By Krzysztof Iwanek
July 20, 2020
Over the past few days, various media outlets have been suggesting that Iran and China will sign a “megadeal” and that, as if by corollary, India will be excluded from the Chabahar port development project. These news stories are less convincing, however, when we break them into pieces. On closer inspection, these reports turn out to be typical media hype and attempts to connect the dots of facts with blurry lines of causation. In reality, neither the Iran-China megadeal is confirmed, nor is there any evidence that India will be left out of the Chabahar port project.
Firstly, the currently reported Iran-China deal should be treated as unconfirmed until officially announced. It was first reported in 2019 by a shady portal of little credibility — Petroleum Economist — and only by it. It is only recently that the deal has been described in a reputed outlet, the New York Times, but the article it published also does not offer any way to corroborate its claims.
The amount of Chinese investment to Iran which was supposedly envisaged in this “megadeal” — $400 billion — appears to be bloated and is not to be blindly trusted either. Even given that the promised sum is to be gradually transferred over 25 years, it would have meant a massive financial commitment by Beijing and a vast multiplication of what China has invested in Iran over the past year — China’s investment in Iran has actually been very modest in the recent past. Most importantly, to date, the deal has not been announced by either Beijing or Tehran. Even when it is, one should patiently watch how it will be put into effect, and this may take years.
Secondly, there is no proof so far that the fate of the Chabahar port development project is in any way dependent on that “megadeal.” Chabahar is a town in southeast Iran, and the initiative to enlarge the city’s port and its nearby infrastructure is a joint effort of India, Iran and Afghanistan. The gossip about Tehran’s “megadeal” with Beijing offers hardly any concrete details, and the Chabahar project is not an element which has been mentioned in this context so far.
However, when NYT broke the story of the deal on July 11, its shockwave was closely followed by another one: in the next few days, certain news outlets reported that India will be excluded from the Chabahar port project. Once again, no verifiable source for this information is at hand. Certain Indian media, such as WION, The Quint or The Hindu were quick to connect the dots — if only with a blurry line — putting the exclusion next to the megadeal within the same texts. While this has not been stated openly, such articles suggest causation, as if the promise of massive Chinese investment in Iran could have affected an Indian project realized in the Islamic republic.
Thirdly, a look beyond the screaming headlines reveals that even according to these media reports India is to be excluded from the Chabahar rail project, not the Chabahar port development project as a whole. The former envisaged construction of a railway track from Chabahar to Zahedan, an Iranian town close to the border with Afghanistan. As one of the objectives of the Chabahar project is an enhancement of Afghanistan’s connectivity with Iran — and through it with the world — the railway line is certainly a significant aspect of the entire initiative, but not the only one. Leaving Indian entities out of the railway line development would not imply that New Delhi would lose its role in the entire Chabahar project. As the news outlets have also admitted that the exclusion of India from the railway line construction is supposed to be due to its slow progress — as New Delhi was reportedly not wiring the money fast enough — they were actually confirming that there is no evidence that this move was in any way connected to the Iran-China megadeal.
Moreover, the officials from both New Delhi and Tehran have promptly denied that even Indian involvement in the Chabahar-Zahedan railway project has been canceled. This does not have to mean that there are no problems with this initiative. The spokesman of the Indian Ministry of External Affairs has suggested that the blame lies on the other side, declaring that the Tehran authorities were to “nominate an authorized entity to finalize outstanding technical and financial issues” of the railway construction — and that they have not done so since December.
Fourthly, supporting the Chabahar project in its current form would make little sense for Beijing. As mentioned above, the port and its related infrastructure is to enhance connectivity between Iran and Afghanistan. In a broader scheme of things, for Tehran, the port project would enhance the country’s connections with both the world and Afghanistan. For Kabul and New Delhi, one of the main objectives of this initiative is to create an alternative land route to Afghanistan, one which would make this landlocked mountainous country more connected to the world, but also less dependent on transfers via Pakistan, thereby also making India-Afghanistan exchange easier.
It is no coincidence that India had earlier constructed the Zaranj-Delaram road in Afghanistan. This route connects the Afghan “Ring Road,” a highway that links Afghanistan’s four main cities, with the town of Zaranj which lies next to the border with Iran. Zaranj is not far from Zahedan, and thus the establishment of the Zahedan-Chabahar rail link, and an expansion of the Chabahar port are all part of India’s strategy to create routes to Afghanistan that would bypass Pakistan.
These goals, by themselves, are not aimed at Chinese but there is little reason for China to support them either. Indirectly, Chabahar may emerge as potential regional competition to the Chinese project of developing the nearby Gwadar port in Pakistan. While Islamabad is Beijing’s staunch partner, China’s financial support to the Chabahar project, if successful, would have undercut the geographical leverage that Pakistan enjoys over Afghanistan.