New Delhi and Tehran have finalized a long-term contract for the development of Chabahar Port, marking a significant milestone in a project that has faced numerous challenges over the past two decades. According to sources, a high-level delegation led by India’s shipping minister will visit Iran after the general election to sign the contract. The deal comes after India agreed to help Iran develop Chabahar Port and its accompanying infrastructure links during Iranian President Muhammad Khatami’s visit to India in 2003. Despite its strategic importance, progress on the project was slow until India committed to providing $100 million for its development in 2013. In 2016, India, Iran, and Afghanistan signed an agreement for the development of an international trade corridor that included Chabahar as a central transit point. India also agreed to invest $85 million in the development of Chabahar’s Shahid Behesti terminal. However, the reimposition of Western sanctions on Iran for its nuclear program hampered India’s ability to develop the port. Thus far, India has only been able to supply six mobile harbor cranes valued at $25 million. The upcoming long-term contract is expected to address concerns over arbitration clauses and pave the way for a more comprehensive development of Chabahar Port. Amid geopolitical disruptions in West Asia, including clashes between Iran and Israel, the deal is seen as significant. India has expressed concern over rising tensions in the region and has maintained a diplomatic dialogue with Iran. The Chabahar Port holds revenue-generating potential, with container cargo handling at the Shahid Beheshti terminal reaching 25.788 TEU (twenty-foot equivalent unit) and bulk cargo handling reaching 1.5 million tonnes in the first half of fiscal year 2023-24. India plans to strengthen its presence in key infrastructure along the route passing through the Persian Gulf region, and the Adani Group is already operating the Haifa port in Israel. State-run India Ports Global Limited (IPGL) has handled over 6.56 million tonnes of bulk cargo at the Shahid Behestti terminal since 2018. India’s major investment plans in Iran, largely centered around the Chabahar port, give it a strategic advantage over China and Pakistan. The contract signing and subsequent development of Chabahar Port are expected to enhance India’s connectivity options and boost regional trade.
India, Iran Finalize Long-Term Contract for Chabahar Port Development
