India and Iran ink 10-year agreement
The countries shook hands to develop and operate the Chabahar port, enhancing trade connectivity in the region
image for illustrative purpose
On Monday, India and Iran signed a 10-year agreement to develop and manage the Chabahar port. The deal, signed by the Narendra Modi-led government, aims to strengthen Iran-India trade relations.
India has been enhancing the Chabahar port on Iran's southeastern coast near the Gulf of Oman. Chabahar Port development partnership facilitates smoother transportation of goods to Afghanistan, Iran, and Central Asian countries, bypassing Pakistan's ports in Gwadar and Karachi.
However, progress on the port was hampered by U.S. sanctions on Iran. Despite this, India sees Chabahar as more than just a link between India and Iran. It views the port as a crucial trade route connecting India with Afghanistan and Central Asia, enhancing regional trade and supply chain resilience.
India's Shipping Minister, Sarbananda Sonowal, emphasised Chabahar's importance in Tehran. He highlighted its role in fostering trade opportunities and strengthening regional connectivity.
Regarding the India Iran Chabahar Port Deal, the U.S. State Department reiterated that sanctions on Iran remain in place. It cautioned entities considering business deals with Iran about the potential risks of sanctions enforcement.
The 10-year contract was signed between Indian Ports Global Limited and Iran's Port & Maritime Organization. According to Iranian Minister Mehrdad Bazrpash, IPGL will invest around $120 million in the port, with an additional $250 million in financing, totaling $370 million.
Since taking over port operations in late 2018, IPGL has handled significant container and cargo traffic. Notably, over 90,000 TEUs of container traffic and more than 8.4 million tonnes of bulk and general cargo have been managed.
Chabahar has facilitated the shipment of essential goods from India to Afghanistan, including 2.5 million tonnes of wheat and 2,000 tonnes of pulses. India's Maritime Agreement with Iran is expected to pave the way for further investments in the port's development, as stated by Indian Foreign Minister Subrahmanyam Jaishankar.
