Strategic Port Competition in the Indo-Pacific

With Chinese presence gaining strength in the Indian Ocean Region (IOR), India has strategically developed two critical ports projects namely, Chabahar in Iran and Sittwe in Myanmar in a bid to counter Chinese presence at Gwadar in Pakistan and Hambantota in Sri Lanka. Such maritime infrastructure is a key part of India as a whole of being more connected with the region, economic reach, and strategic counter to the Belt and Road Initiative (BRI) expansion of China.

Chabahar Port: To Central Asia

The Chabahar Port is the prime example of an overseas infrastructure project of India located in the Sistan-Balochistan province at the Gulf of Oman in southeast Iran. It has gigantic geopolitical and economical value as it gives India direct access to Afghanistan, Central Asia and Russia avoiding its historical enemy Pakistan.

On May 5, 2024, India and Iran agreed, in a 10-year contract on the operation of the Shahid Beheshti terminal in Chabahar, as India Ports Global Limited (IPGL) maintains its control. This was a very important milestone which also gave New Delhi a foothold on the region on a long-term basis. This marks the first instance of India gaining operating rights to run a port in a foreign country, which goes to reflect on further deepening of strategic relations between the two countries.

Strategic Significance

Avoiding Pakistan is another primary purpose of investing in Chabahar as it has repeatedly denied India land access to Afghanistan and Central Asia. With the help of Chabahar, goods produced in India can reach Iran and can later get transported by land or rail to Afghanistan and beyond.Chabahar is located only 170 km away in the west of Gwadar Port in Pakistan, one of the major nodes of the China-initiated Belt and Road Initiative (BRI). As China is building Gwadar as a part of the China Pakistan Economic Corridor (CPEC), India is availing Chabahar to maintain a check on China as it increases its maritime and regional presence gradually.

The port is a critical component in the International NorthSouth Transport Corridor (INSTC) which is a 7,200 km multi-modal transportation route that links India to Russia via Iran and Caspian sea. INSTC will shorten the shipping time by 30 percent and 40 per cent of the shipping cost as compared to its route across Suez Canal route, and hence Chabahar will be an economical gateway to trade with the region of Eurasia.

Economic and Humanitarian Role

Chabahar helps in trade of oil, gas and fertilizers and other products increasing the energy security and export of India. India has already shipped wheat and humanitarian aid to Afghanistan via the port. The port will connect India with Turkmenistan, Uzbekistan, Tajikistan, etc., and, in such a way, the port will support the implementation of its Connect Central Asia Policy.

It has also been deployed to deliver COVID-19 aid as well as food relief particularly in Afghanistan bolstering Indian position as a responsible regional power.

Challenges and U.S. Sanctions

Even though the Chabahar project has very good strategic advantages, it is quite challenging. U.S. Sanction sanction on Iran: U.S sanctions together with western sanctions have limited foreign investment into the Iranian infrastructure. Nevertheless, since Chabahar can ensure the stabilization of Afghanistan, the U.S. already approved sanctions waivers on India to operate at the port in 2018 and 2019.

The rail connection between Chabahar and Zahedan ( the Iranian city on the Afghanistan border) is not completed. The line was to be constructed with the help of an MoU that was signed between the Indian Railways and IRCON to construct the line; however, the slow pace of the project in Iran has come because of delays due to reasons of funding and bureaucratic procedures in Iran.

This region of Sistan-Balochistan is categorized as unstable with slight instances of insurgency and there is problem of security in the operation of ports.

The Road Ahead

India is determined to continue constructing Chabahar as an important conduit of connectivity in the region. The port may in the long-term act as a strategic location of:

·       India-Russia trade through Caspian Sea

·       The export of India to Europe and Caucasus

·       A depot of humanitarian logistics and maritime interaction

The withdrawal of U.S. troops in Afghanistan and the shifting balance in West and Central Asia have changed the scope of Chabahar as a regional project to the one that is aligned with Indian goals of connectivity, multi-polarity and economic strength in the long term.

Sittwe Port: Indian Mission to Southeast Asia

Being located at the mouth of the Kaladan River in the western coast of Myanmar in the Rakhine State, Sittwe Port is a strategic maritime infrastructure project that India developed as a part of its enormous Act East Policy. Being a strategic point in terms of connectivity to the Southeast Asia and a counterweight to Chinese leverage in Myanmar and Bay of Bengal, it is treated as a key point.

Historical and Political History

Hybrid of the port Jain has been the Kaladan Multi-Modal Transit Transport Project (KMTTP), a grandiose project which is paid and implemented by the Government of India. The project was signed with effect in 2008 and is actively pursued following the year 2010 with the establishment of:

·       A Sittwe deepwater port

·       Kaladan river inland waterway transport

·       Road links between Paletwa (Myanmar) and Mizoram (India)

India also signed an agreement with Myanmar back in 2015 on a five-year concession in which GTL Infrastructure Ltd, a privately owned Indian company was appointed to construct and operate the port infrastructure. Both Indian and Myanmar officials opened the port in May 2023 which is a significant milestone toward the activation of the whole corridor.

