India and Iran sign 10-year agreement for operation of Chabahar port

Eight years after concluding a general framework for cooperation on the Chabahar port in Iran, India and Iran on Monday signed a 10-year agreement for its operation.

A long-term agreement was signed between Indian Ports Global Limited (IPGL) and Iran's Port and Maritime Organization (PMO), which will enable the operation of the Shahid Behesti Terminal. After this, IPGL will invest around $120 million in equipping the port. India has also offered a credit window equal to $250 million for mutually identified projects aimed at improving Chabahar-related infrastructure, officials said.

Also Read | India and Iran scrapped foreign arbitration clause in Chabahar Port issue

The agreement was signed in the presence of Minister of Ports, Shipping and Waterways Sarbananda Sonowal and Iran's Minister of Roads and Urban Development Mehrdad Bazarpash.

A Memorandum of Understanding was signed by India in May 2015 for the development of Chabahar port. The agreement was executed on 23 May 2016 during Prime Minister Narendra Modi's visit to Iran.

Main trade artery

Terming it a historic day for the maritime sector, Mr. Sonowal said the agreement ushered in a new era of trade, maritime cooperation and transshipment while boosting trilateral trade between India, Iran and Afghanistan.


“As India continues to invest in the Chabahar port, its efficiency and capacity will be further enhanced, strengthening India's commitment to the economic development of the region. will use, reaffirming its commitment to support regional development beyond commercial interests, demonstrates its commitment to promoting goodwill and stability in the region,” said Mr. Sonowal.

Highlighting the importance of Chabahar, he said that it serves as an important trade artery connecting India with Afghanistan and Central Asian countries.

In the absence of a long-term agreement which was delayed by some difficult issues including arbitration, the two countries had concluded a short-term lease. According to Iranian Ambassador to India Iraj Elahi, arbitration was one of the most important points of contention between negotiators from the two countries.

“In this context, the two sides have arrived at a formula that will meet the interests of both. 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. Should. Hindu.

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Clearing the way

In August 2023, Mr. Modi met Iranian President Ibrahim Raisi in Johannesburg on the sidelines of the BRICS summit during which he discussed the pending long-term agreement on Chabahar.

Acknowledging that the port was being operated on an ad hoc basis, not because of any problem on the Indian side but over who would be the set of partners in Iran, External Affairs Minister S Jaishankar had said that a long-term agreement When will it happen? In conclusion, this will clear the way for major investments in the port.

“It will see more connectivity links from this port. We believe that connectivity is a major issue in this region. The international North-South transport corridor we are doing with Iran, Russia and Chabahar will give us It will also connect to Central Asia.

Chabahar is a deep water port located in Sistan-Baluchistan province of Iran. During Mr. Modi's visit to Iran in May 2016, India, Iran and Afghanistan signed a trilateral agreement to establish an international transport and transit corridor (Chabahar Agreement). India is participating in the development of the first phase of Shahid Behishti Terminal at Chabahar Port. India has so far supplied six mobile harbor cranes – two with a lifting capacity of 140 tonnes and four with a capacity of 100 tonnes – and other equipment worth $25 million.

Describing the corridor and ports as important pillars of Iran-India relations, Mr. Elahi said, “We believe that the signing of this agreement will create a new and serious energy in all areas of relations and restart stalled projects. Therefore, this agreement and its implementation will promote cooperation in all sectors and Chabahar can act as a catalyst for relations.

The Iranian envoy also ruled out any conflict between India and Iran's cooperation on Chabahar and any economic plans and obligations of Iran towards other countries. He added that the Chabahar port development agreement between Iran and India was signed years before China's One Belt One Road project and it is based on the common interest of both countries.

IPGL through its wholly owned subsidiary India Ports Global Chabahar Free Zone (IPGCFZ) took over the operations of Chabahar Port from 24 December 2018. Since then it has handled more than 90,000 twenty-foot equivalent units (TEUs). Container traffic and bulk and general cargo above 8.4 MMT.

The port is integrated with an exclusive free zone, which Mr. Sonowal said boosted its appeal, while India's incentives, such as concessions on shipping charges and cargo charges, have helped Chabahar. Through strengthening the flow of trade, promoting economic growth and cooperation.

A total of 2.5 million tonnes of wheat and 2000 tonnes of pulses have been shipped from India to Afghanistan through Chabahar port so far. In 2021, India supplied 40,000 liters of eco-friendly insecticide (Malathion) to Iran through the port to fight locust menace.

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