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Is India’s optimism over Iran’s Chabahar port grossly misplaced?

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8 years ago

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Chabahar-challenge

[vc_row][vc_column][vc_column_text]By Seema Guha

US President Donald Trump’s hardline strategy against Iran could severely impact India’s hopes of enhancing trade and commerce through the Chabahar port

The first shipment of wheat from India was sent last week to the Iran’s Chabahar port and then onwards by rail and road to Afghanistan. This marks New Delhi’s attempt to avoid Pakistan, which does not allow Indian goods to transit its territory.

The fact that the long delayed project is at last taking shape, has led to general euphoria on all sides and a somewhat misplaced expectation of steadily increasing the volumes on this route. The grain sent out to Afghanistan from a port in Gujarat was a gift from the people of India to the citizens of Afghanistan.

“The shipment of wheat is a landmark moment as it will pave the way for operationalisation of the Chabahar port as an alternative, reliable and robust connectivity for Afghanistan. It will open up new opportunities for trade and transit from and to Afghanistan and enhance trade and commerce between the three countries (India, Iran and Afghanistan) and the wider region,” the statement released by the ministry of external affairs noted. But this is an unrealistic and overtly optimistic assumption.

With US President Donald Trump ready to tear up the landmark nuclear agreement signed in 2015, chances of fresh sanctions being slapped on Iran by the US Congress are very high. Once this happens it will be difficult for both India and Afghanistan not to heed US pressure.

Though Delhi as a rule does not pay heed to sanctions, unless they are mandated by the UN Security Council, the US has found a way to deal with this. From past experience it has learnt how best to target companies doing business with Iran. To make the sanctions effective, the US had earlier decreed that any company doing business with Iran cannot operate in the US. It cannot also have any dealings with American financial institutions. With America still the world’s largest economy and its financial clout spread across the world, it is difficult for any company to continue dealing with Iran. No company or government is in a position to turn its back on the US, unless there are political motivations.

For India under Prime Minister Narendra Modi, bent to take relations with the US to a new unprecedented height, the question of not supporting US will not arise. The stakes are too high, more so because Washington is now promising to deliver high-tech defence technology so long denied to India.

One of Donald Trump’s election promises was to walk out of the Obama sponsored Iran nuclear deal. He has already taken the first step in this direction, by refusing to certify Iran’s compliance to the agreement. Though the International Atomic Energy Agency, which is on the ground in Iran, inspecting every aspect of the country’s nuclear program, had certified three times that Tehran has stuck to the agreement, Trump refused to certify it. Now he has asked the US Congress to come up with fresh ideas to make the deal much more stringent and slap nuclear sanctions against Iran.

Despite the fact that other countries, who were part of the agreement like France, Germany, UK, Russia, China as well as the EU are lobbying hard to keep the agreement intact, the US remains adamant. President Trump has also warned that if lawmakers refuse to act, he has the executive powers to enforce his will. So despite the fact that European countries, China and Russia are all opposed to Trump’s move, he can well wreck the deal and impose fresh sanctions on Iran.

This is why despite India’s optimism, using Chabahar for growing trade with Afghanistan seems doomed to fail. This, so long as Donald Trump continues to be adamant. Chances of Trump changing his views are remote. More so, because he is pleasing Saudi Arabia, UAE and other Sunni powers worried about Iran assuming its rightful place in the world.

The idea of using the Iranian port for trade with Afghanistan took shape in 2003, during Atal Bihari Vajpayee’s term as prime minister. Thanks to crippling sanctions slapped by the US on trading with Iran, the project never had a chance to take off. When sanctions were lifted after the nuclear agreement another bilateral agreement was signed between India and Iran for the development of both the port and railway track to transport the goods to Afghanistan.

India has already constructed a road from Delaram in Afghanistan to Zaranj at the Iran-Afghanistan border at the cost of $134 million. This road would help to carry goods by road from the Iranian border to different destinations in Afghanistan.

Developing an alternative trade route as not to be held hostage by Pakistan was a good idea. But the US-Iran relations have hit this project hard. Earlier it was delayed because of sanctions and now it is unlikely to take off as relations between the US and Iran deteriorate.[/vc_column_text][/vc_column][/vc_row]

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India and Russia vow to walk together against terrorism, reaffirm strategic partnership

PM Modi and President Putin reaffirm India-Russia unity against terrorism, deepen energy and trade cooperation, and discuss peace efforts amid the Ukraine conflict.

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3 hours ago

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December 5, 2025

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Prime Minister Narendra Modi and Russian President Vladimir Putin on Friday underlined that India and Russia “walk together in the fight against terrorism,” reinforcing a decades-old strategic partnership that remains steady amid global geopolitical churn. The leaders issued the joint statement following talks at Hyderabad House in Delhi, where they also announced steps to boost trade, economic cooperation, and energy collaboration.

India-Russia stand firm on counter-terror cooperation

PM Modi described President Putin as a “dear friend” and highlighted Moscow’s consistent support to India on counter-terror efforts. Russia had earlier strongly condemned the terror attack in Jammu and Kashmir’s Pahalgam, allegedly linked to Pakistan-based Jaish-e-Mohammed, and reiterated solidarity with India’s fight against terrorism in all forms.

The joint remarks emphasized that the bilateral friendship, rooted in trust and mutual respect, has remained resilient for decades despite global challenges.

Focus on energy, trade and use of national currencies

A key highlight of the engagement was Russia reaffirming “uninterrupted shipments” of fuel to India. PM Modi expressed gratitude for Russia’s commitment, noting energy cooperation as a crucial pillar of the relationship. While he did not specifically mention oil purchases, given ongoing Western pressure, he emphasised cooperation in civil nuclear and clean energy.

