10-year pact inked on Chabahar port
NEW DELHI: India and Iran on Monday signed a long-term agreement covering Indian operations at the Chabahar port, with New Delhi offering a credit window worth $250 million for the development of infrastructure around the strategic facility in the Gulf of Oman.
The signing of the pact by officials of the two sides in Tehran was witnessed by ports and shipping minister Sarbananda Sonowal and his Iranian counterpart Mehrdad Bazrpash.
Sonowal’s visit amid India’s general elections emphasises the importance attached by New Delhi to the Chabahar port and its place in ambitious plans to forge greater connectivity with Iran, Afghanistan and the landlocked central Asian states. Sonowal said with the signing of the agreement, the two countries have laid the foundations for India’s long-term involvement in Chabahar.
“The signature of this contract will have a multiplier effect on the viability and visibility of Chabahar port,” he said. “Chabahar is not only the closest Iranian port to India, but it is also an excellent port from [a] nautical point of view.” The long-term agreement, to be valid for 10 years and extended subsequently, was being negotiated by the two sides over the past three years and had been held up by differences on a clause related to arbitration.
It replaces an initial pact inked in 2016 that covered India’s operations at the Shahid Beheshti terminal of Chabahar port and has been renewed annually. India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of state-run India Global Ports Limited (IGPL), currently operates Shahid Beheshti terminal at Chabahar port.
Under the new contract between IPGL and the Ports and Maritime Organisation of Iran (PMO), the Indian state-run firm will invest about $120 million on further equipping Shahid Beheshti terminal, people familiar with the matter said on condition of anonymity. India has also offered a credit window equivalent to $250 million for mutually identified projects aimed at improving Chabahar-related infrastructure, the people said.
The Indian side handed over a letter from external affairs minister S Jaishankar to his Iranian counterpart Hossein Amirabdollahian regarding the credit window and reiterated India’s commitment to cooperate in developing the port, the Indian embassy in Tehran said in a post on X.
Sonowal and Bazrpash discussed “furthering the shared vision of making Chabahar port a regional connectivity hub connecting India to Afghanistan, central Asia, and Eurasia”, the embassy said in another post.
Hailing the development, external affairs minister S Jaishankar said the port will definitely see more investments and connectivity linkages coming out of it. “Right now the port has not grown.
If you don’t have a long-term agreement it is difficult to invest in a port. So the very clear expectation is that part of the Chabahar that we are involved in will definitely see more investments, it will see more connectivity linkages coming out of that port,” Jaishankar said.
Sonowal travelled from New Delhi to Tehran on a special Indian Air Force (IAF) and his delegation included JP Singh, the joint secretary who heads the Pakistan, Afghanistan and Iran desk in the external affairs ministry. The move comes at a time when China has been showing greater interest in investments in ports and other coastal infrastructure in Iran, with Tehran pressing Beijing to take up the development of other terminals at Chabahar port.
HT first reported in September 2022 that India and Iran were working on a long-term agreement for IGPL’s operations at Chabahar port. The only issue holding up the agreement at that time was related to the jurisdiction for arbitration of differences on any matters. Under Iran’s constitution, such arbitration cannot be referred to foreign courts, and a proposal under the agreement required a constitutional amendment. It was not immediately clear how the two sides worked out these differences.