Indian Prime Minister Narendra Modi, Afghan President Ashraf Ghani and Iranian President Hasan Rouhani met last Monday in Tehran to sign an agreement to kick-start the development of Chabahar port with the construction of two berths at a cost of $85 million over the course of 18 months. India is to make available a $500 million credit line extended by the Exim Bank of India for the first phase of construction at the port. India has also offered to supply $400 million worth of steel towards the construction of a rail link between Chabahar and Zahedan as a part of North-South Transport Corridor.
On this occasion, an MoU was also inked between India's state-owned National Aluminum Company and Iran's state owned IMIDRO to work on setting up a $2 billion aluminum smelting facility in Chabahar. An MoU was also signed for financing of the Chabahar-Zahedan railway link supported by Indian Railway's public sector unit Ircon International. The Indian side stated that the Indian companies see an investment potential of $15 billion in Chabahar Special Economic Zone in the areas of gas and urea plants and other industries. All these industries are fuel extensive and their feasibility is contingent upon Iran supplying low-cost natural gas to India. Iran and Afghanistan are the logical stake holders in the development of Chabahar port and rail links and all of them have their commercial and strategic interests tied up in the project. For India, the most feasible and reliable access to Afghanistan, Iran and Central Asia is the land route via Pakistan, but it sees this as a remote possibility happening in the near future on account of unresolved political issues between the two countries. India wants to move into the Central Asian markets while Iran needs investments and technology to catch up after moving out of decades of global isolation. Afghanistan, a land-locked country, considers this as an access to an alternate port as against the only available via Pakistan.
It has become obvious that India is seriously concerned with the establishment of the China Pakistan Economic Corridor (CPEC) and views this as a grave threat to its economic and strategic goals and influence in the Central Asia region and to its internal security as well. Some analysts view the May 2016 agreement on Chabahar between India, Iran and Afghanistan as a counter to the CPEC. There appears to be some truth in it. India has by now understood that the CPEC is there to stay and will move on irrespective of its resistance. India seeks to slow down the CPEC and move fast with its access to Central Asia, bypassing Pakistan-China with a view to having a lead in positioning itself in the region. India seems to be working hard towards both objectives; hence the urgency to speed up work at Chabahar port, the project on which it has been slow paddling since the 1990s and spent $100 million during 2005-09 on the construction of a roadway to achieve connectivity between port and northern Afghanistan.