The two countries also discussed expanding economic ties, including a possible free trade agreement. President Putin said bilateral trade was being targeted to reach USD 100 billion, and acknowledged progress toward using national currencies for payments — a remark expected to draw global attention.

Putin shares peace plan insights on Ukraine conflict

Putin briefed the Prime Minister on Russia’s perspective for a peaceful resolution to the ongoing Ukraine war and appreciated India’s continued role as a “champion of peace.” PM Modi reiterated India’s consistent position on dialogue and diplomacy.

Agreements across jobs, health, shipping and minerals

Officials exchanged multiple agreements covering employment mobility, health, shipping, chemicals and cooperation in critical minerals — further broadening the strategic footprint of the partnership.

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RBI cuts repo rate to 5.25%, paving the way for cheaper loans

The RBI has cut the repo rate to 5.25%, aiming to support growth as inflation softens. The central bank also raised GDP projections and announced liquidity-boosting measures.

Published

8 hours ago

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December 5, 2025

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Reserve Bank of India

The Reserve Bank of India (RBI) reduced the key repo rate by 25 basis points to 5.25% on Thursday, signalling relief for borrowers as banks are expected to offer lower EMIs on home and vehicle loans. Governor Sanjay Malhotra announced the move after the conclusion of the three-day Monetary Policy Committee (MPC) meeting.

RBI prioritises growth as inflation eases

Malhotra said the decision was unanimous, with the central bank choosing to focus on supporting economic momentum despite concerns over a weak rupee. The repo rate was earlier cut in June from 6% to 5.5% amid easing inflation trends.

The RBI now projects Consumer Price Index (CPI) inflation at 2% for FY2025-26, significantly softer than earlier estimates. For the first quarter of FY2026-27, inflation is expected at 3.9%, lower than the previous projection. The governor noted that rising precious metal prices may contribute to the headline CPI, but overall risks to inflation remain balanced.

GDP outlook strengthened

In a strong upward revision, the central bank increased the GDP forecast for the current financial year to 7.3%, previously estimated at 6.8%. Growth for the October–December quarter has also been revised to 6.7%.

The last quarter registered a six-quarter high expansion of 8.2%, reflecting resilient demand and steady credit flow.

“The growth-inflation balance continues to offer policy space,” Malhotra said, reiterating that the RBI’s stance remains neutral.

Other key decisions

Alongside the repo rate cut, the RBI announced adjustments to key policy corridors:

  • Standing Deposit Facility (SDF): 5%
  • Marginal Standing Facility (MSF): 5.5%

To improve liquidity and strengthen monetary transmission, the RBI will conduct forex swaps and purchase ₹1 lakh crore worth of government bonds through Open Market Operations (OMO).

RBI reviews a challenging year

Reflecting on 2025, Malhotra said the year delivered strong growth and moderate inflation even as global trade and geopolitical uncertainties persisted. He added that bank credit and retail lending remained healthy, providing support to the economy.

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India News

IndiGo flight chaos deepens as over 500 services cancelled, passengers stranded for hours

Over 500 IndiGo flights were cancelled nationwide, leaving passengers stranded without food, clarity or their luggage as airports struggled to manage the disruption.

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8 hours ago

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December 5, 2025

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IndiGo flight

India’s largest airline continued to face massive operational breakdowns, triggering frustration among travellers at major airports across the country. From piles of unattended suitcases to passengers waiting over 12 hours without food or clarity, the disruption stretched into its fourth consecutive day.

Long delays, no communication leave passengers anguished

Several travellers at Delhi airport described the situation as “mental torture”, as thousands of unclaimed suitcases lay scattered across the terminal. Many slept on the floor, while others expressed anger over the lack of communication from airline staff.

One flier said he had been waiting for over 12 hours without any explanation: “Every time they say one-hour or two-hour delays. We were going to a wedding but don’t even have our luggage.”

A passenger in Hyderabad recounted a similar ordeal, saying the flight was delayed indefinitely with no food, water, or updates from the airline. At the airport, some travellers blocked an Air India flight in protest over the lack of arrangements.

Goa and Chennai airports also witnessed tense moments. Videos from Goa showed fliers shouting at IndiGo staff as police attempted to calm the situation. At Chennai, CISF denied entry to IndiGo passengers due to heavy congestion.

Major metro airports impacted; cascading cancellations nationwide

Flight cancellations and delays were reported across multiple airports:

  • Over 200 flights were cancelled in Delhi
  • More than 100 each in Mumbai and Bengaluru
  • Around 90 in Hyderabad
  • Dozens more in Pune, Vishakhapatnam, Chennai and Bhopal

Pune airport stated that parking bay congestion worsened the situation, as several IndiGo aircraft remained grounded due to lack of crew. Other airlines continued operations without disruption.

Airport authorities said they had mobilised additional manpower for crowd control and passenger support.

IndiGo admits planning lapses, says more cancellations expected

The airline acknowledged a “misjudgment” in assessing crew requirements under revised night-duty norms, which it said created planning gaps. Winter weather and airport congestion further aggravated the crisis.

IndiGo informed the aviation ministry and DGCA that some regulatory changes—such as the shift in night-duty timings and a cap on night landings—have been rolled back temporarily to stabilise operations.

The airline warned that cancellations may continue for another two to three days, and from December 8, schedules will be trimmed to prevent further disruption.

In a message to employees, CEO Pieter Elbers said restoring punctuality would not be an “easy target”.

Airline issues apology amid nationwide frustration

In a late-night statement, IndiGo apologised to customers and industry partners, acknowledging the widespread inconvenience caused by the disruptions. The airline said all teams were working with authorities to bring operations back to normal.

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