India has formalised a 10-year contract with Iran to develop and operate the Chabahar port. The agreement, signed by authorities from both nations, marks a milestone in bilateral relations, underscoring India’s commitment to enhancing maritime infrastructure in the Middle East.
Chabahar port, situated on Iran’s south-eastern coast along the Gulf of Oman, holds immense strategic importance for India as a crucial gateway to access markets in Iran, Afghanistan, and central Asian countries. By developing and operating Chabahar, India aims to establish an alternative trade route, bypassing the port of Karachi and Gwadar in Pakistan, thus reducing dependence on its regional rival. Under the terms of the long-term agreement, Indian Ports Global Limited (IPGL) will spearhead the development and operational activities at Chabahar port. With an initial investment of approximately $120 million from IPGL, supplemented by an additional $250 million in financing, the total value of the contract amounts to $370 million. This substantial investment underscores India’s commitment to transforming Chabahar into a thriving maritime hub.
Since assuming operations of the port in late 2018, IPGL has made significant strides in enhancing its operational capacity. Notably, the port has handled container traffic exceeding 90,000 TEUs and bulk and general cargo totalling more than 8.4 million tonnes, as reported by an Indian government official. Moreover, Chabahar port has played a pivotal role in facilitating trade between India and Afghanistan, with 2.5 million tonnes of wheat and 2,000 tonnes of pulses being shipped from India to Afghanistan through the port. The development and operation of Chabahar port represent a strategic investment for India, offering unprecedented opportunities to bolster economic ties with Iran and neighbouring countries. By leveraging Chabahar’s potential as a key trade gateway, India aims to enhance regional connectivity, promote economic growth, and reinforce its position as a major player in the global maritime domain.
The signing of the 10-year agreement underscores the mutual commitment of India and Iran to deepening their strategic partnership and fostering greater collaboration in areas of mutual interest. As India continues to expand its footprint in the Middle East, the development of Chabahar port stands as a testament to India’s proactive approach in advancing its economic and strategic interests on the global stage. “Chabahar 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 Central Asian Countries,” India’s Shipping Minister Sarbananda Sonowal said in Tehran, after the signing of the agreement. “This linkage has unlocked new avenues for trade and fortified supply chain resilience across the region.”
