India set to take over operations of Chabahar Port

India is set to take over the operations of Chabahar Port in Iran, as Prime Minister Narendra Modi and the West Asian nation's president Hassan Rouhani witnessed signing of the lease contract in New Delhi on Saturday.

The Port and Maritime Organization of Iran leased out to India Ports Global Limited a part of the Phase 1 of the Chabahar Port (a.k.a. Shahid Behesti Port) of the Islamic Republic for 18 months. The contract was signed by Shipping Minister Nitin Gadkari and Iranian Transport Minister Abbas Akhundi after the leaders of the two nations met in New Delhi.

Modi and Rouhani witnessed exchange of seven other pacts after they met at Hyderabad House in New Delhi. They also witnessed exchange of instrument of ratification of the bilateral Extradition Treaty, which brought the bilateral pact signed in 2008 into force. The trade bodies of the two nations also signed four more Memorandums of Understanding during Iranian President's visit to New Delhi.

The Chabahar Port will give India a sea-land access to Afghanistan and Central Asia, bypassing Pakistan, which has been playing spoilsport to initiatives for connectivity between South Asia and Central Asia.

The port's strategic importance for India grew further after Pakistan handed over the control of its Gwadar Port to China.

Modi said that Chabahar Port offered "a golden gateway" for landlocked Afghanistan. He offered Rouhani New Delhi's support to build a rail link from Chabahar to Zahedan on Iran-Afghanistan border to realize the full potential of the port.

"The transit ties between the two countries will create multilateral and regional capacities in cooperation with the regional states. We are ready for trilateral and multilateral contracts so that this transit route through Chabahar Port turns into a strategic route to consolidate regional ties," said Rouhani, as he and Modi jointly addressed media-persons after the meeting.

India in May 2016 inked a deal with Iran for development of the Chabahar Port. The deal was signed during the Prime Minister's visit to Tehran set the stage for India investing $85.21 million for development and operation of two terminals and five berths of the port in Iran, with cargo handling capacities for 10 years.

New Delhi, Kabul and Tehran also inked a trilateral transport and transit deal, which was implemented in November 2017 with a consignment of wheat being transported from India to Afghanistan through Chabahar Port of Iran. Rouhani inaugurated the first phase of the Chabahar Port in December 2017.

The meeting between the two leaders could not immediately end the uncertainty over the proposed contract for a consortium of ONGC Videsh, Indian Oil Corporation, and Oil India to develop the Farzad B gas field in Iran, although they agreed to speed up the negotiation. They also agreed to move beyond traditional buyer-seller relationship in energy sector and develop it into a long term strategic partnership.

Modi and Rouhani agreed to to examine feasible options, including Rupee-Rial Arrangement, Asian Clearing Union mechanism to establish functional payment channels.

According to a joint statement issued after Modi-Rouhani meeting, Iran welcomed the investment from India in setting up plants in sectors, like fertilizers, petrochemicals and metallurgy in Chabahar Free Trade Zone on mutually beneficial terms. The two leaders also reiterated their commitment to the International North-South Transport Corridor (INSTC) project – a proposed ship-rail-road corridor linking India, Iran, Russia, Central Asia and Europe.