The landlocked Afghanistan has been using the port of Karachi in Pakistan for its international trade for decades but with the development of the strategically located Chabahar port of Iran, the situation has taken a turn to the disadvantage of Pakistan. Chabahar port is located in the Sistan and Baluchestan Province of Iran, some 72 kilometers west of Pakistan’s Gwadar port.
The Chabahar port has dented Pakistan’s centrality to Afghanistan’s external trade and Central Asia as a major portion of its transit business has been lost to Iran and now India. Recently, Afghanistan finalized a tripartite trade agreement with Iran and India on using the Chabahar port as an alternative route, which is expected to increase bilateral trade from $700-800 million to $3 billion.
Over the last decade, the Iranians have invested considerably in the development of Chabahar. A 600 kilometer long highway linking Chabahar to Zahidan in Iran’s north, only 240-kilometer from Malik on the Iran-Afghanistan border, is already operational. India has also already spent $100 million on building a 220-kilometer Zaranj-Delaram highway since 2009 in the southwestern Nimroz province of Afghanistan which is 700 kilometer away from southeastern Iran and can be easily extended to be linked to Chabahar. Iran has also started constructing a railway line from Chabahar to Zahidan where it will connect with the Iranian rail network and to Central Asia and the Commonwealth of Independent States (CIS). Iran foresees Chabahar Port as an instrument in their policy to evade international isolation and has invested substantial resources to upgrade it with the strategic objective to create an alternative to Bandar Abbas, which is located further west across the state of Hormuz. Iran fears that any blockade of the Straits of Hormuz would create challenges for its trade and commerce activities. The Iranian government has also set up a Free Trade Zone at Chabahar to attract investors where CIS countries and Afghanistan have already been given land.