Iran’s Chabahar – India’s Port of Profit

Highlights
  • Six more wheat shipments will be sent to Afghanistan over the next few months.

Iran’s key strategic port of Chabahar became operational with the maiden shipment of wheat from India to Afghanistan flagged off on Sunday by the foreign ministers of the three countries through video-conferencing.

This is a major push for India’s Afghan outreach bypassing Pakistan — for the first time under the 2016 Indo-Afghan-Iran trilateral pact.

External Affairs Minister Sushma Swaraj, Foreign Minister of Afghanistan Salahuddin Rabbani and Iranian Foreign Minister Javad Zarif, through a joint video conference on Sunday, flagged off the shipment from India to Afghanistan that would be transhipped through the Chabahar port in Iran. The operationalisation of Chabahar will also boost India’s efforts to conenct with resource-rich Central Asia and Russia.

The shipment is a part of commitment made by India to supply 1.1 million tonnes of wheat for the people of Afghanistan on grant basis, according to a MEA statement.

“The three foreign ministers welcomed the fact that this is the first shipment that would be going to Afghanistan through the Chabahar port after a trilateral agreement on Establishment of International Transport and Transit Corridor was signed during the visit of the Indian Prime Minister to Iran in May 2016,” the statement pointed out.

Six more wheat shipments will be sent to Afghanistan over the next few months.

Sunday’s development will pave the way for operationalisation of the Chabahar port which is being expanded by India as an alternate, reliable and robust connectivity for Afghanistan following Pakistan’s refusal to allow India access via its territory to Afghanistan. It will open up new opportunities for trade and transit from and to Afghanistan and enhance trade and commerce between the three countries and the wider region, the MEA statement said.

India, according to officials, plans to set up a panel of secretaries on development of Chabahar. The panel will look into issues related to easing of financial terms and other contractual issues in order to make the project more lucrative for private investors.

In this context, India is eyeing to gain foothold in the thriving free trade zone in Chabahar. The formation of the panel comes at a time when US is hardening its position over Iran and has decertified the 2015 nuclear deal between Tehran and world powers. Russia and Europe, however, have decided to continue engagement with Iran.

India has announced an investment of $500 million in the Chabahar port complex and is hopeful that the strategic port will be operational by the end of 2018. India’s Shipping, Road Transport, Highways Minister Nitin Gadkari visited Tehran in August to attend the inauguration of President Hassan Rouhani’s second term in office.

Earlier this year Tehran offered New Delhi a proposal to manage phase one of the Chabahar port built by Iran. Tehran had offered New Delhi management rights for two years for phase one of the port and such rights could be renewed by another decade.

India’s allotment of 235 million USD for Chabahar port expansion is divided into two parts -$150 million Line of Credit (LoC) from the EXIM Bank for development of port complex and $85 million – for supply of equipment to develop two berths in the port.

A Special Purpose Vehicle has been created by the Indian Shipping Ministry for development of phase two of the Iranian port. On the Iranian side, Ports and Management Organisation is the nodal authority for implementing the project. India has been given the rights to operate two berths and few terminals in the phase two of the port.

India is also constructing a railway line between Chabahar and Zahedan to connect the port to rest of the Iranian railway network. The port, through this railway network, could also be linked with the International North South Transport Corridor connecting India with Russia.

Chabhar is planned to be linked with Delaram-Zaranj road, built by India in Afghanistan that connects at Afghan-Iran border via rail through Zahedan. A road already connects the Iran-Afghan border point to Chabahar.

By: ET

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