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India inks Chabahar Port deal with Iran

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In a deal of significant strategic importance, India and Iran on Wednesday signed an inter-Governmental Memorandum of Understanding (MoU) regarding India’s participation in the development of the Chabahar Port in Iran.

This was signed by Abbas Ahmad Akhoundi, Minister for Transport and Urban Development of Iran, and Nitin GadkariUnion Road Transport and Highways Minister, during his visit to Iran.


About the Chabahar Port Project :

  • With the signing of this MoU, Indian and Iranian commercial entities will now be in a position to commence negotiations towards finalisation of a commercial contract under which Indian firms will lease two existing berths at the port and operationalise them as container and multi-purpose cargo terminals.
  • It will impart significant strategic leverage to India giving it access to Afghanistan.
  • Chabahar  which is located close to the strategic Persian Gulf will impart significant strategic leverage to India giving it access to Afghanistan and to the energy-rich Central Asia bypassing Pakistan.
  • It also cuts down transit time by a third accruing significant time and cost savings.
  • India, which has invested over $2 billion in Afghanistan, plans to link the Chabahar port with the Zaranj-Delaram road, the garland highway, India built in Afghanistan by upgrading the Chabahar-Milak road opening alternative access to sea port for Afghanistan’s connectivity to regional and global markets.
  • India has already committed $100 million to develop the port.
  • India has planned to complete this port project in about one-and-a-half years.
  • In 2014, Indian government sanctioned an initial amount USD 85 million for the development of Chabahar port.

Chabahar Port, Strategically Important for India :

  • India is helping develop the Chabahar Port, which will give it access to the oil and gas resources in Iran and the Central Asian states. By so doing, India hopes to compete with the Chinese, who are building Gwadar Port, in Pakistani Baluchistan.
  • The distance between Chabahar and Gujarat is less than Delhi and Mumbai.
  • Iran plans to use Chabahar for transshipment to Afghanistan and Central Asia, while keeping the port of Bandar Abbas as a major hub mainly for trade with Russia and Europe.
  • India and Iran are discussing building a gas pipeline between the two countries along the bed of the Arabian Sea to bypass Pakistan, using the Chabahar port.

Both the countries are pondering the delivery of natural gas produced in Turkmenistan with Indian assistance to north Iran while the Islamic Republic will send natural gas from its southern deposits to Indian consumers. This pipeline is conceived by India to replace the proposed Iran-Pakistan-India gas pipeline, the negotiations for which have dragged on due to the worsening of relations between India and Pakistan.

Chabahar Port :

  • The Port of Chabahar (or Chah Bahar) is a seaport in Chah Bahar in southeastern Iran.
  • Its location lies in the Gulf of Oman. It is the only Iranian port with direct access to ocean.
  • The port was partially built by India in the 1990s to provide access to Afghanistan and Central Asia, bypassing Pakistan.

Related News :

Commenting on the deal, Richard Verma, U.S. Ambassador to India cautioned against “rushing in” with investments in  Iran as the nuclear deal with Iran being negotiated was not final and said there was need “to maintain the international solidarity that has brought this hard fought diplomatic victory, but we are not over the finish line yet.