Latest revision as of 21:13, 15 May 2024

Chabahar port: Some factual information; Graphic courtesy: The Times of India, May 25 2016

[edit] Indo-Iran port deal

[edit] History

The Times of India

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.

[edit] 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".

[edit] India resisted US pressure

Resisted US pressure on Chabahar: India, July 25, 2020: The Times of India

India has said it is working on Chabahar port as a “new port” and had resisted US pressure to keep the port going.

In a media interaction in Tehran recently, Indian envoy to Iran Gaddam Dharmendra said that in just one year, Chabahar has seen traffic of 6000 TEU and over a million tons of “bulk cargo”, that is rice, wheat, sugar, etc for both Iran and Afghanistan. But the port is still in its development phase, he said. “We’re working on Chabahar, we’re buying equipment for Chabahar, we’re preparing for Chabahar,” he said.

“Currently, Indian partners are using Iranian facilities in the port but we have placed orders for the necessary equipment from China, Italy, Finland, and Germany and hope that the first delivery will be in October.” he said.

However, government sources said India was trying to replace the Chinese and German companies as suppliers with others. The Chinese firm ZPMC and German company Liebherr are two of the suppliers, but Indian government officials said they have decided not to go ahead with them because they have been seen to be adding to the delays in the port improvement projects. The Chinese firm is actually one of the world’s only two suppliers of specialised cranes. In the current atmosphere of tensions with China, having a Chinese supplier in Chabahar may not also be welcome.

[edit] 2016

[edit] India had to stave off China to ink port agreement with Iran

The Times of India, May 25 2016

Sachin Parashar

India's commercial contract with Iran for development of Chabahar port has come not a moment too soon for the government.Notwithstanding its presence at Pakistan's Gwadar, where it has developed and acquired operational control of a port, China has also looked to invest in the development of Chabahar port.

Only in April 2016, a Chinese consortium visited the Chabahar free trade zone and expressed interest in developing the port and also building an industrial town there. The head of the Chinese consortium which visited Chabahar was quoted as having said that Chinese companies were eager to invest in the strategically located port and free trade zone.

This followed the visit by Chinese President Xi Jinping to Iran in January 2016 when the two countries mentioned in their joint statement development of ports as one of the areas where they could have tangible cooperation.

The inter-governmental MoU signed by union minister Nitin Gadkari in 2015 for developing Chabahar was also seen as India's response to the interest shown in the Iranian port by China Harbour Engineering Company which runs the Gwadar port in Pakistan.

India had to move quickly in the past few months not just to sign the contract between IPGPL (India Ports Global Private Limited) and Iranian firm Arya Banader but also a confirmation statement between EXIM Bank and Central Bank of Iran confirming availability of credit up to Rs 3000 crore for the import of steel rails and implementation of India's Chabahar port commitment. According to Indian offici als, the contract envisages India's investment and participation in the first phase of Chabahar port which involves development of two terminals and five berths with multi-cargo capacity . The contract also comes with specific timelines for its implementation.

India's desperation to seal the contract, in fact, also stemmed from Iran's own conduct in the past few months with Tehran seemingly playing both ends for a while. Even after India had signed the MoU for developing Chabahar last year, Iran's ambassador to India Gholamreza Ansari had warned that New Delhi needed to look at benefiting from business opportunities in Iran, once the international sanctions on Tehran were lifted, and not waste time in “cheap negotiations“.

The Sistan and Baluchestan governor, Ali Osat Hashemi, hosted another Chinese delegation at Chabahar in October 2015 and announced that Iran would be glad to work with Beijing and provide it with lucrative business opportunities as it had always stood by Iran. He had said he would discuss investment possibilities in Chabahar with both China and Pakistan.

Any sizeable presence of the Chinese in Chabahar will be resented by India even as Beijing's presence grows elsewhere in Iran. Unlike India, Iran has welcomed China's Maritime Silk Road initiative and, compared to its annual trade volume of $9 billion with India, Iran's trade with China stands at $52 billion. According to many in the government, Chabahar is also important for India to break free from is often described as its strategic encirclement by China which not only controls the Gwadar port but has also restored its presence in Colombo and Hambantota in Sri Lanka.

[edit] Why Chabahar port is important for India

PM Modi in Iran: Why Chabahar port is important for India, 22 May, 2016: The Times of India

1) Chabahar port will help India bypass Pakistan Chabahar is a port in south east Iran that will enable India to bypass Pakistan and open up a route to land-locked Afghanistan with which New Delhi has close security ties and economic interests.

2) The port will cut transport costs/time for Indian goods by a third.

3) Iran plans to turn the Chabahar port into a transit hub for immediate access to markets in the northern part of the Indian Ocean and in Central Asia.