Sittwe port will limit the overdependence of India on the Siliguri Corridor (Chicken Neck) by giving her another way to the North East via the Sea-River-Road Intermodal combination. This has especially been achieving importance in regard to trade and development in Mizoram, Manipur and other states in northeast indeed.Strategically, it gives India a second water access to Southeast Asia to minimize the reliance on the chokepoint and the congested Malacca Strait, which is patrolled by Chinese naval forces.

It explicitly supplements the whole Indo-Pacific approach and India Act East Policy, creating actual connectivity between India and the ASEAN countries, in particular, Thailand and Vietnam, and maybe combining with the IndiaMyanmarThailand Trilateral Highway. Opposed to the Kyaukpyu Port in China: China Belt and Road Initiative (BRI) also encompasses the mega Kyaukpyu Deep-Sea Port, which is only ~200 km south of Sittwe. On one hand, Kyaukpyu helps Chinese to access Bay of Bengal, but on the other, India is investing in Sittwe to form a counterweight presence in the region.

Technicality and Real Life Situations

In spite of this prospect, the Sittwe project has a number of roadblocks. The Rakhine State has political instability and ethnic related issues (such as the Rohingya crisis), and any disruption of the safe operation of the port and related inland connections is an issue. Slow development of Paletwa Zorinpui road leading through Pallenpale township in hilly areas has contributed to the negligence of the infrastructure development in these sectors in the past; however, this has taken a toll due to topographical hilly terrain and insurgency in Chin State.

The military coup in Myanmar in 2021 put tension in the relations of the countries and threw doubt over the cooperation in the infrastructure sector, even though India was mostly still working on the functional level.

China’s Gwadar and Hambantota Ports

The possession of Gwadar and Hambantota Ports by China is a crucial part of the regional policy of Beijing. The Gwadar, which is on a 40-year lease between China and Pakistan under the China-Pakistan Economic Corridor (CPEC), also provides a direct route to the Arabian Sea and in effect, a bypass of the Strait of Malacca that was serving as the supply route of Chinese energy imports. In a similar, though time-wise preceding act, Hambantota Port was leased to a Chinese firm in a 99-year deal, it has become central to what is being called the String of Pearls strategy by Beijing to protect maritime supply routes and enhance naval deployment in the Indian Ocean. The leases have been criticized by observers as a form of debt-trap diplomacy, and by extension strategic encirclement concerns in the defence circles in India.

Japan’s Patimban Port investments

The Patimban Deep Sea Port is located in Subang Regency, West Java, about 145km east of Jakarta and 70km of Karawang Industrial Estate, which is the hub of the activities of Japanese automotive companies. It is a strategic national infrastructure project that is aimed at alleviating pressure at the port of Tanjung Priok, improving logistic efficiency, and boosting the exports capacity of Indonesia. It started construction in 2018 as a multi-phase project:

Phase I (accomplished in December 2020) entailed the development of a car terminal that has a maximum capacity of 218,000 vehicles per annum and a container terminal with a maximum capacity of 250,000 TEU. Phase II (which is in progress) will add capacity to 600,000 vehicles and 3.75 million TEU by deepening and further improving infrastructure. Phase III (being developed) is planned to complete with complete build-out to 7.5 million TEU and strong hinterland connectivity by 202728.

The estimated cost is a total of US$3.29 billion (~43 trillion IDR), of which the Japanese ODA funds the majority of it, such as 118.9 billion Yen (Phase I), 70.2 billion Yen (Phase II), and an extra 83.4 billion Yen (approved in January 2025).

Japan is guaranteed a high operational position as a result of a public-private partnership. Toyota Tsusho, a member of the Toyota Group, runs the car and future container terminals in a subsidiary, PT Patimban Global Gateway Terminal (PGT). PGT has shareholders that are Africa Global Logistics (45 %), Toyota Tsusho (34 %) and Samudera Pelabuhan of Indonesia (21 %) with the aim to be in fully operational container services by 2026 and a total capacity of 3.75 million TEU/year. In August 2023, the car-terminal operator (PICT) will be transferred to a consortium, in which Toyota Tsusho (34 %), Toyofuji Shipping (26 %), NYK (25 %), and Kamigumi (15 %) participate.

TOA Corporation, Wakachiku, and Penta-Ocean are all Japanese construction companies that operate in the same consortium, and use high-tech ground-improvement methods through STEP contracts. Through this structure, Japan not only provides expertise and funds, but Indonesian ownership is also preserved by the state-owned infrastructure such as Pelabuhan Patimban Internasional (PPI).

