Pact between India, Iran to counter China-Pak alliance: Report

New Delhi: The pact between India and Iran to develop the strategically located Chabahar port, along with the one with Afghanistan on road and rail network, will counter China and Pakistan's alliance in South West Asia, BMI Research said today.

"The agreement between India and Iran to develop the latter's port of Chabahar is a major boost for both countries, as well as Afghanistan. In particular, growing co-operation between the three countries will counterbalance China-Pakistan alliance in the geopolitics of South West Asia," it said.

Prime Minister Narendra Modi visited Iran earlier this week, the first by a Indian Prime Minister in 15 year.

A "milestone" pact on the strategic Chabahar Port in southern Iran, which will give India access to Afghanistan and Europe bypassing Pakistan, was among the agreements signed by India and Iran, which also agreed to cooperate on combating radicalism and terror.

Besides the bilateral pact to develop the Chabahar port, for which India will invest USD 500 million, a trilateral Agreement on Transport and Transit Corridor was also signed by India, Afghanistan and Iran, which Modi said could "alter the course of the history of the region".

The bilateral agreements signed by India and Iran after detailed discussions between Modi and President Hassan Rouhani included one on setting up of an aluminium plant and another on laying a railway line to give India access to Afghanistan and Central Asia.

BMI Research, a Fitch Group company, said the governments of India, Iran and Afghanistan have taken a significant step towards closer co-operation by signing an agreement on May 23 to develop Iran's southern port of Chabahar.

"Once the port is developed, it will provide a major boost for Indo-Iranian trade, and also provide a new route for Afghanistan's exports, bypassing Pakistan.

"In particular, the new port at Chabahar is designed to compete with Pakistan's port of Gwadar, which is being developed with Chinese assistance as part of the China-Pakistan Economic Corridor (CPEC)," it added.

CPEC in turn is part of a much bigger Chinese initiative known as 'One Belt One Road' (OBOR), which envisages new land and sea routes connecting China to Western Eurasia and East Africa.