Chabahar set to take on Gwadar in fight for traffic on South Asian sea route

The prospect of a new strategic sea route connecting Iran, India and Afghanistan  came one step closer to realisation this week when the Iranian President Hassan Rouhani inaugurated the first phase of the $500m redevelopment of the port of Chabahar on the Sea of Oman. The new route is expected to boost trade between the three countries  while bypassing Pakistan and Chabahar is now set to  compete with the Chinese-backed Pakistani port of Gwadar at the southern end of the China-Pakikstan Economic Corridor (CPEC).
The inauguration follows the signing of an agreement in May last year between India, Afghanistan and Iran under the terms of which India agreed  to equip and operate two berths in Phase 1 of the Iranian port’s development with a capital investment of $85m and a further $230m on a 10-year lease. The route is in fact already in use; last month India sent its first consignment of wheat to Afghanistan via  Chabahar port.
Both Chabahar and Gwadar are situated on the very north-eastern edge of the Indian Ocean close to the Strait of Hormuz shipping lane and, with Asian demand for oil and gas from the Middle East steadily increasing, their strategic and economic importance is growing at an equal pace. It remains to be seen if future volumes of trade can support both of them.
Despite the potential threat that Chabahar poses to its multi-billion dollar investment in Gwadar, China has responded diplomatically to the Indian-Iranian initiative. “We welcome the development of friendly relations relations between the regional countries,” foreign ministry spokesman Geng Shuang said. “We hope the relevant cooperation can be conducive to maintaining regional peace and promoting regional stability and prosperity.” 

Source: indiatimes