Chah Bahar Port to Facilitate Strong Trade Ties Between Afghanistan, India and Iran

On Wednesday, Indian Embassy officials, emphasising on the importance of the Chah Bahar port for India and Afghanistan, said that the port will pave the way for strengthening business ties with India, Afghanistan and Iran. The officials added that India is eager to trade with Afghan businessmen through this port.

Chah Bahar is a free port (Free Trade Zone) in Iran and located on the coast of the Gulf of Oman. Chah Bahar is Iran’s southernmost city. The Chah Bahar port has been officially designated as a Free Trade and Industrial Zone by Iran’s government. Due to its free trade zone status, the city has an increased significance for international trade.

According to the Afghan Ministry of Commerce and Industry, trade and transit related issue with Pakistan is hampering the overall health of the Afghan economy. Under such circumstances, the Chah Bahar port could be the best alternative for Afghanistan to enter the Indian and Iranian markets. This will help in expanding its trade and commerce relations with the two countries.

Indian authorities added that the Chah Bahar port was the most suitable port for initiating commercial activities and strengthen its relations with Afghanistan.

“We are committed to develop the Chah Bahar port in collaboration with the Iranian government. Implementation of the project will give the three countries an opportunity to expand its trade and transit relations through the Delaram-Zaranj route, which is also connected to several ring-roads of Afghanistan,” said Amar Sinha, Indian Ambassador to Afghanistan.

“Efforts should be made to expand trade and investment relations between Afghanistan and India. A lucrative opportunity exists in the local Afghan markets for Indian products. Similarly, India is a good market for the fresh and dry fruits of Afghanistan. Hence, it is advisable for both countries to find the cheapest and safest route for expansion of trade relations,” added Mr. Sinha.

Meanwhile, the Afghan Ministry of Commerce and Industries criticised the Pakistani government for violating the Bilateral Trade and Transit Agreement (BTTA) signed between the two countries and accused it of not letting the Afghan traders enter Wagah border.

Elaborating on the issue, the Afghan Minister of Commerce and Industry, Anwarulhaq Ahadi said, “Problems with Pakistan still exist. These issues should be settled quickly. If we get direct access to the domestic Indian markets, we can increase our exports to India.”

According to the BTTA, Afghan traders are permitted to enter all the ports of Pakistan, including the Wagah port, located alongside the India-Pakistan border. But, Pakistan has stopped allowing the Afghan traders to export their commodities to India through the border in Wagah.

In light of the issue, Afghan traders said that they are trying to seek an alternative to the Karachi port in order to import and export goods without any restrictions.

The BTTA was signed by Pakistan and Afghanistan in 1965. However, at a later stage Pakistan refused to endorse some articles in the Agreement because of its growing tensions with India. In recent years, Afghanistan struggled to mount pressure on Pakistan to abide by the provisions of the BTTA. Finally, the 1965 Afghanistan-Pakistan Trade and Transit agreement was amended and signed by the heads of the two countries in 2010. According to the amended Agreement, Afghanistan got some trade and transit rights and was permitted to enter all the ports of Pakistan.

Unfortunately, Pakistan stopped following the new BTTA and started creating hurdles with an aim to prevent the Afghan traders from gaining access to the ports of the country. The Pakistani government justified its action by saying that the Afghan traders must unload their goods at the Karachi port since they had no right to use any other port. Additionally, Pakistan increased the transit duties on Afghan products and sought financial guarantee from the Afghan businessmen.

These issues compelled the Afghan traders to find an alternative for Pakistani ports. Finally, the Iranian Chah Bahar port was zeroed in, as it was the most suitable port and India also backed Afghanistan to focus on the port.

Recent efforts made by the Indian government to develop the Chah Bahar port and initiate bilateral talks with the Iranian officials has once again diverted the attention of Afghan traders toward Chah Bahar.

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