India has signed a long-term contract with Iran for the operation of the Shahid Beheshti Port in Chabahar, the Ministry of External Affairs said on Monday, announcing a move expected to boost Delhi’s investments and connectivity linkages to Tehran.
New Delhi has been developing part of the port in Chabahar on Iran’s southeastern coast along the Gulf of Oman to transport goods to Iran, Afghanistan and central Asian countries, bypassing the port of Karachi and Gwadar in its rival Pakistan.
This announcement comes hours after Union Shipping Minister Sarbananda Sonowal flew to the West Asian country to seal the deal. Hailing the move as a pivotal moment in the bilateral partnership, MEA spokesperson Randhir Jaiswal said the deal holds promise for enhancing India’s linkages with Afghanistan, Central Asia, and Eurasia.
READ MORE: Five Reasons Why The Chabahar Port Is Of Strategic Importance To India
| Scripting a new chapter in bilateral partnership!Minister @shipmin_india & @moayush @sarbanandsonwal witnessed the signing of the long-term contract for the operation of the Shahid Beheshti Port in Chabahar, between India Ports Global Ltd. & Ports and Maritime… pic.twitter.com/hUddkyQrkE
— Randhir Jaiswal (@MEAIndia) May 13, 2024
Why Is Chabahar Important
According to an official statement, the contract was signed by India Ports Global Ltd (IPGL) and Iran’s Port & Maritime Organisation (PMO), in the presence of Ports, Shipping and Waterways Minister Sarbananda Sonowal. “The long-term bilateral contract on Chabahar Port Operation was signed between Indian Ports Global Limited (IPGL) of India and the Port & Maritime Organisation (PMO) of Iran, enabling operation of Shahid-Beheshti in Chabahar Port Development Project for a period of 10 years,” the statement said. This is the first time India will take over the management of an overseas port.
“This agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan,” the statement said. The India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of IPGL, facilitated the first consignment of exports from Afghanistan to India in 2019. The statement said the operations continued through short-term contracts while negotiations on the long-term agreement picked pace with the visit of Sonowal to Chabahar in August 2022.
“This 10 years long term lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust of trading communities from the region,” the statement said. As part of the agreement, the statement said India will procure MHCs, RMQCs, RTGCs, Reach Stackers, Forklifts, Pneumatic Unloaders etc at Chabahar Port. “The agreement paves the way for enhanced trade and investment opportunities which will potentially boost India’s economic development,” it added.
Speaking at the occasion, Sonowal said, “With the signature of this contract, we have laid the foundations of India’s long-term involvement at Chabahar.” Sonowal added that the signing of this contract will have a multiplier effect on the viability and visibility of Chabahar port. According to him, Chabahar is not only the closest Iranian port to India but it is also an excellent port from nautical point of view. Sonowal also held a meeting with Iranian Minister of Roads & Urban Development Mehrdad Bazrpash.
Located in Sistan-Balochistan province on the energy-rich Iran’s southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties. India has been pushing for the Chabahar port project to boost regional trade, especially for its connectivity to Afghanistan. India and Iran have projected the port as a key hub for the INSTC project. The INSTC is a 7,200-km-long multi-mode transport project for moving freight among India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.
India has been developing a part of Chabahar Port and discussions on the development of the port dates back to 2003 during Iranian President Muhammad Khatami’s visit to India. In 2013, India committed to investing USD 100 million towards the development of Chabahar Port. Earlier, a memorandum of understanding (MoU) for development of Chabahar Port by India was signed in May 2015. Thereafter, the contract was executed on May 23, 2016, at Tehran (Iran) during the visit of PM Modi to Iran.
(With agency inputs)
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