2023 Research and Study

  • Commentary
  • publication date:2024/03/18

Diversification of Iran’s Diplomacy and its Connectivity Strategies: Focusing on Chabahar Port and the International North-South Transport Corridor (INSTC)

MEIJ Commentary No.4

Kenta Aoki, Executive Research Fellow, MEIJ


Introduction: Iran’s multilateral diplomacy and the strengthening of connectivity

Between 2022 and the beginning of 2023, amid protests against the forced wearing of the hijab (the veil covering a woman’s hair), suspicions that it was supplying drones to Russia, and an intensification of its uranium enrichment efforts, Iran was increasingly isolated on both the regional and international stages. Recently, however, the prevailing conditions appear to have begun to improve for Iran. One can point to, for example, its agreement with Saudi Arabia to normalize diplomatic relations after a seven-year rift, reached on March 10, 2023, with the help of Chinese mediation.

Other notable developments include Iran’s membership in the Shanghai Cooperation Organization (July 4, 2023), the approval of Iran’s membership in BRICS (August 24, 2023), and the rapid strengthening of political and economic ties with China, Russia, and South American nations. Taken together, these point to a strong emphasis on multilateralism in Iran’s international posture.    

In light of this, this commentary considers how Iran has sought to develop its linkages within the region and the strategy it employs to this end, via a field study of Chabahar Port in Sistan and Baluchistan Province in south-east Iran. Chabahar Port has received massive investment from a rapidly developing India, garnering much interest for its political and economic significance, and is expected to have wide-reaching effects, hence the focus of this paper. Additionally, the paper will discuss the present state of the International North-South Transport Corridor (INSTC), a multi-modal trade route connecting India and Russia via Iran, the Caucasus, and the Caspian Sea, and will consider the role that Japan might play in these developments.


Fundamental principles of Iran’s foreign policy and changes under the Raisi administration

Before delving into a detailed discussion of Chabahar Port, it is worth briefly considering the sorts of foreign policy positions Iran has taken up until now.

The present Iranian regime was established in February 1979, and its foreign policy is strongly dependent on the understanding of the international system held by the country’s first supreme leader, Ruhollah Khomeini. It is also shaped by the doctrine of the Twelve Imams of Shia Islam, and a perspective grounded in realism and emphasizing the pursuit of national interests. Khomeini’s view of the international system is defined by the principle of impartiality—of being “neither East nor West”—and is instead concerned with the relationship between suzerain and dependent states, with a fight against injustice and inequality, support for oppressed people, resistance against superpowers, opposition to the United States, the defense of Muslims, support for the Palestinian people, and opposition to the state of Israel. These basic principles have remained largely unaltered over time. 

Regarding Iran’s foreign-policy-making processes, these are not necessarily determined by the will of its supreme leader. Apart from the supreme leader, a range of different actors, in addition to constitutional provisions, exert a considerable influence over Iranian foreign policy, including the Assembly of Experts, President, Ministry of Foreign Affairs, Revolutionary Guard, Guardian Council, and the Supreme National Security Council. Accordingly, Iranian foreign policy has undergone repeated changes, both large and small, depending on political conditions.

In what ways has foreign policy changed under the Raisi government? In his inauguration speech (August 2021), Raisi spoke of the “Second Phase of the Revolution.” Assuming that, as these words imply, his administration has inherited the existing Iranian revolutionary philosophy, it is understandable that the President’s policies would largely hew to the fundamental principles of the revolution. Raisi’s talk of a “balanced foreign policy” suggests a prioritization of Iran’s neighboring countries while maintaining a principle of impartiality between East and West.

On the other hand, after the country’s parliamentary and presidential elections (in 2020 and 2021, respectively) one cannot overlook the fact that hardline voices within Iran have been steadily gaining in power. In particular, the failure of the previous approach of international cooperation taken by former President Rouhani because of former US President Trump’s abandonment of the nuclear agreement (in May 2018) and his campaign of “maximum pressure,” have exerted a significant impact on Iran’s subsequent foreign policies. Given the deadlock in the Iran-US relationship, Iran has had no choice but to diversify its diplomatic efforts, making overtures to both China and Russia, in an effort to “neutralize” the effects of sanctions. In other words, Iran has been forced to make a shift away from the Rouhani-era diplomacy, which had been focused on the US and Europe, toward a much more multilateral approach.


