India, Iran Sign 10-Year Deal for Shahid Beheshti Port Terminal

Tags: International News

On May 13, 2024, India and Iran sealed a decade-long deal to manage the Shahid Beheshti Port Terminal at Chabahar Port, Iran, promoting regional connectivity and trade relations.

An Overview of the News

• The agreement was inked between India Ports Global Limited (IPGL), a wholly-owned subsidiary of India Ports Global Chabahar Free Zone (IPGCFZ), and the Port and Maritime Organisation (PMO) of Iran.

• Notable figures present during the signing were Sarbananda Sonowal, Minister of Ports, Shipping, and Waterways of the Government of India (GoI), and Mehrdad Bazrpash, Minister of Roads and Urban Development of Iran.

• Under the terms, IPGL is set to invest around USD 120 million to upgrade the port facilities.

• Additionally, India has extended a credit line of USD 250 million for joint ventures aimed at bolstering infrastructure associated with Chabahar.

Background

• In May 2015, India and Iran inked an inter-Governmental memorandum of understanding (MoU) to facilitate the development of the Chabahar port.

• The contract for the port's development was finalized in May 2016, coinciding with the visit of Prime Minister Narendra Modi to Iran.

• Under a tripartite agreement known as the Chahbahar Agreement, signed in May 2016 among India, Iran, and Afghanistan, India undertook the development of the Shahid Beheshti terminal as part of its commitment to the project.

Chabahar Port

• Chabahar Port, situated in the Sistan-Baluchistan province of South Eastern Iran, comprises two major ports: Shahid Kalantari and Shahid Beheshti.

• The project is a joint initiative between India and Iran, designed to facilitate trade by serving as a crucial transit port for Afghanistan and landlocked Central Asian nations.

• India views Chabahar Port as strategically significant, offering a shorter and more accessible trade route that bypasses Pakistan, easing commerce with Central Asian countries.

• Chabahar Port is integral to the International North-South Transport Corridor (INSTC) project, a multi-modal transportation initiative spanning 7,200 kilometers. It aims to streamline freight movement between India, Iran, Afghanistan, Russia, Central Asia, and Europe.

About Iran:

• President: Ebrahim Raisi

• Capital: Tehran

• Currency: Iranian Rial