Modi Ties India-Backed Iranian Port to Central Asia’s Fortunes
(Bloomberg) -- Central Asian countries could unlock their vast economic potential by connecting with the India-backed Chabahar port in Iran, Prime Minister Narendra Modi said, making a case for his country to push for stronger trade links in a region that has seen investments pouring in from China.
The Chabahar port, which took years to build, was supposed to open up an important route to connect Afghanistan to Central Asia while bypassing India’s main rival, Pakistan. With the Taliban in power, the port could face a more difficult operating environment although the militant group has said it wanted continue economic and political ties with India.
Modi, who was addressing the Shanghai Cooperation Organization, or SCO, -- a meeting of leaders from countries who are mostly neighbors of Afghanistan, said Central Asian countries would benefit from connecting with India’s vast market.
“Central Asia’s vast economic potential has remained untapped because of radicalization and extremism,” Modi said in a speech delivered via video link at the SCO meeting in Tajikistan. “If the region wants to benefit from fossil fuels or intra-SCO trade, we will need to lay more emphasis on connectivity.”
Afghanistan was among the issues discussed by the SCO leaders on Thursday and Friday at Tajikistan’s capital of Dushanbe. The eight-member bloc includes India, China and Pakistan while Afghanistan is not a member.
Keeping Chabahar port going has been a concern for India as it faces competition from China for influence in the region. Beijing has invested heavily in the port of Gwadar in Pakistan, some 100 kilometers (62 miles) to the east across Iran’s border with Pakistan.
The Taliban declined to join talks with India, Iran and Uzbekistan on the Chabahar port and the North-South Transport Corridor, according to news reports, fueling some uncertainty over its future as Afghanistan is a crucial link in the 7,200-kilometer route.
India has backed the North-South corridor, which includes highways and railways connecting Chabahar in Iran with Russia that will cut time taken by shipments between Europe and central Asian markets. Earlier this year, New Delhi proposed the India-Uzbekistan-Iran-Afghanistan Quadrilateral Working Group to discuss shared use of the Chabahar port.
These projects now face delays and may have a part to play in India missing its target to boost overall merchandise exports by $400 billion in the 2021-2022 calender year. India’s trade with the entire Central Asia region including Russia was just $16.1 billion in 2020, just 2% of of its its total annual volumes.
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