China and India are locked in a global energy game that is being played out via ports in nearby nations. For China the goal is expansion. For India, avoiding encirclement by its larger neighbour.
As China develops Gwadar port in south-western Pakistan, Chabahar port in south-eastern Iran is filling India’s strategic need. And while both projects have been in the works for years, yet more years – and more hundreds of millions of dollars – will be required before the plan for either is fully realised.
Gwadar’s port has not yet undergone significant development on the infrastructure side, and is still without road and rail links with the rest of Pakistan. The port’s traffic has been restricted to bulk cargo such as wheat and urea since 2008. China, however, plans to invest US$10 billion to make the port fully functional. Last year, it also signed a deal to build an $18bn economic corridor linking Gwadar to Kashgar in China’s north-western Xinjiang province.
Also last year, India’s then-minister of external affairs, Salman Khurshid, paid a visit to Tehran and expressed hope that the upgrading of Chabahar’s port would be complete within two or more years. India also provided Iran with $136 million to aid work linking Chabahar to Afghanistan’s main road network.
In this drawn-out contest, the battle lines are the trade routes to the oil-rich Middle East and energy-rich Central Asia. The winner will be whoever gains the most secure access to these resources.
For India, Chabahar is the nearest port to the Indian Ocean providing direct access to the Middle East and Central Asia. The port is an economic gateway thanks to its location on the Gulf of Oman outside the Strait of Hormuz.
For China, Gwadar could be a terminus for pipelines in its oil and gas supply chain from Africa and the Middle East, allowing it to bypass the congested pinch point that is the Strait of Hormuz.
Presently, China imports oil from the Middle East using the Dubai-Shanghai-Urumqi route covering more than 10,000 kilometres, which would be shortened to 3,600km through the proposed Dubai-Gwadar-Urumqi route. Gwadar also brightens the prospects for a pipeline corridor bringing oil and gas to China from the Middle East.
Last year, Pakistan transferred operational control and management of Gwadar port from a Singaporean company to China Overseas Port Holdings. That made China simultaneously the port’s builder, financier and operator. The development raised eyebrows in New Delhi, which regards the Chinese presence in Gwadar as a threat to its strategic interests in the Indian Ocean. India is wary of the so-called “String of Pearls” being built by China through its neighbourhood. Besides Gwadar, China has also funded Hambantota port in Sri Lanka and Chittagong port in Bangladesh. What continuously haunts India is the idea of encirclement by China. India controls no chokepoint on the coastline of the subcontinent through which international shipping must pass.
India is developing a north-south trade corridor from Central Asia to Afghanistan through Chabahar, from where goods could be shipped by sea to India. Through the proposed corridor, India plans to establish its foothold in Central Asia to tap that region’s huge energy reserves without using the Afghanistan-Pakistan route. It is an irony of geography that India cannot have access to Afghanistan, Iran and Central Asia through land without traversing Pakistani territory. To this end, New Delhi in 2000 signed deals with Iran and Russia to develop Chabahar port and a north-south trade corridor to link India to Central Asia through Iranian ports and Afghan roads.
Source: http://www.thenational.ae/business/energy/india-and-china-in-race-to-develop-energy-ports