US may not issue waiver for Chabahar port project

What is Important?
UPSC perspective:
Prelims:Location
Mains:Significance
Non-UPSC perspective:Location


Why in News?

As India, Iran and Afghanistan pledged to “fully operationalise” the Chabahar port agreement for trade between them at the earliest, a former US special envoy for the region warned that the US may not issue a waiver for the project ahead of the sanctions deadline next month.

Location:

Chabahar Port is a seaport in Chabahar located in southeastern Iran, on the Gulf of Oman. It serves as Iran's only oceanic port, and consists of two separate ports named Shahid Kalantari and Shahid Beheshti, each of which has five berths.The port gives access to the energy-rich Persian Gulf nations’ southern coast and India can bypass Pakistan with the Chabahar port becoming functional.

Objectives:

*India, Afghanistan, and Iran held their first trilateral meeting on the Chabahar port project during which they reviewed its implementation.
*In May 2016, India, Iran, and Afghanistan had signed a pact which entailed the establishment of a transit and transport corridor among the three countries using Chabahar Port as one of the regional hubs.

Significance

Despite the strategic import of Chabahar for India, there has been very little progress on it for the following reasons:
*Iran’s unenthusiastic support for the project. Although the idea was first mooted in 2003, it was only in 2012 on the sidelines of the 16th Non-Aligned Movement Summit in Tehran that Iran conceded to set up a joint working group to operationalize the port project as part of the trilateral cooperation agreement between Afghanistan, India and Iran on investment cooperation, trade and transit.
*A key factor behind Iran’s reluctance to allow an Indian presence at Chabahar was the opposition by the Army of the Guardians of the Islamic Revolution (the so-called Revolutionary Guards), which reportedly uses the port to ship arms to Yemen and militant groups in the region.
*Its strategic significance notwithstanding, the economic viability of the project is suspect. India, which has had trouble raising funds for the project, has so far been able to invest only $85 million to build a couple of berths. While India recently indicated that it was willing to invest up to $20 billion—one of its largest overseas ventures—to develop the port, petrochemical and fertilizer plants in the Chabahar SEZ, it remains to be seen if it can raise the funds.
*Also, given the presence of Gwadar next door, where China has already invested over $1 billion and committed another $46 billion for the 3,000-km long economic corridor to link Gwadar to Kashgar in Xinjiang province and its One Belt, One Road project, it is unclear whether the Chabahar route will generate enough trade and traffic to justify the investment. Besides, so far the project moved slowly because of western sanctions against Iran.

Developments so far:

*In May 2015, India inked a memorandum of understanding to develop the Chabahar Port. As per the MoU, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of USD 85.21 million and annual revenue expenditure of USD 22.95 million on a ten year lease. Ownership of equipment will be transferred to Iranian side on completion of 10 year period or for an extended period, based on mutual agreement.
*The Union Cabinet, in February 2016, gave its approval to the proposal of the Ministry of Shipping for provision and operationalization of credit of 150 million USD from EXIM Bank for development of Chabahar Port in Iran.






US may not issue waiver for Chabahar port project US may not issue waiver for Chabahar port project Reviewed by The Hindu Current Affairs on October 25, 2018 Rating: 5

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