India and Iran on Monday signed a 10-year agreement to operate a terminal at the strategically important Chabahar port in Iran. Sabahar is a deep-water port in the Sistan-Baluchistan province of Iran. It is the Iranian port closest to India and is located on the open sea, providing easy and safe access for large cargo ships.
Union Minister for Shipping, Ports and Waterways Sarbananda Sonowal witnessed the signing of the agreement between India Ports Global Limited (IPGL) and Iran’s Ports and Maritime Organization (PMO) in Tehran.
IPGL will invest around $120 million to operate the port for the duration of the contract, after which both sides will further expand their cooperation in Sabah. India has also provided an equivalent credit window of $250 million for mutually identified projects to develop port-related infrastructure.
Project work- slow start
Modern Sabah emerged in the 1970s, realizing the strategic importance of the port of Tehran during the Iran-Iraq War of the 1980s.
In 2002, Hassan Rouhani, then Iran’s National Security Adviser under President Syed Mohammad Khatami, discussed with his Indian counterpart Prajesh Mishra the development of the port, located 72 km west of Pakistan’s Gwadar port.
In January 2003, President Khadami and then Prime Minister Atal Bihari Vajpayee signed an ambitious blueprint for strategic cooperation. One of the major projects agreed upon by the two countries was Chabahar, which had the potential to connect South Asia with the Persian Gulf, Afghanistan, Central Asia and Europe.
The New Delhi Declaration signed by the two leaders recognized that the countries’ “growing strategic integration must be underpinned by a strong economic relationship”. For India, Sabahar was of great strategic and economic importance as it provided a route to reach Afghanistan – land access blocked by a hostile Pakistan.
But India’s burgeoning relationship with the United States under President George W. Bush overturned the ambitious timeline for the project. The United States, which had declared Iran along with Iraq and North Korea as part of the “axis of evil,” pushed New Delhi to abandon its strategic relationship with Tehran, and the Chabahar project became a casualty.
Progress after 2015
Even as India spent about $100 million to connect a 218-km road from Delaram in western Afghanistan to Jaranj on the Iran-Afghanistan border with Sabah, the port project itself progressed at a glacial pace. But things started to change after talks between Iran and the P-5+1 in 2015.
About three weeks after Iran and world powers announced their framework agreement on April 2, 2015, pledging to finalize a comprehensive deal by the end of June, then Afghan President Ashraf Ghani visited India and emphasized the importance of the Chabahar port.
Development in recent years
India has so far delivered six mobile harbor cranes (two of 140 tonnes and four of 100 tonnes capacity) and other equipment worth $25 million.
IPGL through its wholly owned subsidiary India Ports Global Chabahar Free Zone (IPGCFZ) has been operating the Chabahar Port since December 24, 2018. The port has handled more than 90,000 twenty-foot equivalent units (TEUs). 8.4 million metric tons (MMT) of gross and general cargo since then.
Chabahar and INSTC
By enabling long-term investment, Chabahar could become an important hub connecting India with Central Asia and Afghanistan. However, to better realize its commercial and strategic potential, the port’s development needs to be integrated with the larger connectivity project of the International North South Transport Corridor (INSTC).
INSTC, launched by Russia, India and Iran, is a multi-modal transport corridor planned to connect the Indian Ocean and Persian Gulf to the Caspian Sea via Iran and to Northern Europe via St Petersburg, Russia.
INSTC envisages transportation of goods by sea from Mumbai to Bandar Abbas in Iran; By road from Bandar Abbas to Bandar-e-Anjali, an Iranian port on the Caspian Sea; Bandar-e-Anjali by ship across the Caspian Sea to the Caspian port of Astrakhan in the Russian Federation; By rail to the Russian Federation and other parts of Europe.
Punchok Stopton, senior fellow at the Institute for Defense Studies and Analyzes (IDSA) and former Indian ambassador to Kyrgyzstan, wrote in IDSA magazine in June 2017, “INSTC and Chabahar Port will complement each other to improve India’s connectivity with Russia. and Eurasia”. However, the war in Ukraine and the destruction of Europe’s relationship with Russia have complicated the future of this project.
