NEW DELHI - Some call it a potential game-changer for India, noting that the new port facility will offer the country a gateway into Central Asia and a counter to Chinese moves in its backyard.
The facility in question is an extension of Iran's Chabahar Port, which looks to provide India an alternative transit route to landlocked Afghanistan and other parts of Central Asia.
On Sunday (Dec 3), Iranian President Hassan Rouhani inaugurated the first phase of the port extension in Sistan-Baluchestan, south-eastern Iran, which is being developed with an investment of US$1 billion (S$1.35 billion). India is investing US$500 million in the port, for the building of facilities such as terminals, rail and road links.
Analysts noted that the port would allow India to keep an eye on Pakistan's Gwadar Port just 100 km away from Chabahar Port, as well as Chinese activities in the area.
Former Indian foreign secretary Lalit Mansingh told The Straits Times there is a strategic dimension to India's involvement in the Iranian port.
"The Chinese are operating Gwadar Port. They have an eye on using it for military purposes. There is talk of Chinese submarines and warships surfacing there. It becomes even more important for India to have another establishment within 100 km of Gwadar to keep an eye on Chinese naval activities."
He added: "It is a game-changer potentially. It is taking shape. India, which doesn't often perform on time, is this time at least active and pushing for it."
India's Ministry of External Affairs noted in a press release that Chabahar Port "would contribute to bilateral and regional trade and economic development and also provide alternate access to landlocked Afghanistan to regional and global markets".
Currently, India has limited access to Afghanistan. Rival Pakistan has mostly not allowed India transit rights to send goods into the landlocked country, though it has allowed Afghanistan to send restricted items to India.
In any case, relations between Afghanistan and Pakistan have worsened, after both countries accused each other of harbouring terrorists.
Already, India has sent around 15,000 tonnes of wheat, part of a shipment of a total of 1.1 million tonnes of wheat promised to Afghanistan, to Chabahar Port on Oct 29, which analysts said showed the viability of the port. The wheat reached Chabahar and was then taken by road through Iran's border with Afghanistan.
India is looking at equipping and operating two berths at Chabahar Port by 2018.
But the port project may run into problems now that the United States has taken a tougher stance against Iran, with US President Donald Trump accusing the Middle Eastern country of harbouring terrorists. The US is also deciding whether to scrap a nuclear trade deal struck in 2015 between Iran and six parties, including the US and European Union.
The deal had paved the way for Iranian port project, which has had many delays in part due to Western sanctions against Iran for its nuclear programme.
It was during the visit of Prime Minister Narendra Modi to Teheran in 2016 that India, Iran and Afghanistan signed the Chabahar transport and transit agreement to build a trade corridor that would provide an alternative route to Afghanistan and also substantially decrease the cost of trade with Central Asia.
The US has so far noted that it will not interfere with the Chabahar Port project - US Secretary of State Rex Tillerson during his visit to India in October said that the US would not "interfere with legitimate business" conducted between other countries and Iran.
Analysts noted that even if the US were to change its position, India would not stop working on Chabahar Port.
Said Mr Mansingh: "Trump's rhetoric against Iran has been just bark and no bite till now. But I am sure if Americans reimpose sanctions (on Iran), India will be able to resist them."
Agreeing, Arab expert and India's former ambassador to Palestine, Mr Zikrur Rehman, told ST: "India will see to its own interests. It is a significant port for us and there is a long way to go.''