Singapore may eye Chabahar Port to create trade & transit corridor between SE Asia & C Asia

In May last year, when the then Singapore President visited Kazakhstan, the two sides had decided to put in place a trade and transit corridor between the two states which would connect Eurasia with the SE Asian market. In 2019, Singapore had signed an FTA with the EAEU.

An important result of the 2023 Presidential visit was the signing of an agreement on trade in services and investments within the framework of the FTA between the EAEU and Singapore. The document is intended to create more favorable conditions for doing business by simplifying regulatory processes and reducing barriers. Vietnam, another emerging economy, too has entered into an FTA with the EAEU.

The Chabahar port management deal between Iran and India was signed on May 13. In December of 2018, India Ports Global Ltd (IPGL) through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of the Chabahar Port. Since then, it has handled more than 90,000 TEUs of container traffic and more than 8.4 MMT of bulk and general cargo.

IPGL plans to invest about 120 million USD in equipping the port. India has also offered a rupee credit window equivalent to USD 250 million for mutually identified projects aimed at improving Chabahar-related infrastructure, officials said. The port is India’s key connectivity link to Afghanistan, Central Asia and the larger Eurasian space. There are plans to link the Chabahar Port with the International North South Transport Corridor (INSTC) that connects India with Russia via Iran. Kazakhstan and Uzbekistan are keen to utilise the Chabahar port to access the Indian Ocean Region and the Indian market.

Amid the new geopolitical alignments, security and consistency of supply chains have become crucial. In this regard, Kazakhstan has enormous potential for the supply of rare earth metals and India is looking to source rare earths from there.

Singapore’s experience in introducing innovations in areas such as finance and technology can complement the advantages of natural resources, geographical location and the developing infrastructure of Kazakhstan and other Central Asian states. Over 140 Singaporean companies and joint ventures are currently operating in Kazakhstan, with Singaporean investments in the Kazakh economy surpassing $1.7 billion.