Modi's Play in Iran and Afghanistan

Last month, Indian Prime Minister Narendra Modi inked a major transport corridor deal with Iran and Afghanistan. According to the terms, India will provide $500 million to develop a port in the southern Iranian city of Chabahar. New Delhi also pledged to invest $16 billion in a free trade zone around the city. Additionally, there will be new roads and a railroad stretching northward from Chabahar to the Afghanistan border. The objective is to generate new trade routes to and from Afghanistan, Central Asia, and beyond.

Admittedly, these investments are small potatoes compared to China’s competing $46 billion economic corridor project next door in Pakistan, which includes the development of the Gwadar port in the Baluchistan province, just 60 miles from Chabahar. The Chabahar deal may be modest in scale; however, its geopolitical ramifications are enormous.

Iran, making good use of its new post-sanctions status, could become a gateway to the critical sea lanes to its south and the highly coveted markets to its north. Afghanistan could host flourishing northward and southward trade routes. And India, long denied transit rights by Pakistan, could have direct land access to Afghanistan and Central Asia for the first time since Partition. In short, the deal is both history making and history defying.

The accord also helps advance U.S. interests, and Washington should therefore embrace it. However, because of Iran’s involvement, the Western reaction to the accord has been muted. When asked about it at a May 24 Senate hearing, Nisha Biswal, the assistant secretary of state for South and Central Asia, was neither critical nor complimentary, saying only that the government is examining it to ensure that it does not violate remaining U.S. restrictions on activities with Tehran.

When U.S. President Barack Obama meets Modi in Washington on Tuesday, he should express his unequivocal support for the deal—and propose ways to help achieve its potential.

The deal is both history making and history defying.

The Chabahar deal could benefit two of Washington’s key South Asian friends in a big way. First, it gives India the opportunity to tap into the vast natural gas riches of Central Asia. Additionally, with a stronger foothold in Iran, New Delhi will be better positioned to tap into Iran’s own gas reserves. These are big developments for a country that witnessed a doubling in natural gas consumption between 2000 and 2012 and that increasingly relies on imported natural gas to meet domestic demand. According to Indian economists, meanwhile, if India is to return to double-digit growth in the coming decades, it will require a three- to fourfold increase in energy supplies. The Chabahar deal, by boosting India’s energy security, can help meet the needs of its growing economy and help facilitate its transformation into a great power.

Second, the deal could bring Afghanistan badly needed new sources of revenue. The Afghan economy, which relies heavily on foreign assistance, is gasping for air. The foreign troop drawdown has reduced Afghanistan’s once-strong war economy, and international donors are starting to back away. Yet according to Afghan government figures, a fully operational Chabahar port could generate trade volumes for Afghanistan totaling in the billions of dollars. For context, in recent years, Afghanistan’s total annual operating budget has been less than $8 billion.

Finally, the Chabahar deal could help all four countries by building the trust necessary to generate more meaningful trilateral cooperation on challenges like ISIS and the Afghanistan drug trade—issues of great concern to all involved.

When Obama meets Modi, he should thus assure his counterpart that remaining U.S. sanctions on Iran will not cause problems for this deal. Obama should also underscore his awareness that the deal is fully economic in nature, with no military cooperation, and therefore doesn’t raise any red flags.

In reality, India will likely plow ahead with the transport corridor regardless of what Washington says. Still, the United States’ explicit support would deliver a big boost to U.S.-Indian relations. New Delhi often believes that Washington fails to appreciate its contributions on the world stage. And so an endorsement of the deal would telegraph Washington’s support for—and awareness of—India’s important global footprint.

U.S. support for the deal would also send a conciliatory message to Tehran. Siding with Iran in ways that extend beyond nuclear cooperation would generate some much-needed goodwill—and give Tehran something to chew on as it contemplates its future relationship with the Taliban. Suspicion about American designs in Afghanistan has fueled Tehran’s support for the Taliban, to which it provides small arms and money. Any additional U.S.-Iranian cooperation, even if modest, can be helpful to U.S. interests in Afghanistan.

 The Chabahar deal could help all four countries by building the trust necessary to generate more meaningful trilateral cooperation on challenges like ISIS and the Afghanistan drug trade—issues of great concern to all involved.

Admittedly, the Chabahar project faces numerous obstacles. One, courtesy of India, is pure inertia—an inability or unwillingness to get a lumbering bureaucracy to swing into action and implement major infrastructure projects. A transport project meant to link northeastern India with Burma was projected to be started three years ago, but it remains years from completion. Washington should encourage New Delhi not to squander this opportunity to prove its bonafides as a significant global actor—a message that would resonate well with India, given its view that the United States doesn’t sufficiently appreciate its rising global profile.

Another major roadblock is Afghanistan’s perilous security situation. With the Taliban controlling more territory now than at any time since 2001, the notion of carving out new trade routes on Afghan soil borders on the fanciful. Here, Washington can do its part by ensuring a continued U.S. residual troop presence. Additionally, Washington could help Afghanistan cover the costs of providing security for development projects along the transport corridor.

Washington is no stranger to supporting risky infrastructure projects in the South-Central Asia region. It is a robust champion of an ambitious gas pipeline project involving Turkmenistan, Afghanistan, Pakistan, and India. Ground has already been broken for the project, but it is arguably more of a long shot than Chabahar because it entails India-Pakistan cooperation—a tall order, particularly over a resource as precious for the two energy-starved rivals as natural gas.

U.S. backing for the Chabahar project doesn’t mean it should oppose China’s infrastructure investments in Gwadar and elsewhere in Pakistan. In fact, both investments would serve U.S. interests: more infrastructure and connectivity in Afghanistan, Pakistan, and Central Asia, resulting in more employment, development, prosperity, and, above all, stability. Despite much rhetoric about working toward these goals itself—the State Department has articulated a vision for a “New Silk Road” in South and Central Asia—Washington has done relatively little (an exception is its financial support for CASA 1000, a power transmission project involving Afghanistan, Kyrgyzstan, Pakistan, and Tajikistan inaugurated last month). With China, and now India, in position to do much more in the region, Washington can, in effect, free ride off their investments. Both India’s and China’s projects help advance U.S. objectives that Washington is unable or unwilling to pursue on its own.

Still, Chabahar is particularly deserving of unfettered U.S. support. With Washington and New Delhi keen to deepen ties as the U.S. presidential election nears, U.S. backing for a major Indian infrastructure project—and particularly one involving Iran—would demonstrate the depth of U.S-Indian friendship.

Indian officials have said that celebration and consolidation will be the watchwords of Modi’s trip to Washington. Here’s hoping another "C" word—Chabahar—is seen and heard during the visit, as well.

The opinions expressed here are solely those of the author.

This article was originally published in Foreign Affairs.