on such a scale that even if only China uses Gwadar Port in the beginning, it would equal all the trade with other countries combined.

Another future aspect is the $100 billion worth of energy deals Iran could have with China as well as the Iran-Pakistan gas-pipeline proposal, so naturally Iran sees Chabahar as complementing Gwadar, not competing with it.

Finally, any rivalry on the part of Iran’s Chabahar Port is still mainly speculative and all these plans are mainly on paper. The other side of the picture remains that Iran has also been expressing the wish to join the CPEC, thus Chabahar could even become part of that corridor further down the road.

Sabena Siddiqui

Foreign Affairs Journalist, Lawyer and geopolitical analyst. Writing about modern China, the Belt and Road Initiative, Middle East and South Asia. Bylines in Al-Monitor, The Diplomat, South China Morning Post and Asia Research Institute's Asia Dialogue Twitter @sabena_siddiqi

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