Chabahar Port and Iran’s connectivity strategy

It is in the context of the changes in Iranian foreign policy described above that we turn to the case of Chabahar Port.

Chabahar Port is a deep-water port facing the Sea of Oman in Sistan and Baluchistan Province in south-east Iran. The province is populated mostly by the Baluch people, who inhabit an area that stretches across Pakistan, Afghanistan, and Oman. From the 18th to mid-19th century, during the days of the Omani maritime empire, the port was a possession of Oman, similar to the enclave of Gwadar (which belonged to Pakistan in 1958). Subsequently, with the establishment of a master plan in 1973, the port’s infrastructure was gradually developed. The movement of goods through the port surged during the Iran-Iraq War (1980–1988) owing to its position outside the Strait of Hormuz.

Though its development was delayed by the war, foreign investment in the port was encouraged by the establishment of a Free Trade Zone (FTZ) in 1993. The invasion of Afghanistan by the US and British-led Coalition of the Willing, following the terrorist attacks of September 11, 2001, in the US, increased the importance of Chabahar Port as a maritime route for the transportation of foreign goods to Afghanistan. In 2003, India reached an agreement with Iran to further develop the port, and a three-way partnership between Iran, India, and Afghanistan was signed in May 2016. These developments, together with the contrast with Pakistan’s Gwadar Port, increased expectations for Chabahar’s future.

One of the most important features of the development of Chabahar Port is that it is to be both integrated and comprehensive, including a petrochemical complex and steel milling facilities in addition to port infrastructure. A total of 11 gantry cranes for the loading and unloading of shipping containers have been built on the Shahid Beheshti Pier, one of the two piers in the port, and are currently in operation (author’s observation, August 2023). Trucks that will carry wheat into Afghanistan line the entrance to pier each day.

In addition, while plans to build nearby railways are being pursued, at the time of writing (late February 2024) the railway between Chabahar and the provincial capital of Zahedan was incomplete, and it will be some time before it is fully operational. Once this railway is complete, it will be easier to transport goods arriving from Mumbai (India) through the interior of Iran and on to Afghanistan, the countries of Central Asia, the Caucasus, and Russia. International University of Chabahar and Chabahar Maritima University also plan to conduct teaching and research in English for students from neighboring countries, and a rush of construction is underway in Chabahar’s residential sectors thanks to an influx of investment by Iranians in Tehran and other large cities, as well as foreign investors. 

In terms of its connections to foreign countries, it is notable that the US removed economic sanctions from Chabahar Port in November 2018. It is said that the US did so out of consideration for India, which had invested large sums in the port, and for the role it has played toward humanitarian objectives in Afghanistan, one of the beneficiaries of the ports. India has announced it will invest USD 50 billion. India Ports Global Limited (IPGL), which holds operating rights at the port, has an office located at the port. India has clearly secured a significant presence at Chabahar Port. On the other hand, it may also be the case that the port’s level of priority for India has fallen since the collapse of the Afghan government and the return of the Taliban to power in 2021. In the midst of such developments, the presence of Russia and China has increased. Finally, while Japan is implementing three Overseas Development Assistance (ODA) projects, the fear of secondary sanctions among private enterprises has prevented them from making investments under the FTZ.


Regional connections between Chabahar Port and the International North-South Transport Corridor

It is clear from the above that there are numerous aspects of the development of Chabahar Port that lie beyond the interests of the Indian government. The following section considers the connectivity strategy from the Iranian perspective and analyses the perspectives of the other important actors, namely India and Russia.

From the Iranian perspective, Chabahar Port’s significance lies in its role as a regional hub. Freight arriving at the port from Mumbai can be transported overland (and, in the future, by rail) to Afghanistan and the Central Asian nations. At present, most of Iran’s shipping operations are concentrated in the port in Bandar Abbas, and the development of Chabahar would thus also serve to relieve the burden on ports to the west of the Strait of Hormuz. Domestically, investment to develop Iran’s “frontier,” Sistan and Baluchistan Province, is also important. In multi-ethnic Iran, it is critical to apprehend any social alienation and disaffection among its ethnic minorities, and the development of a FTZ in Chabahar would contribute to this goal. Importantly, Chabahar may also serve as an alternative port in an emergency. Its location outside the Strait of Hormuz means that goods could enter and leave Iran via Chabahar Port in the event Iran’s regime leadership decided to blockade the strait. Such strategic aspects should be considered alongside commercial ones.

