India has officially agreed to enter into a 10-year partnership with Iran to develop and manage the strategic Chabahar Port. This move comes as part of India’s efforts to strengthen trade relationships with Afghanistan and Central Asian countries, bypassing ports in Pakistan, its neighboring rival.
The deal has been hailed by India’s Shipping Minister Sarbananda Sonowal as a key trade route connecting India with Afghanistan and Central Asian countries. However, the agreement has raised concerns about potential US sanctions, with the United States warning entities against doing business with Iran.
Despite the US threats, Indian authorities are downplaying the tensions. Foreign Minister Subrahmanyam Jaishankar has indicated that they will communicate the benefits of the deal to the US and emphasize the importance of taking a broader view of the situation.
The Chabahar port deal involves India Port Global Limited (IPGL) and the Ports and Maritime Organization (PMO) of Iran. The agreement will allow India to upgrade and manage one terminal at the port over the next decade. The port, situated in Sistan-Baluchestan province on the Gulf of Oman, consists of two separate ports – Shahid Kalantari and Shahid Beheshti.
India’s investment in the project amounts to $120 million for equipping the terminal in Shahid Beheshti, with an additional $250 million loan credit facility for related projects. The initiative aims to provide an alternative trade route to Afghanistan and landlocked countries in Central Asia, bypassing Pakistan.
The strategic importance of the Chabahar port lies in its potential to enhance India’s trade relations with neighboring countries, particularly as it seeks alternative routes due to strained relations with Pakistan. The port also serves as a key component of the International North-South Trade Corridor (INSTC) project, connecting major cities like Mumbai and Baku through Iran.
While concerns about potential US sanctions loom, experts believe that any sanctions on India are likely to be limited and contained, given the strong economic and strategic ties between the two countries. India’s willingness to proceed with the Chabahar project despite US pressure may signal a shift in global power dynamics and the willingness of countries to pursue their own interests despite external pressures.