India and Iran on Monday signed a 10-year long-term bilateral agreement to operate the Chabahar port, a crucial cog in India’s trade plans with Central Asia and parts of Europe, the Union Ministry of Ports, Shipping and Waterways announced.
According to the agreement signed between India Port Global Limited (IPGL) and Iran Ports and Maritime Organization (PMO), India will develop strategic ports for a period of 10 years.
“Located on the southwestern coast of Iran, Chabahar port has easy access to the western coast of India. It also forms a vital link in the International North-South Transport Corridor (INSTC). The long-term contract will significantly boost economic activities and affirm our growing role in the development of global trade and commerce,” Union Transport Minister Sarbananda Sonowal wrote on social media.
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While a formal 10-year agreement was signed in 2016, sanctions against Iran have hindered development in the area and India has operated the port through short-term agreements that have been periodically renewed.
The short-term deal and geopolitical nature of the country have kept investors and shippers reticent to invest there, citing the lack of a long-term deal with the government.
According to the Centre, India’s plans for the port go beyond commercial interests.
A 10-member delegation comprising officials from the Ministry of Ports, Shipping and Waterways and Ministry of External Affairs led by Sonowal arrived in Tehran on Monday to implement the agreement. The Center sought an exemption from the model code of conduct for the ongoing Lok Sabha elections to make the visit to Iran, which was approved by the Election Commission late last week, officials aware of the development said.
