India defies US pressure and seals 10-year Chabahar Port pact with Iran

The Indian government, led by Prime Minister Narendra Modi, on Monday announced the signing of a significant 10-year contract with Iran aimed at the development and operation of the Chabahar port. The is pivotal in strengthening bilateral relations with Iran, a key nation in the Middle East.

The Chabahar port, situated on Iran’s south-eastern coast along the Gulf of Oman, has been a focal point of India’s strategic interests, serving as a crucial gateway for trade routes to Iran, Afghanistan, and Central Asian countries.

This initiative is particularly aimed at bypassing the ports of Karachi and Gwadar in Pakistan. However, progress on the port’s development was hindered by US sanctions on Iran.

India’s Shipping Minister, Sarbananda Sonowal, emphasized the broader significance of the Chabahar Port beyond facilitating India-Iran trade, highlighting its role as a vital trade artery connecting India with Afghanistan and Central Asia, thereby enhancing regional trade and supply chain resilience.

US warns of sanctions

In response to the deal, the US State Department reiterated its stance on maintaining sanctions on Iran, cautioning entities engaging in business with Iran about the associated risks.

The long-term agreement was formalized between Indian Ports Global Limited (IPGL) and the Port & Maritime Organization of Iran. As part of the deal, IPGL will invest approximately $120 million, supplemented by an additional $250 million in financing, totaling the contract’s value to $370 million, according to Iranian Minister of Roads and Urban Development Mehrdad Bazrpash.

Since assuming operational control at the end of 2018, IPGL has managed substantial container traffic and bulk cargo at the port, with over 90,000 TEUs and 8.4 million tonnes handled thus far, as per an Indian government official. Notably, the port has facilitated the shipment of 2.5 million tonnes of wheat and 2,000 tonnes of pulses from India to Afghanistan.

Indian Foreign Minister Subrahmanyam Jaishankar expressed optimism about the agreement, emphasizing its potential to attract more significant investments into the Chabahar port during a media interaction in Mumbai.

Read More: Defence minister confident in Iran-Pak gas pipeline completion despite US warning

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