In a landmark development on May 13, India and Iran inked a crucial deal permitting India Global Ports Limited (IGPL), a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust, to manage the Shahid Beheshti terminal at Chabahar Port for the next decade.
This agreement signifies a significant step in strengthening India’s strategic and economic interests in the region. The Chabahar Port, a strategic asset envisioned by Iran’s Shah in the early 1970s, has had a tumultuous history, with its development initially stalled by the Islamic Revolution. Despite these setbacks, the port’s first phase opened in 1983, strategically aimed at alleviating pressure on Iran’s sole port, Bandar-e-Abbas, which was vulnerable to Iraqi attacks. The Shahid Beheshti terminal has since evolved, with substantial infrastructure developments completed by 2004.
India’s engagement with Chabahar dates back to 2003, although progress was impeded by international sanctions on Iran. A breakthrough came in 2016 when India and Iran agreed to refurbish the Shahid Beheshti terminal, including the construction of a 600-metre container handling facility. Although initial implementation faced delays due to sanctions, the project gained momentum following a US exemption for India’s Chabahar activities, recognising their contribution to Afghanistan’s economic development. The operationalisation of the Chabahar Port by IGPL heralds a new chapter in Indo-Iranian cooperation. With the new ten-year operational mandate, India’s investment in infrastructure, including the deployment of six heavy-duty cranes worth $125 million and a $250 million soft loan for port-related development, underscores its commitment to this strategic project. Additionally, India is heavily invested in enhancing connectivity, with substantial progress on the Chabahar-Zahidan rail link and the Daleram-Zaranj road, ensuring seamless cargo movement.
For Iran, Chabahar Port represents a vital lifeline in the Indian Ocean, mitigating the limitations of Bandar-e-Abbas, which struggles with congestion and is not equipped to handle large cargo ships. The deeper waters at Chabahar facilitate the docking of large vessels, thus streamlining cargo operations and reducing dependency on transhipment through UAE ports. This development is pivotal for Iran’s economy, particularly under the strain of ongoing American sanctions, offering a robust avenue for economic revitalisation. India stands to gain considerably from this strategic partnership. The Chabahar route significantly enhances trade with Afghanistan, offering a cost-effective alternative to the previously impractical air and land routes hindered by Pakistani airspace restrictions. This route slashes transportation costs by up to 60%, bolstering trade not only with Afghanistan but also opening new corridors to Central Asia.
Moreover, the strategic implications of the Chabahar project cannot be overstated. Situated just 76 nautical miles from the Chinese-operated Gwadar Port in Pakistan, Chabahar provides India with a critical vantage point to monitor Chinese activities in the Arabian Sea. This aligns with India’s “Necklace of Diamonds” strategy, countering China’s “String of Pearls” by establishing a network of strategic assets across the Indian Ocean, including bases in Car Nicobar, Colombo, Agalega, and Qurm. The India-Iran deal on Chabahar Port is a game-changer, offering substantial economic benefits and significant strategic leverage. As India continues to invest in this project, the Chabahar Port is poised to become a linchpin in regional trade and geopolitics, enhancing India’s influence and operational reach in a strategically vital region.
