India is set to sign an agreement with Iran to manage Chabahar Port for the next 10 years.
India To Sign 10-Year Deal With Iran To Manage Chabahar Port
The move, in the midst of hectic election season, is regarded as a significant geopolitical outreach to Iran that will have major regional ramifications. Shipping minister Sarbananda Sonowal is to travel to Iran for the signing on Monday.
The short-term agreement and the geopolitical nature of the country has kept investors and shippers on the back foot when it comes to investing there. The port, operated by India’s state-owned India Ports Global, was seen as the gateway to unlocking India’s trade potential with European countries, as it is a shorter route to Europe. INSTC route takes 15 days less than the Suez Canal route for shipments to be transported.
Chabahar Port Agreement
Discussions on the development of Chabahar dates back to 2003. In 2013, India had committed to investing $100 million towards the development of Chabahar. The partnership on Chabahar Port was finally established in 2016 during Prime Minister Narendra Modi’s visit to Iran. During this time, India also agreed to invest $85 million in the development of the Shahid Beheshti terminal. In 2018, then Iran president Hassan Rouhani had further discussed expanding India’s role in the port and has since come up during subsequent high-level exchanges.
Heightened political and geopolitical tensions
The timing of the agreement coincides with the escalating crisis in West Asia following Israel’s attack on Palestine, which has disrupted key trade routes and accentuated the urgency of bolstering regional connectivity.
