Chabahar has been making a lot of headlines with India's route to Afghanistan via Iran set up to replace trade with Pakistan. A statement by Afghan Chief Executive Abdullah Abdullah went so far as to imply that Afghanistan is no longer dependent on Pakistan.
India's half a billion investment in not only the port at Chabahar but also roads and railway networks that allow it to access Central Asian countries along with Afghanistan does indicate Pakistan being edged out. Since Pakistan's trade with Afghanistan has decreased by about 40 percent in recent years, the bulk of which is snapped up India and Iran, it does seem to indicate that trade with Afghanistan is going to present more challenges with the inauguration of Chabahar port.
But there are two sides of the story: one facet poses the doom and gloom view of Chabahar port. Against the backdrop of political laziness, provincial rivalry and Pakistan's political posturing that results in frequent closure of Torkham, Chabahar port is welcomed by Afghanistan as a solution that bypasses Pakistan. Resultantly, Pakistan's current $1.1 billion exports to Afghanistan dwindle further at a time when the ballooning current deficit does not afford a drop in trade.
On the other hand is the question whether Chabahar port truly threatens Pakistan's trade with Afghanistan and the geo-political importance of Gwadar port. It is a simple economic equation that increases in volume decreases costs. Given China's international trade, if Gwadar is up and running with Chinese goods than its volume will far exceed that of Chabahar's port. Since Gwadar port is under Chinese management and blessings, and CPEC being a 'strategic' project fewer hurdles to trade are expected and the speed with which it is being developed supports this view (Read BR Research's "Gwadar: look and feel", published October 11, 2017).
The proponents of the view that Chabahar is not competition argue that transit trade is expected to shift to Gwadar. Connectivity, through roads being constructed, has improved and with CPEC driving the costs of shipping through Gwadar down, Pakistan will continue being the favoured route of transit trade.
However, as Babar Badat, the President of FIATA said in an interview with BR Research recently "security and political considerations far outweigh commercial considerations. Gwadar is not going to happen in the next week or next month. It will take 5-8 years for Gwadar to open and 5-8 years for it to flourish".
Even if Gwadar gets going in 3-4 years, Chabahar could get business in the meantime as, India may have strengthened its commercial presence and it would be an uphill task to win back that market. Also, even if CPEC drives down Gwadar rates, if Torkham continues to be closed at the drop of a hat, Pakistan will lose out on transit trade because exporters rather have the guarantee of their goods actually reaching their destination than arguably lower rates.
At the end, the question is not whether Chabahar port threatens Pakistan's trade with Afghanistan, but rather is Pakistan allowing it to become a threat. India's government support to local investors and its active efforts in facilitating its exporters has already started encroaching on Pakistan's formal trade. If Pakistan does not open up the east-west corridor, then it will be at its own risk. It is not the existence of alternate routes that is threat but rather Pakistan's own continued incompetency regarding trade with Afghanistan. And the day Pakistan allows the east-west corridor without any hurdles, the day Chabahar will considerably lose its shine.
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