India, Iran sign pact for long-term operation of terminal at Chabahar

New Delhi: India has clinched a long-term deal with Iran to develop and run the operation of Shahid Beheshti Terminal of the Chabahar Port on the southeastern coast of the Persian Gulf nation.

Minister of Shipping, Ports and Waterways, Sarbananda Sonowal, flew from New Delhi to Tehran early on Monday and joined his counterpart Mehrdad Bazrpash in witnessing the signing of the 10-year contract between India Ports Global Limited (IPGL) and the Ports and Maritime Organisation of Iran (PMOI). The contract will clear the way for the IPGL to equip and operate the port for the next 10 years. The contract has a provision for both sides to further extend cooperation in Chabahar Port.

Sonowal said that the contract had laid the foundation for India’s long-term involvement in the development and operation of the Chabahar Port of Iran. He and Bazrpash discussed furthering the shared vision of making Chabahar Port a regional connectivity hub connecting India to Afghanistan, Central Asia, and Eurasia.

The IPGL will invest approximately $120 million to equip the port. India has also offered an Indian Rupees credit window equivalent to $250 million, for mutually identified projects aimed at improving infrastructure related to Chabahar Port.

New Delhi made the move to clinch the long-term contract with Tehran amid turmoil in West Asia over Israel’s continued military offensive against Palestinians in the Gaza Strip as well as escalating tension between the Jewish nation and Iran.

The Ministry of External Affairs in New Delhi stated that the contract signed on Monday would give a boost to regional connectivity and India’s linkages with Afghanistan, Central Asia, and Eurasia.

Tehran projected it as a “turning point in bilateral and regional trade and economic cooperation”, as well as a boost to strategic cooperation between Iran and India.

Chabahar is a deep-water port in the Sistan-Baluchistan province of Iran. It is the closest to India among all the ports of Iran and is located in the open sea, providing easy and secure access for large cargo ships.

During the visit of Prime Minister Narendra Modi to Tehran in May 2016, a Trilateral Agreement to establish the International Transport and Transit Corridor (Chabahar Agreement) was signed by India, Iran, and Afghanistan. India is participating in the development of the first phase of the Shahid Behesti Terminal of the Chabahar Port in cooperation with the government of Iran. India has so far supplied six Mobile Harbour Cranes - two of 140 tons and four of 100 tons capacities and other equipment worth $ 25 Million.

The IPGL, through its wholly owned subsidiary India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of the Chabahar Port on December 24, 2018.

The port has since handled more than 90,000 TEUs of container traffic and more than 8.4 MMT of bulk and general cargo. The port has also facilitated the supply of humanitarian assistance, especially during the COVID-19 pandemic. A total of 2.5 million tons of wheat and 2000 tons of pulses have been transhipped from India to Afghanistan through Chabahar Port. In 2021, India supplied 40,000 litres of environment-friendly pesticide to Iran to fight locust menace through the port.

Modi and Iranian President Ebrahim Raisi discussed the long-term contract during a bilateral meeting on the sidelines of the BRICS summit in Johannesburg in August 2023.

The Chabahar Port has provided much-needed sea access to the landlocked countries of the region, including Afghanistan, and emerged as a commercial transit hub for the region.