4) India is one of a handful of countries that continued trade links with Iran despite it being isolated by Western countries against its disputed nuclear programme. New Delhi is Tehran's second-biggest oil client after Beijing.

5) Chabahar port, located in the Sistan-Baluchistan Province on Iran's southern coast, is of great strategic utility for India. It lies outside the Persian Gulf and is easily accessed from India's western coast.

6) It will set up India's road access to four cities in Afghanistan. From Chabahar, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 kms from the port. The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan's Garland Highway, setting up road access to four major cities in Afghanistan -- Herat, Kandahar, Kabul and Mazar-e-Sharif.

7) The port project will be the first overseas venture for an Indian state-owned port. India and Iran had in 2003 agreed to develop Chabahar on the Gulf of Oman outside the Strait of Hormuz, near Iran's border with Pakistan.

8) The project moved slowly because of western sanctions against Iran. The sanctions were lifted in January and since then, India has been pushing for conclusion of an agreement.

9) About a fifth of the oil consumed worldwide each day passes through the Strait, a shipping choke point that separates the Persian Gulf from the Gulf of Oman and Indian Ocean.

10) Indian investment in phase-1 will be in excess of $200 million, including $150 million line of credit from Exim Bank, an agreement for which would also be signed during the visit.

[edit] 2017

[edit] The story so far (till Dec 2017)

Amitabh Pashupati Revi, Edited by Shylaja Varma, December 4, 2017: NDTV

Iran's Chabahar Port, "Made By India" To Bypass Pakistan, Opened: 10 Points

The deal between India and Iran to develop Chabahar Port is seen as a plan to counter China's development of Gwadar port in Pakistan, barely 100 km from Iran's Chabahar.

1. The first phase of a strategic Iranian port -- which India is developing to open a trade route to Afghanistan and central Asia, bypassing Pakistan -- was inaugurated today. The Chabahar port is crucial as Pakistan does not allow India to send goods to Iran and Afghanistan through its territory by land. It is also expected to act as a counter to the Gwadar port in Pakistan, barely 100 km away, which is being developed by China. India has committed to the $500 million to the project. The port is expected to be operational by the end of 2018, Union Minister Nitin Gadkari had said.

2, The first phase of the Chabahar Port -- located in the southeastern province of Sistan-Balochistan in Iran -- aims to connect with Iran, Afghanistan and Central Asian countries. It can be easily accessed from India's western coast, bypassing Pakistan.

3. Under the trilateral transit and transport agreement during Prime Minister Narendra Modi's visit to Tehran in May 2016, the Chabahar port will the gateway to a Transit and Transport Corridor between India, Iran and Afghanistan and allow for multi-modal transport of goods and passengers.

4. New Delhi has already completed the Zaranj-Delaram road in Afghanistan that connects the Iranian border with all four major Afghan cities. India will also help build a $1.6 billion rail line to Zahedan in Iran, which will eventually connect with Mashad in north and provide access to Turkmenistan as well as northern Afghanistan through the Bafq-Mashad route.

5. Minister of State for Shipping Masukh Mandviya represented India at the inauguration, conducted by Iranian President Hassan Rouhani.

6. On Foreign Minister Sushma Swaraj made a stopover at Tehran on her way back from Russia and met her Iranian counterpart to discuss the project. "It also shows the importance of the port in the development of the region," Mr Zarif said.

7. In October, India had sent its first shipment of wheat to Afghanistan by sea through Chabahar.

8. The agreement between India and Iran was signed in May last year. India will develop and operate two berths in the first phase of the port.

9. Weeks before the inauguration, a top Afghan leader said his country would no longer need to depend on Pakistan for transit trade. "Afghanistan used to rely only on one transit road, which was through Karachi. That is not the case anymore. (Now) it's (also) through Chabahar," Afghan Chief Executive Abdullah Abdullah said.

10. Islamabad says India is trying to use Afghanistan as a base to destabilise Pakistan, and has long blocked India from conducting bilateral trade with Afghanistan using its territory as transit.

[edit] Inauguration of the port

Dec 3, 2017: The Times of India

HIGHLIGHTS

The first phase of the Chabahar port was inaugurated today, opening up a new strategic transit route between India, Iran and Afghansitan that will bypass Pakistan. Here's why the Chabahar port is crucial to regional trade and India's economic ties to its partners in this tripartite project:

1. The first phase of Chabahar port was inaugurated on Sunday, opening up a new strategic transit route among Iran, India and Afghanistan, bypassing Pakistan.

2. The port, located in Iran's southeastern Sistan-Baluchestan province, was inaugurated by Iranian President Hassan Rouhani in the presence of representatives from India, Afghanistan and several other countries of the region.

3. The first phase of the Chabahar port project is known as the Shahid Beheshti port.

4. Iran is believed to have asked the Indian government to "manage" or operate the first phase of the port, until work for the second phase is finalised.

