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Chabahar port hopeful to rekindle Afghanistan’s untapped economic potential

The Economic Times

Chabahar port, a transport corridor and a gateway for Afghanistan to remove trade barriers raise lot of hope to expand its economic horizon across the globe and beyond and more significantly, Iran has offered India for management rights for Phase-1 of Chabahar Port in December last year.

The Chabahar port project is hopeful in creating robust connectivity for landlocked Afghanistan. Giving an impetus for enhanced trade and transit opportunities, Iran-Afghanistan-India can exercise economic potential and viability across the region. Chabahar port will add a new dimension in the bilateral cooperation with India-Iran-Afghanistan. The trilateral pact signed between India-Iran-Afghanistan in 2016 gave clear indication of prioritizing economic engagement in bringing prosperity and engineering trade relations in the region. Regional cooperation is the key for development and growth. There are immense investment opportunities available in this zone that will not only enhance business and trade between India-Iran and Afghanistan but also connecting to other regions of the world.

To update the progress of Chabahar port, a seminar titled ‘Chabahar Port and International Corridors & Investment Opportunities in Islamic Republic of Iran’ was held in New Delhi, organized by Confederation of Indian Industry (CII). Nitin Gadkari, Minister of Shipping, Road Transport and Highways, Water Resources, River Development and Ganga Rejuvenation held bilateral talks with Dr Abbas Akhoundi, Iranian Minister of Roads and Urban Development. The business seminar highlighted the opportunities for trade and investment opportunities in Chabahar port.

The first phase of Chabahar port was completed in December last year as per the development plan for the five phase of the transit corridor. Chabahar port hopeful to rekindle Afghanistan’s untapped economic potential. USD 350 million is the expenditure for Chabahar port. The transport corridor has the capacity of 82 million tonnes. Iran-India-Afghanistan have ratified the agreement for the Chabahar port and all the road and rail roads need to be identified for the better connectivity to Afghanistan markets. Initially there were some concerns related to the procurement of equipment for the transit corridor which was due to finance related issues with the stakeholders and not logistics. The concerns have been sorted out and the three countries look forward for the completion of the project.

Followed with the signing of the trilateral agreement between the three countries, India sent 1.1 million tonnes of wheat to Afghanistan on grant basis in October 2016 and it is expected that by January 2018 more wheat shipments will be sent to Afghanistan.

The prevailing security challenges in Afghanistan have obstructed the growth and development for decades, however, the country has not loosened its grip and a continuous effort is on to bring peace and prosperity. The Chabahar port has set lot of expectations for Afghanistan in expanding trade, attract investment, build infrastructure, and create jobs opportunities. Improving economic dimension of Afghanistan will relatively curb terrorism and people can look forward for peace and prosperity for all. Connectivity plays a substantial role in the region and especially Afghanistan has virgin market for mineral resources.

Chabahar is planned to be linked with Delaram-Zaranj road (built by India in Afghanistan & connects at Afghan-Iran border) via rail through Zahedan in Iran. As per Afghanistan National Railway Plan (ANRP) India’s proposed 3000km national railway project which is planned to be carried out by 2020 is yet to materalise which is crucial for Afghanistan in connecting with railway network inside and outside the region.

Connectivity in Afghanistan can boost the untapped potential in increasing trade with India, Central Asia and the other regions of the world. Thus the Chabahar agreement represents major milestones in the new era of enhanced connectivity for Afghanistan. Afghanistan provides the shortest and most effective routes for roads and railways between South and Central Asia which is not only an important constituent for economic integration but at the same time it takes sustainable growth and economic development to new highs. Enhanced regional connectivity and trade can contribute immensely in creating new job opportunities in both rural and urban communities across the region.

Afghanistan has untapped mineral and petroleum resources. For many minerals, the resources that have been identified are globally significant with known and potential deposits of a wide variety of minerals ranging from copper, iron, and sulfur to bauxite, lithium, and rare-earth elements. An estimate of reserves is of US$ three trillion dollars.

Afghanistan is known to have exploited its precious and semi-precious gemstone deposits since ancient times. These deposits include aquamarine, emerald, fluorite, garnet, kunzite, ruby, sapphire, lapis lazuli, topaz, tourmaline, and varieties of quartz. The Chabahar port vision is a shared commitment to promote increase regional trade and transit, and foster a network of linkages throughout the region. The connectivity through Chabahar port will help Afghanistan and its neighbors maximize the value of natural resources, build human capacity, create jobs, generate revenue to pay for needed services, and capitalize on the region’s economic potential.

As trade is the driving force in boosting economic growth of a country, enhancing regional connectivity through Chabahar port would provide the eco-system for the private sector to seize the business opportunities emerging due to substantial reduction of logistic costs for trade among the three countries.

Chabahar port is committed for the development of Afghanistan, India and Iran. Chabahar port can be a game changer. It has got free trade zone with a strategic geographical location and proximity to India creating immense potential for transit cargo for conducting business with all nations.

Chabahar port project initializes a new strategic partnership between India-Afghanistan and Iran for the development of the region through joint cooperation utilizing regional opportunities. Chabahar port is crucial for Afghanistan as it will change the dynamics of the geopolitics in the region in the years to come. The Chabahar port is likely to be completed by the end of 2020.