In a significant move, China today signed a pact with Pakistan which will connect the latter's strategically important port of Gwadar to it via rail, road and air routes. The crucial deal was inked during Chinese Premier Li Keqiang's visit to Islamabad today.
China had taken over operations at the port earlier this year, a move that had upset India.
Once complete, the port, which is close to the Strait of Hormuz - a key shipping lane that serves as a gateway for a third of the world's traded oil - is seen to be opening up an energy and trade corridor from the Gulf, across Pakistan to western China, and could serve as potential Chinese naval base in the Arabian Sea.
A worried India had, as a counter to China's presence in the region, announced that it will upgrade Iran's crucial Chabahar port that provides a transit route to land-locked Afghanistan. The port, which is surrounded by a free trade zone, is crucial particularly since Pakistan does not allow transit facility from India to Afghanistan.
New Delhi's decision was conveyed by External Affairs Minister Salman Khurshid in Tehran earlier this month.
Interestingly, Chabahar port is just 76 kilometres away from the Gwadar port in Pakistan.