5. The port is likely to ramp up trade among India, Afghanistan and Iran in the wake of Pakistan denying transit access to New Delhi for trade with the two countries.

6. Ahead of the inauguration, External Affairs Minister Sushma Swaraj and her Iranian counterpart Javed Zarif held a meeting in Tehran on Saturday to review the implementation of the Chabahar port project, among other issues.

7. The Iranian Foreign Ministry said Zarif had referred to the Shahid Beheshti Port and said it reinforces mutual and regional cooperation between India and Iran.

8. "It also shows the importance of the port in the development of the region and the routes that connect Central Asian states to other countries in the world through the Sea of Oman and the Indian Ocean," he said, according to the Iranian Foreign Ministry.

9. Over a month ago, India had sent its first consignment of wheat to Afghanistan by sea through the Chabahar port in Iran. "The shipment of wheat is a landmark moment as it will pave the way for operationalisation of the Chabahar port as an alternate, reliable and robust connectivity for Afghanistan," the ministry of external affairs (MEA) had said in a statement.

10. Besides the bilateral pact to develop the Chabahar port, for which India will invest $500 million, a trilateral Agreement on Transport and Transit Corridor has also been signed by India, Afghanistan and Iran.

[edit] 2019

[edit] Significance of Chabahar port

Iran looks to remote port to beat US sanctions, March 30, 2019: The Times of India

With the web of US sanctions tightening, Iran faces a host of challenges as it looks to an isolated port in the country's far southeast to maintain the flow of goods.

The port in Chabahar, only about 100 kilometres (62 miles) from the Pakistan border and located on the Indian Ocean, is Iran's largest outside the Gulf.

It is also the only Iranian port with exemptions from unilateral economic sanctions reimposed by the United States in 2018.

That is due mainly to the pivotal role of the port, and a planned railway line, in breaking landlocked Afghanistan's dependence on Pakistan for trade with the world, especially India.

Afghan trade as well as plans for a trading route by rail between central Asia and the Indian Ocean called the North-South Corridor are the main reasons the Islamic republic has invested one billion dollars in Chabahar's Shahid Beheshti port, official sources say.

"We will keep on developing this port... our rail network, road network and airport are all being developed, so that we can implement the North-South Corridor," Roads and Urban Development Minister Mohammad Eslami told AFP while visiting Chabahar for a development conference.

More than 200 hectares (almost 500 acres) of land have been reclaimed from the sea for the project and over 17.5 million cubic metres (618 million cubic feet) dredged, creating a 16.5-metre (54-foot) draught.

But more than a year since the new installations became operational in December 2017, business has yet to pick up.

The ships that officials say have docked in the past year have only loaded and unloaded 2.1 million tonnes of cargo, a far cry from the port's annual capacity of 8.5 million tonnes.

Only 20 ships have docked at the new section of the port and most of its three kilometres of waterfront remains unutilised, with new machinery and neatly lined-up cranes standing idle.

But authorities remain upbeat about the prospects for growth.

Hossein Shahdadi of the provincial ports and maritime authority said that in the first 11 months of the past Iranian year, which started on March 21, 2018, "there has been a 56 percent increase in cargo handled at the port compared with the previous year".

"We've also had a 25 percent rise in the number of ships calling at the port" on the Gulf of Oman, he said.

Arun Kumar Gupta, managing director of India Ports Global Limited which has a 10-year concession at the new port, played down the startup issues.

"Any port will have a gestation period, there will be lulls but we are very sure that traffic will pick up," Gupta told AFP.

The Indian company began work in December and has so far handled only an average of 60,000 tonnes of cargo per month.

But Gupta is counting on the port's proximity to India and Afghanistan to attract business.

Chabahar's location, however, carries its own risks as it lies in the volatile Sistan Baluchistan province where militant jihadists operate.

In December, a suicide attack on the local police headquarters killed two policemen.

During an investment conference in February, security was tight with many roads cut off and hundreds of armed security personnel deployed to protect delegates.

Apart from security concerns, US sanctions banning financial transactions with Iran make it ever harder to pay or receive payments.

Some like Afsaneh Rabiani, who runs a freight forwarding company, see Chabahar as an opportunity for "those willing to take the risk".

"I've been researching Chabahar for the past year and a half, and the infrastructure is now in place to do serious work here," she said.

As for the sanctions, Iran's roads minister said the challenge was nothing new.

"We were born with sanctions. Ever since the (1979 Islamic) revolution, we have been under sanctions and we are working on how to counter them," Eslami said, as he oversaw the unloading of a first shipment of Afghan goods lined up to be re-exported from Chabahar.

[edit] See also

Chabahar

Iran- India relations