By Girish Linganna
On Monday May 13, the Indian government, led by Narendra Modi, announced the signing of a 10-year agreement with Iran to enhance cooperation in the development and operation of the port of Chabahar. This move aims to strengthen India’s ties with Iran, an important country in the Middle East.
The Indian government has been actively involved in the development of the Chabahar port, located on Iran’s southeastern coast along the Gulf of Oman. The port serves as a crucial transportation route for goods destined for Iran, Afghanistan, and countries in Central Asia. By utilizing the Chabahar port, India can bypass its rival Pakistan’s ports of Karachi and Gwadar, facilitating smoother trade and connectivity in the region.
Despite this, the port holds immense importance beyond being a simple link between India and Iran. It serves as a crucial trade route connecting India with Afghanistan and Central Asian countries. Sarbananda Sonowal, India’s Shipping Minister, emphasized this significance during his visit to Tehran after the agreement was signed.
The establishment of this connection has opened up fresh opportunities for trade and strengthened the resilience of supply chains in the region.
Indian Ports Global Limited (IPGL) and the Port & Maritime Organization of Iran have officially signed a long-term agreement, as confirmed by authorities from both nations.
The partnership between Iran and India regarding the strategic port can be traced back to 2003 when New Delhi agreed to enhance the port’s development along with the necessary infrastructure connections during the visit of former President Muhammad Khatami to India. However, the project has faced multiple setbacks over the years and has been hindered by sanctions imposed on Iran.
The agreement, signed in Tehran with the presence of the Indian and Iranian shipping Ministers, has officially replaced the initial framework agreement that was signed back in 2016 when Prime Minister Narendra Modi visited Iran.
According to Mehrdad Bazrpash, the Iranian Minister of Roads and Urban Development, the agreement entails an investment of approximately $120 million from IPGL, accompanied by an additional $250 million in financing. This brings the total value of the contract to $370 million.
Under the terms of the agreement, India has committed to acquiring various types of equipment, including Mobile Harbour Cranes (MHCs), Rail-Mounted Quay Cranes (RMQCs), Rubber-Tired Gantry Cranes (RTGCs), Reach Stackers, Forklifts, and Pneumatic Unloaders, for use at Chabahar Port. The statement further mentioned that this agreement sets the stage for increased trade and investment prospects, which have the potential to significantly contribute to India’s economic growth and development.
Since assuming control of port in late 2018, IPGL has successfully managed the handling of container traffic exceeding 90,000 TEUs (Twenty Foot Equivalent Unit) and bulk as well as general cargo surpassing 8.4 million tonnes, as stated by an official from the Indian government.
Chabahar’s Role in Humanitarian Aid and Regional Connectivity: Chabahar has played a crucial role in providing humanitarian aid, particularly during the Covid-19 pandemic. Through the port, a significant amount of aid, including 2.5 million tonnes of wheat and 2,000 tonnes of pulses, has been efficiently transported from India to Afghanistan. Additionally, in 2021, Chabahar facilitated the delivery of 40,000 litres of the pesticide Malathion from India to Iran to combat a locust infestation.
Indian Foreign Minister S. Jaishankar expressed this sentiment during a press conference in Mumbai on Monday, 13th May, emphasizing the positive impact of the port’s operations.
According to Jaishankar, India anticipates that the project will enhance its connectivity with an international transport corridor that is being established in collaboration with Iran and Russia. Furthermore, it is expected to strengthen trade relationships with Central Asia.
Located at the entrance of the Gulf of Oman, Chabahar is Iran’s first deepwater port, strategically positioning the country on the international maritime trade route. Situated in Iran’s Sistan-Baluchestan Province, the port is approximately 120 kilometres southwest of Pakistan’s Baluchistan Province, where the Gwadar port, funded by China, is located.
Chabahar holds significant strategic value for both Iran and India. For Iran, the port serves as a potential means to mitigate the impact of Western sanctions. Meanwhile, it provides India with an alternative trade route that circumvents Pakistan, which restricts India’s land access to trade with Afghanistan and Central Asia.
The Chabahar project comprises two separate ports, namely Shahid Beheshti and Shahid Kalantari terminals. Each of which has five berth facilities. However, India’s investment is specifically limited to the Shahid Beheshti port. This information is derived from the research paper titled ‘Geopolitics of Chabahar port for Iran, India, and Afghanistan’ authored by Ali Omidi and Gauri Noolkar-Oak from the University of Isfahan in Iran.
The contract value, totalling $370 million, awarded to IPGL, will be solely dedicated to the enhancement and expansion of the Shahid Beheshti terminal.
INSTC: A Vision for Seamless Connectivity: Additionally, Chabahar Port plays a role in the envisioned International North-South Transport Corridor (INSTC).This project is an extensive transportation network spanning over 7,200 kilometres. It includes sea routes, roads, and railways that connect the cities of Saint Petersburg in Russia and Mumbai in India.
The International North-South Transport Corridor (INSTC) consists of a total of thirteen member countries. These countries include India, Iran, Russia, Turkey, Azerbaijan, Kazakhstan, Armenia, Belarus, Tajikistan, Kyrgyzstan, Oman, Ukraine, and Syria. Additionally, Bulgaria participates in the INSTC as an Observer Member.
The INSTC project envisions a logistics route that involves transporting goods from Mumbai, India, to Shahid Beheshti Port in Chabahar, Iran, primarily by sea. From Chabahar, the goods are then transported by road to Bandar-e-Anzali, an Iranian port located on the Caspian Sea. Subsequently, they are shipped across the Caspian Sea to Astrakhan, a port in the Russian Federation. Finally, the goods are transported from Astrakhan to various regions within Russia and further into Europe using the Russian railway network.
The International North-South Transport Corridor (INSTC) is anticipated to significantly reduce transit time by 40%, resulting in a shorter duration of 25-30 days compared to the current 45-60 days. Moreover, the corridor is expected to reduce freight costs by 30% when compared to the expenses incurred when using the Suez Canal route. (IPA
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