With the strategic location in the Indonesian and regional maritime logistics, Patimban Port has an important role in maritime logistics of Indonesia. Its economic impacts are tremendous: decongestion of Tanjung Priok, which is the major port serving the manufacturing regions of Java, and reducing logistics cost of the manufacturing industry. An expressway or dedicated toll road-37km long- is to be constructed to provide direct connection between the port and highway network in Jakarta, thus providing multi-modal access without any interruption. The new infrastructure also highlights the aspirations of Indonesia in the car industry: the car-handling capacity of the port is expected to be 600,000 units by mid-2025, and the cooperation of Japanese car manufacturers and Indonesian partners of the industry plays a major role.

Geopolitically, Patimban also strengthens the Japan-Indonesia strategic partnership, which fits into Tokyo Indo-Pacific vision and its investments in the critical infrastructure of Southeast Asia. The project increases the regional influence of Japan by providing an alternative development model to the Chinese Belt and road projects at the ports in Asia. In a broader sense, the port enhances resilience within the broader shipping system by reducing the single node capacity of Tanjung Priok.

The present stage of building construction which was launched by Japanese Official Development Assistance (JICA) is in progress with mixed-nationality Japanese-Indonesian contractors. It will be completed in 2027 and container operations will start one year earlier. JICA has also committed a series of enhancement loans totalling 272.5billion Yen (approximately US$2billion) to deepen berths, increase terminal areas, improve access roads and improve ground stability via Japanese STEP programs.

It is anticipated that there will be a rapid increase in scale of operations. By the mid-2025, the automotive terminal is expected to have a capacity that can handle up to 600,000 units of vehicles per year whereas projected container capacity is expected to increase to multi-million TEU capacity by the mid-2025, having started with the initial 250,000 TEU.

Micro and Macro-Level Governance in Patimban Port: Strategic Value and Critique

The large-scale involvement of Japan in the Patimban Port project is a complex approach, combining both the macro-level system of the country and the micro-level mechanism. When these layers are working in unison, they do not only strengthen the operational efficiency and economy sustainability of the port, but also enhance its geopolitical relevancy. But the venture is not perfect and flawless.

Macro-Level Governance: 

On the macro level, the Patimban project fits into:- the National Strategic Plan in Indonesia decentralizing maritime logistics, and avoiding reliance on Tanjung Priok Indo-Pacific Strategy of Japan that puts emphasis on quality infrastructure, maritime security and strategic independence of China Belt and Road Initiative.

It enhances bilateral relationships by being strategically economically interdependent. Increases local trade lines and investment levels, especially in automotive and manufacturing exports. Japanese model of the Official Development Assistance (ODA) focuses on transparency, sustainability of debts and technology transfer, unlike Chinese debt diplomacy.

However, critics argue that, being over dependent on Japan would mean marginalizing the local industrial and logistical players in case such dependency is not managed. Complex Intergovernmental Coordination: National policy-regional government co-ordination in West Java can be administratively maze-like, particularly, in the areas of land acquisition and toll-road integration.

Micro-Level Governance

Operations, local ecosystem, and stakeholder-involvement on the micro level, the governance of Patimban is focused on. Joint operations between the government and the privates, like the case of Toyota Tsusho that is a stakeholder in the car terminal and the container terminal consortium, which is headed by Africa Global Logistics. Participation in the local labour markets, the hinterland logistics providers, and the efficiency in digital port management systems. Capacity-building which included Japanese trainings in port logistics, vessel handling and automation.

Promotes localized jobs and technology spreading in the Indonesian maritime economy that is growing. Efficiency in the private sector protects competitive turnaround times and container throughput on a global basis. Makes sure that Indonesian operators (e.g. Pelabuhan Patimban International) have control over sovereign infrastructure.

Patimban Port is a Japan-funded mega infrastructure project in the rural part of West Java, but it is still not able to maximize its strategic potential due to a number of weaknesses. For instance, the Disjointed Local Involvement. There has been inconsistent and poor stakeholder consultation on matters that concern compensation, land-use choices and environmental mitigation. The level of road-construction delays and poor multimodal connections is jeopardizing the possibility of the port becoming congested, despite its vast physical capacity. There is a high reliance on overseas operators that poses a threat to localize skills and operational expertise.

Overcoming these obstacles requires holistic approach, which will protect macro level interests of the port and micro level requirements of local economies and governance structure. On a macro level, Patimban has to be incorporated into the overall ASEAN logistics system the ASEAN Highway and RCEP supply chains and the project has to be isolated against political instability. On a micro level, Indonesia should speed up the creation of road and rail connections, and Japan should focus on capacity building and inclusive development projects to act against the feeling of foreign dominance.

