By India’s strategic move to secure a contract for operating Iran’s Chabahar port has raised eyebrows amidst US warnings of potential sanctions. The $85 million agreement, aims to bolster trade ties between New Delhi and Central Asia.
Situated just 90km away from Pakistan’s Gwadar port, the Chabahar port deal charts a new transit route connecting India, Iran, and Afghanistan, circumventing Pakistan entirely. India views this as a vital step towards accessing markets in Central Asia and Afghanistan.
However, concerns loom over the deal’s fate, given the lingering uncertainty surrounding the Iran nuclear deal, especially under the Trump administration’s stance.
While the US acknowledges the Chabahar port deal between Iran and India, it reiterates its commitment to enforcing sanctions against Iran. State Department Deputy Spokesperson Vedant Patel emphasizes the risks involved in business dealings with Iran amidst existing sanctions.
India and Iran envision the Chabahar port as a pivotal node in the International North-South Transport Corridor (INSTC), a massive transport project spanning over 7,200 kilometers. This corridor aims to facilitate freight movement among several countries.
The long-term contract, inked between Indian Ports Global Limited (IPGL) and Iran’s Port and Maritime Organisation, marks a significant milestone in bilateral ties. IPGL plans to invest approximately $120 million, with an additional $250 million to be raised through debt financing.
This agreement supersedes the earlier pact signed in 2016, which primarily focused on India’s operations at the Shahid Beheshti terminal within the Chabahar port.
Notably, India utilized the Chabahar port last year to dispatch 20,000 tonnes of wheat aid to Afghanistan. In 2021, it was also utilized for supplying environmentally friendly pesticides to Iran, underscoring its multifaceted utility.
Despite uncertainties stemming from the US’s stance on Iran, India proceeds with sealing the deal, emphasizing its strategic importance in accessing markets beyond its borders.
Underlining the risks associated with such agreements, the US reiterates its commitment to enforcing sanctions against Iran, urging caution to entities considering business ventures with the country.
The signing of a long-term contract between Indian Ports Global Limited (IPGL) and Iran’s Port and Maritime Organisation marks a significant step forward in bilateral cooperation.
This agreement supersedes the previous pact signed in 2016, signaling a renewed commitment to enhancing trade and connectivity between the two nations.
The Chabahar port’s utilization for humanitarian aid, such as dispatching wheat to Afghanistan, underscores its humanitarian as well as economic significance.
Geographically, the proximity of Kandla port in Gujarat and Mumbai further enhances the port’s accessibility, solidifying its role as a strategic trade hub in the region.
