Sarbananda Sonowal, the minister of ports and shipping, departed for Iran on Monday in order to sign a significant long-term agreement for India’s operations at the vital Chabahar port.
The two parties had been negotiating the long-term agreement for the last three years or so. It will be automatically extended after ten years and be largely delayed by disagreements over an arbitration clause.
It will take the place of the original agreement, which was renewed yearly and covered India’s operations at the Shahid Beheshti terminal of the Chabahar port, which was signed in 2016.
Sonowal Heads to Iran to Finalize 10-Year Agreement for Chabahar Port
Sonowal took a special Indian Air Force (IAF) flight from New Delhi to Tehran, and according to people with knowledge of the situation on both sides, his visit was related to the signing of a 10-year contract for the state-run India Global Ports Limited (IGPL) Shahid Beheshti terminal’s operations.
A person with knowledge of the most recent events in Tehran stated that “the long-term agreement on the Shahid Beheshti terminal is expected to be signed today [Monday].”
The timing of Sonowal’s visit coincided with India’s general election, highlighting the significance of Chabahar port and New Delhi’s bold plans to establish improved connectivity with Iran, Afghanistan, and the landlocked Central Asian states.
India, Iran to sign 10-year agreement for operations at Chabahar port#ChabaharPort #India #Iran #PowerCorridors pic.twitter.com/a8MYgGGbZy
— POWER CORRIDORS (@power_corridors) May 13, 2024
The action also takes place at a time when Beijing is under pressure from Tehran to pursue the development of additional terminals at Chabahar port, as China has been increasingly interested in investing in Iranian ports and other coastal infrastructure.
Chabahar Port: A Key Node in the International North-South Transport Corridor
Chabahar is viewed by both India and Iran as a hub for the International North-South Transport Corridor (INSTC), which will enable shipping companies to take a different route around the busy and delicate Persian Gulf and Strait of Hormuz.
More than 4.8 million tonnes of bulk cargo, including transshipments from Australia, Bangladesh, Brazil, Germany, Russia, and the United Arab Emirates, have been handled by IPGL since it started operations at the Shahid Beheshti terminal in late 2018.
In accordance with a tripartite agreement on Chahbahar signed in May 2016 with Iran and Afghanistan, India began construction of the Shahid Beheshti terminal. Since the Taliban took control of the nation in 2021, Afghanistan is essentially no longer a part of the arrangements, but Chabahar Port has profited from a US waiver of sanctions placed on Iran.
India has contributed cranes and other equipment valued at approximately $24 million to the terminal, fulfilling its commitment to invest $85 million in it.