The Indo-Pacific is quickly becoming a theatre of geopolitical conflict, most notably with the projects that are based on the improvement of port infrastructure. The Indian plans in Chabahar and Sittwe can be seen as purposive responses to the growing Chinese maritime presence, such as Gwadar and Hambantota, as parts of China Belt and Road Initiative (BRI). Chabahar, specifically, provides New Delhi with a safe route to Afghanistan and Central Asia without passing through Pakistan, and Sittwe will extend India further eastwards through Southeast Asia and strengthen regional connectivity in its northeast. All these port projects are in effect aimed at creating a sort of a Necklace of Diamonds that can counteract the Chinese String of Pearls.

At the same time, the investment of Japan in the Patimban Port in Indonesia gestures a different method of investing on high-quality construction, capacity building at the local level and sustainability. With the help of large Japanese official development assistance and public-private partnerships, Patimban aims at supporting regional trade, especially in automotive exports, and strengthening Tokyo strategic relationship with Southeast Asia.

On the macro level, the reviewed projects of the ports support national strategic imperatives, namely facilitating regional connectivity, jumpstarting trade, and increasing geopolitical power. On the micro level, however, their success is based on a high local involvement, the smooth involvement of the logistics, and the equal distribution of the economic benefits.

To conclude, competition in the Indo-Pacific maritime ports is not merely a matter of finances, but it is the necessity of establishing influence, maintaining stability, and developing resilience. The port projects of India and Japan offer realistic alternatives to Chinese hegemony and help achieve a more multipolar and balanced regional order.

References:

·        Wion News. 2024. "India, Iran Sign 10-Year Deal for Chabahar Port.” https://www.wionews.com/videos/india-signed-10-year-deal-with-iran-to-operate-chabahar-port-trump-scraps-waiver-8697832.

·        Indian Express. 2024. "Chabahar Port Deal: Strategic Stakes for India." May 14, 2024. https://www.shankariasparliament.com/current-affairs/indias-stakes-in-irans-chabahar-port

·        International North-South Transport Corridor (INSTC). 2023. "Overview and Trade Potential." Government of India, Ministry of Commerce. https://commerce.gov.in/international-trade/instc/.

·        Hindustan Times. 2025. “Chabahar Port Capacity to Be Expanded, Linked to Rail Network by mid‑2026.” Hindustan Times, [May 2025]. https://www.hindustantimes.com/india-news/chabahar-port-capacity-to-be-expanded-linked-to-rail-network-by-mid2026-101748344266703.html

·        Sonowal, Sarbananda. 2025. “Kaladan Project to Be Operational by 2027, Will Unlock Trade Opportunities: Sonowal.” The Times of India (Guwahati), July 7, 2025 https://timesofindia.indiatimes.com/city/guwahati/kaladan-project-to-be-operational-by-27-will-unlock-trade-opportunities-sonowal/articleshow/122304171.cms 

·        Chaudhury, Dipanjan Roy. 2025. “India Working with Stakeholders to Safeguard Port in Myanmar.” Economic Times, March 22, 2025. https://economictimes.indiatimes.com/industry/transportation/shipping-/-transport/india-working-with-stakeholders-to-safeguard-port-in-myanmar/articleshow/119315770.cms

·        Mohan, Geeta. 2023. “India-Financed Sittwe Port Opens in Myanmar, Countering China’s Connectivity Projects.” India Today, May 11, 2023 https://www.indiatoday.in/india/story/india-financed-sittwe-port-myanmar-chinas-connectivity-projects-2377650-2023-05-11

·        Peri, Dinakar. 2024. “Amid Raging Fighting in Myanmar, 100th Shipment from India Reaches Sittwe Port.” The Hindu, July 21, 2024.   https://www.thehindu.com/news/national/amid-raging-fighting-in-myanmar-100th-shipment-from-india-reaches-sittwe-port/article68426953.ece

·        De, Prabir. 2023. “Operationalisation of Sittwe Port and the Way Forward.” Hindustan Times, May 23, 2023 https://www.hindustantimes.com/ht-insight/economy/operationalisation-of-sittwe-port-and-the-way-forward-101684823806894.html

·        Japan International Cooperation Agency (JICA). 2025. “Strengthening the logistics function of the Jakarta metropolitan area through the development of Patimban Port.” JICA Press Release, January 13, 2025. https://www.jica.go.jp/english/overseas/indonesia/information/press/2024/1559999_53433.html

·        DredgeWire. 2025. “Japan Provides Rp8.5 Trillion Loan to Develop Patimban Port.” DredgeWire, January 13, 2025. https://dredgewire.com/japan-provides-rp8-5-trillion-loan-to-develop-patimban-port/