In a significant development for regional trade and connectivity, India has signed a landmark 10-year agreement with Iran to operate the Shahid-Beheshti Terminal at Chabahar Port. The pact, signed on May 13, was formalized by Indian company India Ports Global Ltd (IPGL) and the Ports and Maritime Organization of Iran (PMO). This agreement marks a major milestone in India-Iran relations, aiming to transform Chabahar into a vital hub for trade and transit in the region.
In a significant development for regional trade and connectivity, India has signed a landmark 10-year agreement with Iran to operate the Shahid-Beheshti Terminal at Chabahar Port. The pact, signed on May 13, was formalized by Indian company India Ports Global Ltd (IPGL) and the Ports and Maritime Organization of Iran (PMO). This agreement marks a major milestone in India-Iran relations, aiming to transform Chabahar into a vital hub for trade and transit in the region.
The agreement was signed in the presence of key ministers from both countries, underscoring the strategic importance of the partnership. The Indian delegation, led by Minister of Ports, Shipping, and Waterways Sarbananda Sonowal, met with Mehrdad Bazrpash, Iran's Minister for Roads and Urban Development, to finalize the details of the contract. According to an official statement, this collaboration is expected to enhance regional connectivity and economic integration.
Under the terms of the agreement, IPGL will invest approximately $120 million to equip and operate the Chabahar port over the next decade. Additionally, India has offered a credit line equivalent to $250 million (approximately INR 18.5 billion) for mutually identified projects aimed at improving infrastructure related to Chabahar. This investment underscores India's commitment to enhancing trade routes and bolstering economic ties with Iran and the broader Central Asian region.
The Chabahar Port, located on Iran's southeastern coast along the Gulf of Oman, plays a crucial role in India's strategic plans to establish a trade route to Iran, Afghanistan, and Central Asia. This route bypasses Pakistan's Karachi and Gwadar ports, providing India with a direct connection to these regions. The new agreement not only strengthens India's position in regional trade but also counters the influence of Pakistan's Gwadar port and China's Belt and Road Initiative.
The operation of Chabahar Port by India represents the country's first overseas port management endeavor. This strategic move is expected to enhance India's connectivity to Afghanistan, Central Asia, and the larger Eurasian region. Chabahar is seen as a critical link for India's trade ambitions, providing a reliable and efficient route for transporting goods across the region.
Plans are also underway to link Chabahar with the International North-South Transport Corridor (INSTC), a multi-modal network that connects India with Russia via Iran. The INSTC is expected to significantly reduce travel time and transportation costs for goods moving between South Asia, Central Asia, and Europe. By integrating Chabahar into this corridor, India aims to further solidify its role as a key player in regional trade and connectivity.
This agreement comes at a time when geopolitical dynamics in the region are rapidly evolving. The collaboration between India and Iran not only strengthens bilateral relations but also has broader implications for regional stability and economic development. By investing in Chabahar, India is taking proactive steps to ensure its strategic interests are safeguarded while promoting economic growth and cooperation in the region.
India's involvement in the development of Chabahar Port dates back several years, with both countries recognizing its strategic importance. The port provides India with critical access to Afghanistan and Central Asia, bypassing the overland route through Pakistan. This access is particularly important for India's trade and energy security, as it opens up new avenues for economic engagement with landlocked countries in the region.
The successful implementation of this agreement is expected to pave the way for further cooperation between India and Iran. As the Chabahar Port becomes fully operational under Indian management, it is likely to attract more investment and trade, enhancing its role as a key logistics and transportation hub. The improved infrastructure and connectivity will benefit not only India and Iran but also other countries in the region, promoting economic growth and stability.