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May 13, 2024

India to Sign Landmark 10-Year Agreement with Iran, Solidifying Chabahar Port Management

India is poised to embark on a historic journey by signing a landmark agreement with Iran to oversee the management of Chabahar Port for the next decade. This strategic move marks India’s first foray into managing a port overseas, with Shipping Minister Sarbananda Sonowal set to travel to Iran for the signing ceremony on Monday.

Plans are underway to integrate Chabahar Port with the International North South Transport Corridor (INSTC), which will bolster India’s connectivity with Russia via Iran. By leveraging Chabahar Port, India aims to circumvent Pakistan and establish direct access to Afghanistan and beyond, reaching into Central Asia.

Chabahar Port holds immense strategic importance for India as it serves as a crucial link connecting the country to Afghanistan, Central Asia, and the broader Eurasian region. Furthermore, this initiative serves as a counterbalance to Pakistan’s Gwadar port and China’s Belt and Road Initiative.

Discussions on the development of Chabahar date back to 2003, with India committing $100 million towards its development in 2013. The partnership on Chabahar Port was formalized in 2016 during Prime Minister Narendra Modi’s visit to Iran, with India agreeing to invest $85 million in the Shahid Beheshti terminal’s development.

In 2018, then Iranian President Hassan Rouhani discussed expanding India’s role in the port, a topic that has since been revisited during subsequent high-level exchanges. While the existing pact covers operations at the Shahid Beheshti terminal and is renewed annually, the new 10-year agreement is designed to provide a more robust framework for India’s involvement in Chabahar Port’s operations, superseding the original contract.

Landlocked Central Asian nations such as Kazakhstan and Uzbekistan stand to benefit significantly from leveraging Chabahar as a gateway to the Indian Ocean Region and Indian markets.

The timing of this 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.

In April, the Ministry of External Affairs (MEA) approved a proposal for India Ports Global to assume operational control of Myanmar’s Sittwe Port in the Bay of Bengal. Sonowal’s visit during this critical juncture underscores the importance of the impending agreement, which has been in the pipeline for several years.

India’s move to sign this 10-year agreement with Iran signals its commitment to enhancing regional connectivity and strengthening its presence in the strategic Chabahar Port, further cementing its position in the geopolitics of the region.

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