From the Indian perspective, the development of Chabahar Port serves as a constraint against China and Pakistan. These countries are promoting the China-Pakistan Economic Corridor (CPEC) and are actively developing Gwadar Port, which serves as the entryway to that corridor. India’s investment in Chabahar Port, located 160 kilometers to the west of Gwadar, likely reflects opposition to CPEC. The investment is also important for its contribution to the India’s Connect Central Asia Policy, a cornerstone of its extended neighborhood policy. That Chabahar Port may also contribute to Afghan economic recovery is likely to be another main factor behind India’s involvement in the port.

Russia, another key actor, seeks a connection to India through the INSTC via Chabahar Port. Since its February 2022 invasion of Ukraine and the strengthening of sanctions by against it by the US and Europe, Russia has been frantically seeking to make ends meet under its wartime economy. Accordingly, Iran has become an increasingly important political and economic partner for Russia. The importance of its connection with India via the ports at Bandar Abbas and Chabahar has also increased. An agreement reached in May 2023 between Russia and Iran to construct a railway between the Iranian city of Rasht near the Caspian Sea and the Iranian city of Astara, near the border with Azerbaijan, is a measure of Russian interest in the area. The construction of such a railway, in addition to that between Rasht and the Anzali (a port town on the Caspian Sea) would further increase the utility of the INSTC.

In summary, in an international environment characterized by two ongoing wars, that of Russia-Ukraine and the war in Gaza, the agendas of Iran, India, and Russia with regard to both Chabahar Port and the INSTC are in alignment.


Conclusion: Implications for Japan and a “Free and Open Indo-Pacific”

What, then, does Chabahar Port’s development and the INSTC mean for Japan? In 2016, Japan announced its “Free and Open Indo-Pacific” concept, which seeks to enhance prosperity in the region by increasing connectivity within the Indo-Pacific and by promoting freedom and the rule of law instead of force and coercion. As attempts to change status quo arrangements through force have increased, it is increasingly important for all countries to enjoy stability and growth, while ensuring freedom of navigation within the Strait of Hormuz and the Red Sea promotes the national interests of trading nations like Japan. Any Japanese involvement in the development of Chabahar Port and the INSTC would likely enhance cooperation between Japan and Iran, as well as between Japan and India, and furthermore promote Afghanistan’s economic recovery.

However, Japan is not only a pillar of the Asian community but also a member of the G7. From the perspective of G7 solidarity, Japanese support for Chabahar Port and the INSTC would likely amount to helping Russia, which has threatened the territorial integrity of Ukraine. In addition to the commercial use of Chabahar Port, its potential for military uses, either directly or indirectly, cannot be completely discounted, and this is likely to become a significant issue. Japan will have to consider both of these potentialities in detail before it decides on any specific involvement in the port. Hitherto, Japan has been focused on the centrality of ASEAN and has not paid sufficient attention to the western edge of the Indo-Pacific region. Given its backing for a “Free and Open Indo-Pacific,” Japan must redouble its efforts with respect to its connections to the western edge of the Indian Ocean, including with Iran and Oman.



Author’s Biography

Kenta Aoki is an Executive Research Fellow at the Middle East Institute of Japan (MEIJ). He earned a B.A. degree in Sociology at Sophia University and M.A. in Peace Studies from the University of Bradford, U.K. His research primarily focuses on the contemporary politics in Afghanistan and Iran. He worked in Afghanistan between 2005 and 2013 for 7 years with various institutions as a diplomat at Japanese Embassy, a technical advisor at UNDP/Afghan Ministry, and so on. His recent publications include “The Quad Plus and Promoting International Connectivity: A Focus on the Makran Region,” in Jagannath P. Panda and Ernest Gunasekara-Rockwell eds., Quad Plus and Indo-Pacific: The Changing Profile of International Relations (Routledge: 2021), The Resurgence of the Taliban: Contemporary History of Afghanistan in Turmoil (Iwanami Shoten: 2022, in Japanese), A Portrait of “Crossroads of Civilizations”: The True Face of Afghanistan (Kobunsha: 2023, in Japanese) and so on.


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