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India signs 10-year Chabahar Port pact with Iran

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Indian company, India Ports Global Ltd (IPGL) to invest approximately $120 million in Chabahar port

India on May 13 signed pact with Iran's Chabahar Port for the next 10 years. Indian Company, India Ports Global Ltd & Ports & Maritime Organisation of Iran (PMO) signed the new 10-year contract under which Indian side will equip and operate the Chabahar port for the duration of the contract.

In a significant milestone for the India- Iran relationship and to foster close cooperation to make Chabahar port a regional trade transit and connectivity hub, India and Iran on Monday signed the long-term contract for operating the Shahid-Beheshti Port Terminal in the presence of Indian and Iranian Ministers, according to official statement.

Indian company, India Ports Global Ltd (IPGL) to invest approximately $120 million in Chabahar port. India has also offered an INR credit window equivalent to $250 million, for mutually identified projects aimed at improving Chabahar-related infrastructure.

The Indian delegation to Iran was led by Minister of Ports, shipping and waterways Sarbananda Sonowal, while Mehrdad Bazrpash, Minister for Roads & Urban Development, was present from the Iranian side.

India has been developing a part of the port in Chabahar, located on Iran's southeastern coast along the Gulf of Oman, as a way to transport goods to Iran, Afghanistan and central Asian countries. The new deal with Iran will open up a trade route between South Asia and Central Asia via Iran, bypassing Karachi and Gwadar port in Pakistan.

Speaking on the occasion, the Union Minister of Ports, Shipping & Waterways and Ayush, Sarbananda Sonowal said, “Today is a historic day for the maritime sector of the region as India and Iran signed this Long Term Agreement on Chabahar Port heralding a new age of trade, marine cooperation as well as transshipment while boosting trilateral trade among India, Iran and Afghanistan. As India continues to invest in Chabahar Port, its efficiency and capacity will be further enhanced, solidifying India's commitment to the region's economic development."

"Under the dynamic leadership of Prime Minister Narendra Modi, India's sustained engagement in Chabahar underscores its role as an anchor for Indian trade in the region while enhancing its role in the Global Supply Chain. India will use the port for humanitarian aid shipments reaffirming its commitment to support regional development beyond commercial interests, showcasing its commitment to fostering goodwill and stability in the region.”

As part of the agreement, India wil procure MHCs, RMQCs, RTGCs, Reach Stackers, Forklifts, Pneumatic Unloaders etc at Chabahar Port. The agreement paves the way for enhanced trade and investment opportunities which will potentially boost India’s economic development.

Located in the Sistan-Baluchistan province on Iran’s south western coast, the Chabahar port is an important point on Arabian Sea with easy access from India’s west coast. Kandla port in Gujarat is the closest to the Chabahar port at 550 Nautical Miles while the distance between Chabahar and Mumbai is 786 Nautical Miles. Since 2019, it has handled container traffic of more than 80,000 TEUs and Bulk and General Cargo of more than 8 million tones.

This is the first time that India will take over the management of a port overseas. Chabahar is seen as India's key connectivity link to Afghanistan, Central Asia and the larger Eurasian space, will help counterbalance Pakistan's Gwadar port as well as China's Belt and Road Initiative.

There are plans to link Chabahar with the International North South Transport Corridor (INSTC) that connects India with Russia via Iran.

Source: Money Control 

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