India’s Overseas Port Investment | 17 Feb 2025

Source: TH 

Why in News? 

The US released a Memorandum enforces "maximum pressure" on Iran, specifically mentioning  Chabahar Port.  

• This raises concerns over India’s overseas port investments and trade, potentially impacting its geostrategic and economic interests in the region.

What are India's Major Overseas Port Investments? 

• Haifa Port (Israel): It enhances India-Israel trade, security ties, and Mediterranean connectivity. 
• Mongla & Chittagong Ports (Bangladesh): Improves India-Bangladesh trade, transshipment, and Northeast connectivity, reducing transport costs. 
• Duqm Port (Oman): Strengthens India's Gulf presence, naval operations, and energy security. 
• Sittwe Port (Myanmar): Part of the Kaladan project, boosting connectivity to Northeast India and ASEAN while reducing dependence on the Siliguri Corridor. 

• Sabang Port (Indonesia): India and Indonesia are collaborating on Sabang Port near the Malacca Strait.. 

• Trincomalee & Kankesanthurai Ports (Sri Lanka): Enhancing trade and passenger connectivity, strengthening India-Sri Lanka maritime ties. 

What is the Significance of India's Overseas Port Investment? 

• Geopolitical and Strategic Importance: India’s overseas port investments counter China’s BRI dominance (e.g., Gwadar, Hambantota) by securing key maritime routes.  
  • Ports like Chabahar (Iran) and Colombo (Sri Lanka) enhance regional connectivity, bypass hostile routes, and strengthen trade with Central Asia.  
  • Strategic locations like Duqm (Oman) provide military and logistical advantages, bolstering India’s maritime security and influence in the Indian Ocean. 
• Economic and Trade Benefits: India’s overseas port investments enhance trade routes (e.g., Chabahar, Haifa), reducing transit costs and improving supply chain efficiency.  
  • They facilitate access to landlocked markets in Central Asia and Africa, expanding trade opportunities.  
  • Additionally, these investments strengthen bilateral ties, fostering long-term economic and diplomatic partnerships. 
• Securing Energy: It also ensures energy security by controlling key transit points in the Indian Ocean Region (IOR), safeguarding vital oil and gas imports.  
  • They also mitigate supply chain disruptions by providing alternative routes (e.g., Chabahar), reducing vulnerabilities from regional conflicts or blockades. 

What are the Challenges in Overseas Port Investments? 

• Geopolitical Risks: China’s investments in Gwadar and Hambantota have driven India to expand maritime projects, but political shifts in host nations, like Sri Lanka, impact investment stability.  
  • Additionally, terrorism and conflicts, such as Taliban attacks on Indian workers in Chabahar and Myanmar’s instability affecting Sittwe Port, pose security challenges. 
• Sanctions & Regulatory Hurdles: US sanctions on Iran restrict Chabahar Port’s operations, impacting India’s regional connectivity. 
  • Additionally, Western scrutiny of India’s partnerships in sensitive regions creates geopolitical pressures on investment decisions. 
• Internal Policy Debates: There is an ongoing discussion on whether state-owned India Ports Global Ltd (IPGL) or private entities should spearhead overseas port investments.  
  • Additionally, concerns over transparency and accountability in awarding contracts and managing projects persist. 

Way Forward 

• Diplomatic & Strategic Partnerships: India should deepen diplomatic engagements to secure new port investments in East Africa, Indonesia, and South Asia while strengthening ties with Western allies to facilitate joint ventures and counterbalance China’s influence. 
  • India should seek Chabahar sanctions waivers by emphasizing its role in Afghan reconstruction while diversifying trade via INSTC to reduce dependency on it. 
• Enhancing Regional Influence: India should position itself as a credible alternative to Chinese debt-trap diplomacy in South Asia. Leveraging US backed investments in Sri Lanka can strengthen its maritime presence. 
• Balanced Investment Approach: India should adopt a hybrid investment model with state-run entities and private players while leveraging public-private partnerships (PPPs), sovereign funds, and multilateral support (ADB) for sustainable maritime infrastructure development.