On Monday, May 13, Iran and India signed a 10-year contract for the development and operation of the Iranian port of Chabahar, located in the province of Sistan and Baluchistan in the southeastern region of Iran.
According to Reuters, the long-term agreement was finalized between Indian Ports Global Limited (IPGL) and Iran's Ports and Maritime Organization (PMO) during the visit of the Minister of Ports, Shipping and Waterways of India Sarbananda Sonowal to Iran.
As a result, India will operate the only Iranian port with direct access to the Indian Ocean, marking New Delhi's first overseas venture. Chabahar, located on Iran's southeastern coast along the Gulf of Oman, is crucial for India as it provides an essential route for transporting goods to Iran, Afghanistan, and Central Asian countries, bypassing the ports of Karachi and Gwadar.
"The significance of the Chabahar port extends well beyond the cooperation between India and Iran; it will become a crucial trade artery connecting India with Afghanistan and Central Asian countries. This connectivity not only opens up new trade opportunities but also enhances supply chain resilience across the region," stated Sarbananda Sonowal.
Importantly, plans are being drafted to integrate the Chabahar port with the North-South International Transport Corridor (ITC). This integration will enhance India's transport connection with Russia through Iran.
Iranian Minister of Roads and Urban Development, Mehrdad Bazrpash, highlighted that this agreement marks a new phase in trade relations between Iran and India.
To recall, India's negotiations with Iran on the joint development of the port began as early as 2003. In 2016, India, Iran, and Afghanistan signed an agreement for the construction of the Shahid Beheshti terminal in the port of Chabahar, which was commissioned in 2018. Now, the parties have agreed that Indian Ports Global Limited will invest $370 million in the development of the port.
It is crucial that plans are currently underway to integrate the Chabahar port with the North-South International Transport Corridor (ITC), which will facilitate India's transport connectivity with Russia through Iran.
According to Kommersant, the Indian logistics company Bharat Freight offers to transport containers through this port when delivered from the Indian port of Kandla to Moscow at a cost of 240,000 rubles per TEU in 11 days. This is in contrast to ocean delivery via the Suez Canal, which costs 414,000 rubles and takes 40 days.
Russian Railways Logistics is ready to start transportation through the port of Chabahar immediately after the completion of the construction of the adjacent railway network, Dmitry Murev, General Director of Russian Railways Logistics, told The Economic Times (India).
As previously reported by 1520International, the North-South ITC facilitated record levels of trade and economic cooperation between Russia and India, as 1520International reported previously during the 2022-2023 period, with exports from Russia to India surging by 4.7 times.
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