India will lose Iran’s Chabahar port to China

Significance

The temporary nature of this appointment is seen as downgrading Chabahar's significance for Delhi. Iranian-Indian collaboration on the ‘strategic’ development has soured under US sanctions on Tehran (even though these specifically exclude Chabahar). In July, Iran dropped India from a linked railway project shortly after finalising a 25-year cooperation agreement with China.

Impacts

• Iranian military and security actors are likely to seek a greater role in the Chabahar developments.
• India’s perceived loss of the strategic Chabahar project to China could further heighten bilateral tensions elsewhere.
• Even if US policy changes, Beijing’s long-term strategic position in Iran may reduce future access for Western firms.
• Unemployment and poverty in Iran will increase.