Chabahar Port Project
India and Iran have agreed to move forward quickly on the crucial Chabahar port project during foreign minister Sushma Swaraj’s ongoing trip to Iran.
Why India is interested in this port?
- India believes the port is critical to its interests and wants to develop it as a counter to Pakistan’s Gwadar port which was built with Chinese assistance.
- The port will allow India to bypass Pakistan to transport goods to Afghanistan and Central Asia using a sea-land route.
- Chabahar Port lies outside the Persian Gulf in Iran and will help India in expanding its maritime commerce in the region.
- It also provides opportunities to Indian companies to penetrate and enhance their footprint in the region.
Background:
An MoU was signed between India and Iran in May 2015. As per the MoU, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of USD 85.21 million and annual revenue expenditure of USD 22.95 million on a ten year lease.
- Ownership of equipment will be transferred to Iranian side on completion of 10 year period or for an extended period, based on mutual agreement.
- The Iranian side had requested for provision of a credit of USD 150 million in accordance with the MoU.
- As per the MoU, operation of two berths will commence within a period of maximum 18 months after the signing of the Contract.
- The two berths will be operated by the India Ports Global Private Limited, a Company promoted by the Jawaharlal Nehru Port Trust and Kandla Port Trust – two major ports working under the Ministry of Shipping.
