India Port Global Limited (IPGL) and the Ports and Maritime Organisation (PMO) of Iran have signed a long term agreement for the development of Chahbar port. The initial agreement will mean that IPGL will operate the Chahbar port for 10 years, according to a press release issued by the Ministry of Ports, Shipping and Waterways on Monday evening.
The Union Minister of Ports, Shipping, and Waterways and AYUSH Sarbananda Sonowal visited Chabahar to be present during the signing ceremony held on May 13. Sonowal was present when a team of Indian officials signed the agreement regarding Long-term Main Contract for the development of Shahid Beheshti Port Terminal, Chabahar.
The Union Minister held a fruitful bilateral meeting with his counterpart, Mehrdad Bazrpash, Minister of Roads and Urban Development of Iran. The ministers recalled the common vision of their leaders to further strengthen bilateral cooperation in connectivity initiatives and in making Chabahar Port a regional connectivity hub.
The ministerial visit and signing of the long-term contract will further strengthen ties between the two nations and highlight the importance of Chabahar as a gateway for India-Iran trade, trade with Afghanistan, and trade with other Central Asian countries. Incidentally, the development of the Chabahar Port Project is an India-Iran flagship project and had slowed down at one time due to US reservations about any nation trading with or dealing with Iran. However, signalling its independent stance in the international arena, the Narendra Modi government has gone ahead with commitments made earlier regarding Chahbar port.
India has been developing the Chabahar port on Iran’s south-eastern coast along the Gulf of Oman as a way to transport goods to Iran, Afghanistan, and central Asian countries. The development of Chahbar is of immense strategic importance as it allows for the for the bypassing two important Pakistani ports, Karachi and Gwadar. Incidentally, Gwadar in Balochistan is being developed jointly by Pakistan and China under China Pakistan Economic Corridor (CPEC) programme. During the past year, Afghanistan has not been using Karachi as a transit port for goods being imported or exported by it.
The signing of a long term contract for the development of Chahbar will undermine Karachi as also Gwadar. “Chahbar Port’s significance transcends its role as a mere conduit between India and Iran. It serves as a vital trade artery connecting India with Afghanistan and many Central Asian nations,’’ Sonowal said in Teheran. For good measure, he added: “This linkage has unlocked new avenues for trade and fortified supply chain resilience across the region.’’
Under the agreement signed for the development of Chahbar, the Indian company IPGL will invest over $120 million, and there will be an additional $250 million in financing, thus bringing the contract’s value to $370 million, Iranian Minister Mehrdad Bazrpash said while giving details. He pointed out that Chahbar can act as a focal point in the transit development in the entire region. “We are pleased with this agreement, and we have full trust in India,’’ he added.
Talking to reporters in Mumbai regarding the development, Minister of External Affairs S Jaishankar said: “It will clear the pathway for bigger investments to be made in this port.’’ Incidentally, the Chahbar port provides an easier land-sea route to India to reach Afghanistan, bypassing Pakistan.
It is expected that Afghanistan will also join India and Iran to sign a tripartite agreement for the use of this port. Presently, its trade through Chahbar is in the range of $700 to $800 million per year. This trade volume is expected to touch $3 billion annually after the signing of the tripartite agreement.
