India, Iran Sign 10-Year Agreement to Develop Strategic Chabahar Port Project

Tue May 14 2024
icon-facebook icon-twitter icon-whatsapp

TEHRAN, Iran: India and Iran on Monday signed a 10-year deal to develop and equip Iran’s strategic Chabahar port as India seeks to grow trade in West and Central Asia.

According to Iran’s Ministry of Roads and Urban Development, the agreement will give India access to use the port, which is located near Iran’s southeastern border with Pakistan, for 10 years.

Under the contract, India Ports Global Limited (IPGL) will invest $370 million in “provision of strategic facilities” and “development of the port’s transport infrastructure”.

The United States, which has warm ties with India but long hostile relations with Iran, reluctantly accepted the port project when the US military was in Afghanistan, seeing New Delhi as a valuable partner to support the Kabul government, which fell in 2021.

But Washington warned on Monday that Indian companies could face sanctions as US relations with Iran soured over Tehran’s support for Hamas in its war with Israel.

Iran’s Minister of Urban Development Mehrdad Bazrpash and India’s Minister of Ports and Shipping Sarbananda Sonowal signed the agreement in the city of Chabahar in a ceremony broadcast live by state media.

In 2016, India agreed to finance the development of an Iranian port as a trade hub for Central Asia as Prime Minister Narendra Modi sought to revive economic ties with Tehran after sanctions were lifted.

Modi and former Iranian President Hassan Rouhani oversaw the signing of a memorandum of understanding to provide a line of credit from India’s EXIM Bank for the development of the port.

But development of the port has stalled, despite sanctions waivers that the United States reimposed in 2018 after withdrawing from the landmark 2015 Iran nuclear deal.

“Chabahar… can act as a focal point in the transit developement of the region,” Bazrpash was heard saying at the signing ceremony.

India Iran Sign 10 Year Agreement to Develop Strategic Chabahar Port Project

“We are pleased with this agreement, and we have full trust in India,” he added.

In Washington, the State Department said there would be no exemptions from US sanctions for Indian companies in Chabahar.

As far as the United States is concerned, US sanctions against Iran remain in place and will continue, State Department spokesman Vedant Patel said.

Any entity – anyone – involved in trade deals with Iran needs to be aware of the potential risks they are opening themselves up to and the potential risk of sanctions, he added.

In 2019, before the Covid pandemic, the two countries agreed to speed up the project after the visit of Indian External Affairs Minister Subrahmanyam Jaishankar to Tehran.

The port of Chabahar is located in the Indian Ocean about 100 kilometers (62 mi) west of the Pakistani border. Pakistan, India’s historical rival, is developing its Gwadar port with China’s support.

READ ALSO: Hamas Condemns Biden Remarks on Hostages as ‘Setback’ for Gaza Truce Talks

icon-facebook icon-twitter icon-whatsapp