Japan ‘cautious’ about investing in Chabahar port

New Delhi: Once thought to be keen on investing in the strategic Chabahar port development project in Iran, Japan now seems to be hedging its bets.

A person familiar with the developments said Japan was “cautious” about investing because of fresh sanctions imposed by the US on Iran in July for its suspect nuclear energy programme. In October, US President Donald Trump refused to certify that Iran was abiding by the spirit of a 2015 interim agreement between Iran and the international community that saw some sanctions on the Shia country being lifted.

“Japan has to think in terms of US sanctions,” said the person cited above who did not wish to be named.

On Sunday, Iranian President Hassan Rouhani inaugurated the first phase of Chabahar port—known as the Shahid Beheshti port. It is expected to help India and Afghanistan overcome difficulties imposed by Pakistan to trade directly with each other. In October, India sent a consignment of wheat to Afghanistan via Chabahar marking the first use of the facility for moving a shipment to Afghanistan.

Besides Japan, other countries that have shown interest in developing and investing in Chabahar include South Korea and China, which has already developed the Gwadar port in Pakistan as a key link in its ambitious Belt and Road Initiative.

According to Indian analysts, Japan’s participation would have brought more political clout to the project. Besides, it would have also helped speed up the implementation of the project given Japan’s participation as a foreign collaborator.

For India, Chabahar port, situated in the Sistan-Balochistan province of Iran and lying outside the Persian Gulf, is considered as a gateway for trade with central Asian countries.

Though India and Iran first agreed to develop Chabahar in 2003, it was only in May 2016 during Prime Minister Narendra Modi’s visit to Tehran that the two countries signed a deal under which India is to equip and operate two berths in the first phase with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease. Analysts say the delays were due in the first instance to the fact that India was keen to tie up a civil nuclear deal with the US and later due to the tough international sanctions imposed on Iran.

On its part, Japan had previously shown interest in the project with Kenji Hiramatsu, Japan’s ambassador to India, being cited in news reports as saying that the Asian country was keen on collaborating with India on projects in Asia and Africa. He had said the Japanese government was in talks with Tehran and New Delhi for a role in the Chabahar port project along with India.

“We are interested in connectivity projects and to make sure that this region is free and open and an important port like Chabahar is good for regional connectivity... I can’t tell when it will materialise, but we have expressed our interest,” Hiramatsu was cited as saying.

An indication that Japan maybe re-evaluating its position came when the project failed to find a mention in the India-Japan joint statement issued after talks between Japanese Prime Minister Shinzo Abe and Prime Minister Narendra Modi in September.

“Japan is more susceptible to US pressure being a military ally of the US,” said Dilip Sinha, a former Indian diplomat who was in charge of the Iran desk.