Earlier this week, India suffered a foreign policy set back of unprecedented proportions, as Iran announced that it was ‘dropping’ India from the Chabahar-Zahedan Railway line project. The importance of this news, and its relevance to Pakistan’s economic and security interest, cannot be overstated. Simply put: India’s Chabahar deal was the gravest long-term threat to Pakistan’s internal security, regional comity, and economic wellbeing. And being ‘dropped’ from Chabahar is, without a doubt, the biggest foreign/strategic policy debacle that India has had to face in recent memory—yes, even more significant than loss of territory in Ladakh.

Let us try and understand what the Chabahar deal was, how it impacts Pakistan as well as the region, and what exactly has India lost in Chabahar.

In 2016, as Pakistan was still taking one step forward and two steps back in CPEC, India signed an enormously significant deal with Iran and Afghanistan, to develop the Chabahar port in Iran, and connect it to Afghanistan (and beyond) through railway route. This was India’s answer to CPEC; a convenient route for India to access the markets of Central Asia and Europe, without having to go through Pakistan.

India moved quickly to establish its presence in Chabahar. However, the rest of the planned projects, including the Chabahar-Zahedan railway line, were needlessly delayed by the Indian authorities. Despite getting a ‘sanction-free’ status for Chabahar from the US, India acted timidly, and did not fulfil its financial commitments towards the project. It delayed funding, created bureaucratic hurdles, and hid behind (non-existent) threats of sanction from the US. Over time, it seemed that India was more interested in establishing its (spy) presence in Chabahar, instead of making the requisite strategic investments in Iran’s infrastructure projects.

As India dilly dallied with Iranian authorities, China seized the opportunity. This week, in papers leaked to the NY-Times (and not denied by Iran), it was revealed that Iran and China were in the final stages of signing a comprehensive 25 years, which would entail China investing $400 billion into Iran’s infrastructure and development projects. Specifically, at the heels of this deal, Iran decided to cancel its commitments to India, and decided to ‘drop’ India from some of the agreed upon strategic projects (e.g. the Chabahar-Zahedan Railway). Instead, such projects would now be conceived as part of Iran’s comprehensive strategic partnership with China.

So, what is the real impact of Iran’s proposed deal with China; and, importantly, what, in material and strategic terms, is its cost to India?

First: India is on the cusp of losing its prized trade route to Afghanistan, and onwards to Central Asia and Europe. India’s dream of expanding India’ trade tentacles to these regions, with the hope of replacing China has the world’s factory, is now in tatters. Without Chabahar, and the consequent rail route to Afghanistan, India is ‘locked away’ from Central Asia and Europe. Any trade or investment routes with these regions, now have to transit through Pakistan. Alternatively, India will have to use the long-winded international maritime routes, around Africa, to get to Europe. At best, it can hope for a trade route through Africa and the Middle East, which will also be exponentially more expensive and cumbersome. Not to mention that any such plan will first have to be conceived anew, then formalised between multiple nations, and planned in manner that avoids entanglement with China. At the moment, this seems implausible.

Second: India’s dream of ‘bypassing’ Pakistan, skipping over it, and directly establishing rail routes with countries on our western border and beyond, will not have to be scrapped. This ‘bypassing’ of Pakistan was part of India’s overall foreign affairs goal of completely isolating Pakistan from the rest of the world. If Pakistan is not part of the trade routes in South Asia, then there would be no reason for foreign investments to come to Pakistan, or for the world to see Pakistan as a plausible trading partner. After being ousted from Chabahar, India’s geographic access to Central Asia and beyond cannot be realised with an ‘isolated’ Pakistan in the middle.

Third: Chabahar and its connected infrastructure was part of India’s bid to undermine CPEC. With the Chabahar-Afghanistan route, CPEC will no longer be the only real access of Central Asia to the Indian ocean. Through Chabahar, countries in Central Asia and Europe could ignore Pakistan’s CPEC, and still have quick access to the oil fields of the Middle East, and the maritime trade routes in the Indian ocean.

Fourth: Not only was Chabahar’s alternative route designed to undermine CPEC economically, but also physically, by providing a convenient intrusion into Balochistan. As India gained a controlling interest and presence in Chabahar, along with connecting routes to Afghanistan, it used its presence in the region to sponsor terrorist activities in Balochistan. Most of the BLA fighters, perpetrating terrorism in Pakistan, were funded by India through its operations in Chabahar. India’s objective, through such sponsoring of terrorism, was to fan violence and insurgency in Balochistan, thereby casting a debilitating shadow over the security and viability of CPEC routes.

Fifth: Even away from BLA fighters, India had hoped that its Chabahar operations would provide a convenient sanctuary to destabilise the overall security in Pakistan. This is not merely a claim; after all, Kulbhushan Yadev, the Indian spy who admitted to carrying out terrorist activities across Balochistan and Karachi, was stationed in Chabahar. According to India’s own pleadings before the ICJ, Kulbhushan Yadev “was a private businessman, running his company under the name of ‘Kaminda Trading’ in Chabahar, Iran.” And from there, he played an instrumental role in infiltrating Pakistani borders, and orchestrating violence across Balochistan and Karachi. Even Uzair Baloch—when he ran away from the operation in Karachi—was (admittedly) kept by hostile agencies in Chabahar. Well, none of that can happen anymore. Certainly, not as brazenly as it was being done over the past few years, when India held a dominant presence in Chabahar.

Sixth: Chabahar, and its connected route, was also meant to serve Indian interests in Afghanistan. Specifically, through Chabahar, India could provide material and financial support to its proxies across Afghanistan, including various elements in NDS and the Ashraf Ghani regime. Chabahar, over the past few years, had provided India with a strategic advantage of accessing Afghanistan, without having to go through Pakistan. As such, Pakistan could not monitor or intercept India’s supply line to its interest in Afghanistan. All Indian consulates in Afghanistan were manned and supplied with resources, without ever crossing Pakistani territory, airspace or naval belt. As a result, India could strengthen its hold on Afghanistan’s (puppet) government, propagate its interest in the region, and continue to support terrorist infiltration of Pakistan, through the Afghan border, without providing any opportunity for Pakistan to intercept such activities. No more.

Seventh: Chabahar was also going to provide Indian Navy an opportunity to station troops no more than 100 Km from Gwadar. As such, India had planned to use this ‘strategic depth’ as a constant threat against the borders and security of Pakistan’s coastal regions. Furthermore, through such presence, India could also conveniently sabotage (if not block) shipments in and out of Gwadar, thereby choking CPEC, and causing enormous loss to Pakistan’s economic and regional interest.

Eighth: Chabahar port was going to provide India with an economic and military presence at the mouth of the Persian Gulf, from where almost 70 percent of the world’s oil is transported. This presence, over time, would have made India a real stakeholder in global trade policies, and the international economic paradigm. Just as importantly, this presence would have furthered India’s plans of regional hegemony, and fulfilled part of its international commitment to ‘contain China’. Now, after being dropped from Iran’s infrastructure plans around Chabahar, none of these goals seem achievable in the short or medium term, thereby forcing India to renege on its (tacit) commitment to contain China in the Persian Gulf and the Indian Ocean.

Iran’s decision to ‘drop’ India from Chabahar, and enhance its strategic ties with China, will have far-reaching consequences for Pakistan and the region beyond. Experts claim that this may be China’s first of many (planned) economic intrusion in the Middle East. If that happens, it would decisively shift the regional balance of power, and solidify the prospects of an impending ‘Chinese Century’.