India takes over the operations of a part of Chabahar Port in Iran during the Chabahar Trilateral Agreement meeting held on December 24, 2018 in Iran.
Chabahar route will result in a 60% reduction in shipment costs and 50% reduction in shipment time from India to Central Asia. India on October 29, 2017 sent its first consignment of wheat to Afghanistan through Iran’s Chabahar port.
India started interacting with Iran on Chabahar Port around the year 2003. However, the major push received in the second half of 2014. Leading to the signing of a MoU between Iran and India for the development of Chabahar Port in May 2015.
This MoU translated into a formal 10-year Contract for Equipping and Operating the Chabahar Port, which executed on May 23, 2016, during PM Narendra Modi’s visit to Tehran.
Furthermore, a trilateral transit agreement was also signed on May 23, 2016 between India, Iran and Afghanistan on Establishment of International Transport and Transit Corridor.
Since there were challenges in activation of the 10-year contract. the foundation of an interim period contract laid during the visit of President of the Islamic Republic of Iran, Hassan Rouhani to New Delhi in February 2018.
Hence, on 6th May, 2018 a formal short term Contract signed .
Chabahar port and its strategic importance
- Its location lies in the Gulf of Oman.
- Chabahar Port is a seaport in Chahbahar in southeastern Iran.
- It is the only Iranian port with direct access to the Indian Ocean.
- Being close to Afghanistan and the Central Asian countries.
- The port has also called the Golden Gate to these land-locked countries.
- Chabahar Port was partially built by India in the 1990s to provide access to Afghanistan and Central Asia, bypassing Pakistan under the Ashgabat Agreement.
- Reduced transportation costs will allow India to import crude oil, urea and dry fruits at lower prices.
- Besides, land-locked country Afghanistan’s dependence on Pakistan for sea-access will be significantly reduced.
- It will provide India access to the Middle East and Gulf countries increasing trade and ties.
- Also, it is the nearest port to India on the Iranian coast. It will provide access to the resources and markets of Afghanistan and Central Asia.
How it will be beneficial for India?
The Chabahar port in the Sistan-Balochistan province in the southern coast of Iran is easily accessible from India’s western coast. Furthermore, the Port is increasingly seen as a counter to Pakistan’s Gwadar Port located at a distance of around 80 km from Chabahar.
In other words, the Chabahar port is being considered as a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries.
The port will provide alternative access to trade with Afghanistan bypassing Pakistan as well.
Chabahar Port will boost trade among the three countries in the wake of Pakistan denying transit access to New Delhi. It will ultimately lower Pakistan’s strategic hold on Afghanistan.