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Chabahar Port in Iran: India takes over operations of Chabahar Port; sets up India Ports Global Chabahar Free Zone

India started interacting with Iran on Chabahar Port around the year 2003; however, the major push was received in the second half of 2014, leading to the signing of an MoU between Iran and India for the development of Chabahar Port in May 2015.

Jan 8, 2019 10:30 IST
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India takes over operations of Chabahar Port in Iran

India took over the operations of a part of Chabahar Port in Iran during the Chabahar Trilateral Agreement meeting held on December 24, 2018 in Iran.

The heads of Indian, Iranian and Afghanistan delegation jointly inaugurated the office of the Indian SPV - India Ports Global Chabahar Free Zone (IPGCFZ) at Chabahar.

The absolute take-over of the terminal area, cargo handling equipment and the office building was completed by December 29, 2018.

Significance

The commercial operations began at the India Ports Global Chabahar Free Zone (IPGCFZ) with the arrival of a vessel. This step marked the new beginning for India. This is the first time that India will be operating a port outside its territories.

Chabahar Port deal: A Timeline

India started interacting with Iran on Chabahar Port around the year 2003; however, the major push was received in the second half of 2014, leading to the signing of an MoU between Iran and India for the development of Chabahar Port in May 2015.

This MoU translated into a formal 10-year Contract for Equipping and Operating the Chabahar Port, which was executed on May 23, 2016, during Prime Minister Narendra Modi’s visit to Tehran.

A trilateral transit agreement was also signed on May 23, 2016 between India, Iran and Afghanistan on Establishment of International Transport and Transit Corridor.

India on October 29, 2017 sent its first consignment of wheat to Afghanistan through Iran’s Chabahar port.

Since there were challenges in activation of the 10-year contract, the foundation of an interim period contract was laid during the visit of President of Islamic Republic of Iran, Hassan Rouhani to New Delhi in February 2018.

Resultantly, a formal short term Contract was signed on May 6, 2018.

How operations in Chabahar port will be beneficial for India?

The Chabahar port in the Sistan-Balochistan province in the southern coast of Iran is easily accessible from India's western coast and is increasingly seen as a counter to Pakistan's Gwadar Port located at distance of around 80 km from Chabahar.

The Chabahar port is being considered as a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries, besides ramping up trade among the three countries in the wake of Pakistan denying transit access to New Delhi.

Chabahar Port and its Significance

Chabahar Port is a seaport in Chahbahar in southeastern Iran.

Its location lies in the Gulf of Oman.

It is the only Iranian port with direct access to the Indian Ocean.

Being close to Afghanistan and the Central Asian countries of Turkmenistan, Uzbekistan and others, the port has also been called as the Golden Gate to these land-locked countries.

The port was partially built by India in the 1990s to provide access to Afghanistan and Central Asia, bypassing Pakistan under the Ashgabat Agreement.

Significance

The port will provide an alternative access to trade with Afghanistan bypassing Pakistan.

Reduced transportation costs will allow India to import crude oil, urea and dry fruits at lower prices.

Besides, land-locked country Afghanistan’s dependence on Pakistan for sea-access will be significantly reduced. It will ultimately lower Pakistan’s strategic hold on Afghanistan.

It will provide India access to the Middle East and Gulf countries increasing trade and ties.

It is the nearest port to India on the Iranian coast. It will provide India access to the resources and markets of Afghanistan and Central Asia.