See More on Facebook

Diplomacy

India-Iranian port deal a kickstarter for diplomatic relationship

Substantive discussions between Prime Minister Narendra Modi and the Iranian President, Hassan Rouhani, during his three-day visit to Delhi in mid-February have taken Indo-Iranian relations to a higher level.


Written by

Updated: March 7, 2018

Nine agreements were signed on such issues as avoidance of double taxation, Chabahar, terrorism and so on. The two sides exchanged instruments to ratify an Extradition Treaty signed in 2008.

However, it is the agreement relating to Chabahar that was the highlight of Rouhani’s visit. Under this deal, India will lease the Shahid Beheshti Port at Chabahar for a period of 18 months. India has committed $85 million towards developing Chabahar port, strategically located just 90 km from Pakistan’s Gwadar port, which is being operated by a Chinese company. It was only a few months ago that India began using Chabahar port to ship wheat to Afghanistan, providing a boost to its overland trade with Afghanistan, Central Asia and beyond. India and Iran have now taken their cooperation to the next level. With India now operating a part of Chabahar port, it has a stronger presence at the mouth of the Straits of Hormuz, through which much of India’s oil from the Gulf passes.

The operationalisation of Chabahar port, west of the Gwadar port developed by China, after Indian ratification ofthe International Road Transport (TIR) convention is going to be a game-changer in IndiaAfghanistan-Iran relations. In the next three years, India is committed to laying a 600-kilometre railroad from Chabahar port to Zahedan, which will provide seamless export of Indian goods and humanitarian assistance to Afghanistan via the ZalranjDelaram
axis without interference from Pakistan.

Zalranj in Nirmuz is connected to Chabahar while Delaram in Farah province has access to the Herat-Kandahar highway in Afghanistan. That Pakistan will do its utmost to play spoilsport is evident from the fact that Taliban looted two
of the 25 containers of wheat, sent to Afghanistan from Kandla port last October, near Mazar-eSharif.

The development of Chabahar port with the trilateral trade and transit agreement between India-Iran-Afghanistan will also open the international northsouth transport corridor all the way up to Central Asia, Russia and Europe. If India presses the accelerator and delivers on time, this route has the potential to rival the Chinese one-belt-oneroad (OBOR) initiative. Time is of the essence as it took 15 years for India and Iran to operationalise the Chabahar port after it was first proposed during the NDA dispensation under Atal Behari Vajpayee. While New Delhi put the project on the backburner due to its impact on international sanctions against Tehran at that time, the latter also proceeded slowly on the basis of its own priorities.

During President Rouhani’s visit, there were positive developments towards India having a stake in the “Farzad B” gas field in the Persian Gulf. With the Iran-Pakistan India pipeline not working out due to Islamabad’s intransigent attitude, the other option is to have a deep-sea pipeline via Chabahar or Bandar Abbas to Kandla port in Maharashtra to extract natural gas from Iran.

From the Indian perspective, apart from Chabahar and the trade corridor, the Iranian President’s visit is also a part of New Delhi’s efforts towards bridging the Shia-Sunni divide in West Asia. Before he hosted President Rouhani, Prime Minister Modi cemented ties with the UAE and Oman. India’s relations with West Asia will get an impetus when King Abdullah of Jordan arrives in New Delhi on February 28.

India-Iran-Afghanistan MoU and plans have committed at least $21bn to the ChabaharHajigak corridor, including $85m for the development of Chabahar port by India, $150m line of credit by India to Iran, $8bn India-Iran MoU for Indian industrial investment in Chabahar Special Economic Zone, $11-billion Hajigak iron and steel mining project awarded to seven Indian companies in central Afghanistan, and India’s $2bn commitment to Afghanistan for developing infrastructure including the Chabahar-Hajigaj railway, with the potential for more trade via connectivity to 7,200-km-long multi-mode North–South Transport Corridor (INSTC) connecting to Europe and Turkey, R297 Amur highway and Trans-Siberian Highway across Russia, and planned Herat to Mazar-i-Sharif railway providing access to Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan. Chabahar Port also provides direct access to India’s Farkhor Air Base in Tajikistan. The Chabahar route will result in 60 per cent reduction in shipment costs and 50 per cent reduction in shipment time from India to Central Asia.

India and Iran first agreed to plans to further develop Shahid Beheshti port in 2003, but did not do so on account of sanctions against Iran. As of 2016, the port has ten berths. In May 2016, India and Iran signed a bilateral agreement in which India would refurbish one of the berths at Shahid Beheshti port, and reconstruct a 600-meter-long container handling facility at the port. The port is intended to provide an alternative for trade between India and Afghanistan. This port is 800 kilometers closer to Afghanistan than Pakistan’s Karachi port. The port handled 2.1 million tons of cargo in 2015 to be upgraded to handle 8.5 million tons by 2016, and to 86 million tons in the future.

In July 2016, India began shipping $150 million worth of rail tracks to Chabahar to develop the port container tracks and build $1.6 billion Chabahar Zahedan railway built by India’s Ircon International for which India pledged an additional $400 million and Iran allocated $125 million in December 2016, thus taking the total allocation to $575 million (out of $1.6 billion needed for the rail route) till the end of 2016.

