Chabahar Agreement can be a catalyst for Iran-India relations: Ambassador Iraj Elahi


India and Iran signed a long-pending agreement for 10 years, under which India Ports Global Limited (IPGL) will invest around $120 million to equip and develop the Chabahar port terminal which will But India is still working. A trade corridor through Iran to Afghanistan, Central Asia and Russia. The agreement, signed in Tehran on Monday in the presence of Indian and Iranian shipping ministers, formalizes the original framework agreement signed in 2016 during Prime Minister Narendra Modi's visit. It could also potentially revive plans for India to help Iran build a rail link to Chabahar, which was previously shelved due to New Delhi's reluctance over US sanctions against Iran. Iran's Ambassador to India Iraj Elahi spoke about the importance of the agreement.

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What are the highlights of the signing of the Chabahar agreement and how does it differ from the first agreement reached in 2016?

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An agreement reached in 2016 defined the general framework for cooperation between Iran and India in Chabahar. But implementation required a long-term legal agreement that included technical and financial details. We refer to this operational agreement as the “Basic Cooperation Agreement” in Chabahar. Unfortunately, differences between the two parties over some key contract provisions, including arbitration, prevented the signing. For this reason, a short one-year lease was signed between the two countries to accelerate the start of cooperation until the main agreement is completed and signed. The process of finalizing the central agreement was lengthy, and the two parties extended the short lease four times to resolve legal and technical issues of port operations. Fortunately, all technical and legal issues with the original contract have been resolved, and will be signed today, and the short lease extension is not required.

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Q: How did the two sides resolve the issue of arbitration, which became a sticking point in the negotiations?

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Arbitration was one of the most important disputes. [between Indian and Iranian negotiators]. In this context, both sides arrived at a formula that would serve both interests. In short, I can say that according to the agreement, any dispute should be resolved in an atmosphere of mutual trust and with the will of the heads of both countries. The legal details of this issue are contained in the contract.

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Q: Do you see other stalled deals like railway deal and SEZ project?

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We are confident that the signing of this agreement will create a new and serious energy in all spheres of relations and restart stalled projects. Transit and ports are important pillars of Iran-India relations. Therefore, this agreement and its implementation will promote cooperation in all sectors. Chabahar can act as a catalyst for relationships. We hope that investment by Indian companies in energy and industry projects in Chabahar will increase. By investing in Chabahar, they can enjoy cheap energy, land and labor and can manufacture their products and export them to the Iranian market or to other countries via Iran.

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Q: How do you see this deal compared to Iran's other core agreements, such as the Belt and Road Initiative with China?

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The Chabahar port development agreement between Iran and India preceded China's One Belt One Road project years ago and was based on the common interest of both countries. We do not consider this agreement and cooperation in Chabahar to conflict with any of Iran's economic plans and obligations to other countries. The economic benefits of Chabahar and the International North-South Transport Corridor (INSTC) are clear to all and all countries will enjoy these benefits.

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