How India stands to gain from prolonged Hormuz crisis

India's Great Nicobar project—which combines port development, civilian infrastructure, and military strategy—has been in the spotlight in recent weeks as global oil shipping routes have come under strain.

The island lies in the Andaman and Nicobar archipelago, between Myanmar and Indonesia, near the Strait of Malacca—the world's second-largest oil trade chokepoint after the hotly contested Strait of Hormuz in the Persian Gulf. The Geopolitical Monitor publication shines a light on the different economic and geopolitical aspects of this mega project in their latest article.

The project has faced sustained criticism from opposition parties in India, while international media have also raised concerns. Key questions center on the commercial viability of the proposed transshipment hub, its environmental impact, and the consequences for local communities. In response, the government has defended the project, noting that it has received clearance from the National Green Tribunal.

For New Delhi, the project's strategic value lies in both its economic and geopolitical rationale. The planned transshipment hub is intended to reduce India's dependence on major deep-water ports elsewhere in the region, particularly Colombo and Singapore.

India has already developed the new port of Vizhinjam in Kerala. However, a rapidly growing economy and expanding international trade will require additional capacity. According to the article, India is well positioned to attract global container and shipping traffic moving between the Middle East and East Asia, although competition from expanding Chinese port infrastructure remains a challenge.

China has been developing ports across the Indian Ocean littoral, including in East Africa, Pakistan, Sri Lanka, Bangladesh, and Myanmar. In an era of the weaponization of economic interdependence, New Delhi is seeking to develop alternatives of its own. Together, Vizhinjam in the south, Vadhvan in the west, and Great Nicobar in the east are expected to serve different regions of India, in line with the Maritime Vision 2030 and Sagarmala initiatives, both of which promote port-led development.

The project's geopolitical significance has become even more pronounced in the aftermath of the Iran war. The Strait of Malacca is a vital artery for East Asia's energy supplies and trade. Chinese strategists have long debated the "Malacca Dilemma," prompting Beijing to pursue alternative routes to the Indian Ocean through projects such as the China-Pakistan Economic Corridor (CPEC) and the China-Myanmar Economic Corridor (CMEC). The Great Nicobar project strengthens India's strategic position near the western entrance to the Strait of Malacca.

Forward military deployments by major powers on remote islands are a routine feature of Indian Ocean geopolitics. Britain and the United States maintain a military presence on Diego Garcia. France has military bases in the southwestern Indian Ocean, while Australia controls Christmas Island and the Cocos (Keeling) Islands.

By Nazrin Sadigova