Thursday, 13 October 2016
Chabahar Port deal: An advantage for the Indian Steel Market.
It is for the first time that India has such keen interest in developing an international port, all owing to its strategic location and the trade routes it opens up for International trade.
The development of the Chabahar Port is estimated to be a breakthrough for opening up new trade routes for trade and establish a healthy network and market in West Asia.
These new route would facilitate new trade markets which would cater to the complete region. Also, considering the fact that the Nations in these regions are still developing and going through an industrial phase, the demand of steel from the international market would see a visible surge for construction and developing the infrastructure.
As the new port will directly cater to Iran, India expects to see an increase in trade from this region as it will have direct access and connect it to other major ports.
The Chabahar Port will be a game changer for India because it will provide connectivity to Afghanistan, Iran and Eurasia, strategically outflanking an intransigent Islamabad. It is also a counter to the China-Pakistan Economic Corridor (CPEC). Foreign minister Sushma Swaraj’s interest in connecting Iran’s Mashhad, near the Caspian Sea, with Zahedan, next to the Afghanistan border, via an India-built 900-km rail line with the Chabahar Port will unlock a new gateway to Central Asia and Europe, bypassing the Pakistan-China arc.
For both, developing the port and constructing the railway line, the projects would demand for a lot of steel imports from the international steel market from these region.
The bilateral agreement to develop the Chabahar port and related infrastructure, and availability of about $500m from India for this purpose, is an important milestone. This major effort would boost economic growth in the region and accelerate the rate of development for the neighbouring countries.