India and Iran sign 10-year-pact for Chabahar port

In a positive development between India and Iran, a decade-long deal has been signed to manage the Chabahar Port. The pact was signed in the presence of India’s shipping minister, Sarbananda Sonowal on Monday. The deal is very crucial for India as it will allow us to counter Pakistan’s Gwadar port and China’s Belt and Road Initiative (BRI).

Strategic Development at Chabahar Port:

This pact will allow India to gain operational control over a crucial part of Chabahar port, developing India’s economic dominance over central Asia. It will open a route to connect India to Afghanistan, Central Asia and the Eurasian region for trade countering  Pakistan’s Gwadar port and China’s BRI. This deal will open business opportunities for India unlocking an alternate trade route from the sensitive and busy Persian Gulf and Strait of Hormuz. 

India Ports Global Ltd (IPGL), the Indian company that signed the contract with the Ports & Maritime Organisation of Iran (PMO), will invest approximately $120 million in Chabahar port. A credit value of $250 million has also been offered by India for improving the infrastructure of the Chabahar port.

It will be the first time India will take operational control over an overseas port. This will be followed by take-over operations at Myanmar’s Sittwe Port in the Bay of Bengal, disrupting the overall control of China, as approved last month.

India is planning to establish connectivity with Russia by connecting Chabahar with the International North-South Transport Corridor (INSTC).

“It will see more connectivity linkages coming out of that port. And we believe today that connectivity is a very big issue in that part. International north-south transport corridor, which we’re doing with Iran-Russia, Chabahar will connect us to that, also to Central Asia,” External Affairs Minister S. Jaishankar said on Monday.

The Chabahae port inaugurated by Iran in 1973, gained Indian interest in 2003 and the development was strengthened when India offered a donation of $100 million for the infrastructure development of Chabahar port, following the signing of an MoU with Iran four years ago. The first phase of the pact was signed in 2016 when PM Modi visited Iran.

Pakistan is continuously encouraging other countries to use their Karachi Port whereas central Asian countries have shown their interest in the Chabahar Port for accessing the Indian Ocean region.

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