Pakistan’s decision to hand over commercial operations at the Gwadar port to the Chinese Overseas Port Holdings, a state-owned company, does not come as a surprise. Interestingly, for some, it was a deliberate and a ‘smart ploy’; first bring in a foreign operator like the Port of Singapore Authority (PSA) and award it port management and development contract for 40 years; dispel the ‘China threat’ and the oft stated Gwadar as a post in the ‘string of pearls’ strategy; and then, at an opportune moment and on some pretext, transfer it to the Chinese. 

Has the gambit paid off?  What are the implications? And what can India do? 

China and the Strategic Significance of Gwadar

 

Gwadar port located on the Makran coast is a strategic maritime outpost. It is close to the energy rich but volatile Gulf region and about 400 kilometers from the Strait of Hormuz, a strategic chokepoint through which nearly 16-17 million barrels of oil is transported daily. On an average 20-30 tankers enter the Gulf each day and during peak hours, one tanker leaves the Strait every six minutes. 

Gwadar has figured prominently in China’s Indian Ocean calculus and Beijing had generously invested US $198 million of the US $248 million in the project. It is also fair to argue that Chinese have the capability to build modern ports given that some of their own ports are ranked among the top ten in the world. 

Gwadar offers China several economic and military advantages. China can directly ship its oil supplies from Iran via the Iran-Pakistan pipeline (erstwhile Iran-Pakistan-India (IPI) pipeline project) or other Gulf states through the Gwadar port. In fact Pakistan has offered China the option to build a 1500 kilometers pipeline from Gwadar to Xinjiang in western China. Apparently, China is also set to ‘re-launch the Gwadar oil refinery project’ that had been put on hold in 2009 due to the fear of attacks by the separatist elements in Baluchistan who had kidnapped few Chinese engineers.

From a military perspective, Gwadar is a strategic listening post to monitor maritime and naval activity in the Gulf region. The PLA Navy can forward deploy its ships and submarines to ensure safety and security of Chinese shipping carrying vital energy supplies. However, China does not consider Karachi naval base suitable as a forward base since it is conscious of the vulnerability of the Karachi port that was exposed during the 1971 India-Pakistan war. This prompted Pakistan to develop alternative naval bases west of Karachi away from India and Gwadar, 600 kilometers from Karachi, is considered safe from attacks by the Indian air force. 

A Strategy for India: Focus on Chabahar?

 

Developments in Gwadar have invited mixed reaction in India. For the Indian Defence Minister, “it is a matter of concern,” but the Foreign Minister has dismissed any apprehensions. Interestingly, he stated that there is no need to overreact over the Chinese engagements in Gwadar. Instead he opined that,“We need to take these matters in our stride and in the normal course.”  Meanwhile, the Chinese Foreign Ministry spokesperson in Beijing has defended China’s engagement in Gwadar and stated that Chinese companies have participated in projects in Pakistan and, “as long as these things are conducive to China-Pakistan friendship and the development and prosperity of the country, the Chinese side will actively support them,” 

India too has shown some alacrity in developing infrastructure in foreign territories. The ambitious joint project to develop the Chabahar port in Iran which is only a few miles from Gwadar is making some visible progress. Significantly, in 2012, Iran, India and Afghanistan signed a tripartite agreement to develop the Chabahar port. India may invest up to US $100 million depending on the expansion of the port including building modern infrastructure and undertaking port operations. Chabahar can be connected through rail and road networks to the International North South Transport Corridor (INSTC), a multinational project involving India, Iran and Russia. It can serve as trans-shipment hub for Zahedan, Afghanistan through a 600 kilometer connecting road and also as a transit point for the landlocked Central Asian Republics (CARs). The latter fits well into India’s ‘Connect Central Asia’ policy announced last year in Bishkek, Kyrgyzstan. 

Likewise, for Afghanistan, Chabahar is of strategic importance as an alternate to Pakistani ports through which it engages in international trade. Its supply chains are vulnerable to a number of factors including tensions in Afghanistan-Pakistan relations and threats from terrorist groups.

Given its interest in Chabahar, India would like to develop the port to serve military purposes. Iran too is keen to develop Chabahar as an alternate naval base to overcome the vulnerabilities of its main naval base at Bandar Abbas. However, the big question is, would Iran allow the Indian Navy access to Chabahar.