India to sign 10-year agreement with Iran on management of crucial Chabahar Port

Union Shipping Minister Sarbananda Sonowal left for Iran on Monday to sign the crucial deal, according to sources. The Chabahar Port is very important for India's strategic and economic interests as it allows India to bypass Pakistan to reach Afghanistan, Iran and other nations.

New Delhi: India is expected to sign an important deal with Iran that will give it management control over a part of the crucial Chabahar port for the next 10 years, the Economic Times reported on Sunday. External Affairs Minister S Jaishankar on Monday said that India expects a "long-term arrangement" with Iran on the Chabahar port management.

Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal on Monday boarded a special Indian Air Force flight for Iran and is expected to witness the signing of the crucial Chabahar port agreement between the two countries, sources told news agency ANI. India has been developing part of the port in Chabahar on Iran's southeastern coast along the Gulf of Oman as a way to transport goods to Iran, Afghanistan and central Asian countries, bypassing its rival Pakistan.

"As and when a long-term arrangement is concluded, it will clear the pathway for bigger investments to be made in the port," Indian Foreign Minister S Jaishankar told reporters in Mumbai. A source close to the shipping ministry said Sonowal is expected to witness the signing of a "crucial contract" that would ensure a long-term lease of the port to India.

Why is the Chabahar Port important?

The Chabahar port, on which India invests heavily, has strategic and economic significance for New Delhi. It allows India to bypass Pakistan's ports in Karachi and Gwadar and reach land-locked Afghanistan and Central Asian countries. Besides, the Port is also considered a counter-response to China's most touted Belt and Road Initiative.

It also opens up a new vista of economic opportunities for business communities to explore an alternative transit route from the sensitive and busy Persian Gulf and Strait of Hormuz. However, US sanctions on Iran have slowed the development of the port. Chabahar is a key component of India's growing connectivity initiatives.

India aims to make Chabahar Port a transit hub under the International North-South Transport Corridor (INSTC) to reach out to CIS (Commonwealth of Independent States) countries. INSTC is India's vision to economise the movement of cargo between India and Central Asia, and the Chabahar Port would act as a commercial transit centre for the region.

India-Iran agreement on Chabahar development

In January, India and Iran had signed an agreement on further development of Chabahar port after Jaishankar held wide-ranging talks with Iran's Minister of Roads and Urban Development, Mehrdad Bazrpash, during his visit to Tehran. The two sides agreed to finalise the deal inked between Iran and India on the development of the port.

Iran’s roads minister also proposed setting up a joint transportation committee for the expansion of bilateral cooperation and said the formation of the committee will activate the transit capacities and use of the International North-South Transport Corridor (INSTC), reported Tasnim News Agency. Jaishankar, on his part, expressed the readiness of New Delhi to launch new investments at the Chabahar Port in the fields of transportation and transit.

Earlier in 2017, the first phase of Chabahar Port was developed and launched by then-President Hassan Rouhani. While China has been developing Gwadar port under the China-Pakistan Economic Corridor (CPEC) project, India announced to build and operate Chabahar port investing $500 million. The deal was sealed during Prime Minister Narendra Modi's visit to Iran in 2016.

(with inputs from agencies)

ALSO READ | Iran warns of changing nuclear doctrine amid tensions with Israel

ALSO READ | Iran releases five Indian sailors from seized Israeli-linked MSC Aries vessel