Chabahar
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Revision as of 11:58, 14 June 2016
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Indo-Iran port deal
India to sign port deal with Iran, ignoring US warning against haste
May 5, 2015
India and Iran agreed in 2003 to develop a port at Chabahar on the Gulf of Oman, near Iran's border with Pakistan, but the venture has made little progress because of western sanctions on Iran.
India and Iran agreed in 2003 to develop a port at Chabahar on the Gulf of Oman, near Iran's border with Pakistan, but the venture has made little progress because of western sanctions on Iran.
Now, spurred on by Chinese President Xi Jinping's signing of energy and infrastructure agreements with Pakistan worth $46 billion, Modi wants to swiftly sign trade deals with Iran and other Gulf countries.
Encouraged by the prospect of a deal between world powers and Tehran by June 30, 2015 on Iran's nuclear programme, after which sanctions could be eased, India recently sent a delegation to Iran to scout for trade, energy and infrastructure deals.
Iran has also proposed a free-trade agreement with India, a trade ministry source said. Rupee-denominated trade with Iran, started in 2012 because of complications arising from sanctions, has almost doubled Indian exports to Tehran in the past two years to $4 billion.
Now Indian exporters want to build on that, using a free-trade zone being developed near Chabahar to export more to the Commonwealth of Independent States, made up of former Soviet Republics, said Mumbai-based Khalid Khan, regional head of the Federation of Indian Export Organisations.
"It will be Modi's gift to Iran and Indian exporters," he said of the port project.
BYPASSING PAKISTAN
India wants to build the port as it would cut transport costs and freight time to Central Asia and the Gulf by about a third.
The port is also central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.
India has already spent about $100 million to construct a 220-km (140-mile) road in western Afghanistan to link up with Chabahar port.
Chabahar is just along the coast from Gwadar port in Pakistan that is being developed with China's help, said Robin Mills, head of consulting at Dubai-based Manaar Energy. "So there is a strategic element for the Indian side".