The trilateral transit agreement signed by India, Iran and Afghanistan allows Indian goods to reach Afghanistan through Iran. It links ports in the western coast of India to the Chabahar port and covers the road and rail links between Chabahar and the Afghan border.

The bilateral agreement between India and Iran gives India the right to develop two berths of the Chabahar port as agreed in 2015 and allows them to be operated for 10 years by India Ports Global, a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust, in partnership with Iran’s Aria Banader. India Ports Global has guaranteed handling of 30,000 TEUs by the third year of operations, and aims to eventually handle 250,000 TEUs.

The berths will be developed at a cost of $85 million over the course of 18 months. Under the agreement, India Ports Global will refurbish a 640-meter-long container handling facility, and reconstruct a 600-meter-long container handling facility at the port. India Ports Global will modernize ancillary infrastructure by installing four railmounted “gantry cranes”, 16 rubber-tyre gantry cranes, two reach stackers, two empty handlers, and six mobile harbour cranes. India will also develop various industries, including aluminum and urea production plants, in the Chabahar economic zone attached to the port.

Iran’s ambassador to Pakistan, Mehdi Honardoost, stated that Pakistan and China had both been invited to contribute to the project before India, but neither China nor Pakistan had expressed interest in joining.

(This article originally appeared in the Statesman)



Enjoyed this story? Share it.


ANN Members
About the Author: Asia News Network is a regional media alliance comprising 24 media entities.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Diplomacy

New airport construction adds to China’s influence in the Maldives

Maldives airport opened a new runway constructed by China this week, a sign of Beijing’s growing influence on the island nation. Maldives airport opened its newly developed Code F runway at the Velana International Airport on Tuesday after two years of construction by Chinese firms. According to Chinese state media, the new runway is a milestone project of the Belt and Road Initiative. The contract for the airport expansion, including the development of the fuel farm, a cargo terminal, and the new runway, was signed between China and the Maldives in 2014, Xinhua News Agency reported. Constructed by Beijing Urban Construction Group, a large international construction group based in China, the new runway is 3,400 meters long and 60 meters wide. It is the latest push by China to gain influence over the politically troubled nation. Earlier this year, Maldivian President Abdulla Y


By Cod Satrusayang
September 20, 2018

Diplomacy

Kim vows to visit Seoul, dismantle nuke, missile sites

North Korean leader Kim Jong-un on Wednesday pledged to visit Seoul and reaffirmed commitment to giving up his country’s nuclear program. The Pyongyang Joint Declaration of September 2018 signed by the two l


By The Korea Herald
September 20, 2018

Diplomacy

El Salvador ups pressure on Taiwan relations

Prosecutors in El Salvador to investigate the alleged graft of some $10 million in funds donated by Taiwan. El Salvador announced it would sever ties with Taiwan and switch its allegiance to Beijing on 21th August. The loss of the Central American country reduces the number of Taiwan’s formal diplomatic allies to just 17. Now the current president of El Salvador, Sanchez Ceren, is accused that he won the election by relying on partial fund which was donated by Taiwan in 2014. Prosecutor Douglas Melendez said in a TV interview that Taiwan gave $38 million to El Salvador for various projects, but the fund was used in a partisan campaign by Mauricio Funes in election won by current President Salvador Sanchez Ceren, the presidential candidate of the FMLN party in 2014. The FMLN party calling the accusations “baseless” and accusing Melendez of “attacking our candidate and o


By Asia News Network
September 20, 2018

Diplomacy

US suspension of aid not a ‘life or death situation’ for Pakistan, says navy chief

Pakistan’s navy chief said though the decision by US to suspend security assistance to Pakistan was not a favourable one, it was not a life or death situation. Pakistan Navy Chief Admiral Zafar Mahmood


By Dawn
September 19, 2018

Diplomacy

-UPDATE- Kim meets Moon in Pyongyang

The North Korean leader says he expects progress at next summit with Trump and agrees to denuclearisation of Korean peninsula. North Korean leader Kim Jong-un on Wednesday pledged to visit Seoul and reaffirmed


By The Korea Herald
September 19, 2018

Diplomacy

Stable ties will help China and Japan to address regional issues

Shinzo Abe is due to visit the Chinese capital to discuss normalizing ties and bilateral cooperation. Toshihiro Nikai, secretary-general of Abe’s ruling Liberal Democratic Party, paid a visit to Beijing on Aug 29. Vice-President Wang Qishan told the LDP’s No. 2 leader that China was ready to work with Japan to inject more positive energy into bilateral relations. After his trip to Beijing late last month, Japanese Vice-Foreign Minister Takeo Akiba said he had made arrangements with Chinese officials “in an active manner” for Abe’s visit to China. And Japanese Finance Minister Taro Aso, who was in Beijing on Aug 31 to attend a financial dialogue with his Chinese counterpart, said Tokyo and Beijing are making efforts to “achieve tangible results” for a possible summit between Abe and President Xi Jinping. The next Japanese leader to visit China was Natsuo Y


By China Daily
September 18, 2018