Iran: Transit trade through Chabahar Port

Officials from Iran, India, Afghanistan, and Uzbekistan met in Mumbai to explore strategies for enhancing commercial transactions and facilitating the transportation and transit of goods through Iran’s Chabahar Port.

Hossein Shahdadi, Deputy Director of Port and Economic Affairs of Chabahar, represented Iran at the meeting, which also included senior officials from India’s Ministry of Ports, Shipping, and Waterways, as well as ambassadors and diplomats from Uzbekistan, Afghanistan, and Iran.

Chabahar potential

The discussions centered on leveraging Chabahar’s strategic position as a vital trade and transit hub connecting Central Asia, South Asia, and the Middle East. Participants reviewed the port’s current infrastructure and operational capacity while addressing key obstacles to trade, including bureaucratic challenges, logistical inefficiencies, and infrastructure gaps.

As part of the agenda, the officials also proposed measures to streamline customs processes, enhance multimodal transport connectivity, and expand investment in Chabahar’s development to unlock its full potential as a regional trade gateway.

Chabahar regional role

Chabahar Port, located on Iran’s southeastern coast in the Gulf of Oman, is Iran’s only oceanic port and holds immense strategic significance. It provides a shorter and more secure trade route for landlocked countries such as Afghanistan and Uzbekistan, offering a viable alternative to traditional trade routes through Pakistan.

India, in particular, has invested heavily in Chabahar as part of its broader strategy to bypass Pakistan and enhance trade with Central Asia, Afghanistan, and beyond. The port is seen as a linchpin of India’s International North-South Transport Corridor (INSTC), a multimodal trade route linking India to Russia via Iran and Central Asia.

Chabahar Port and India

India has played a significant role in the development of Chabahar Port, committing substantial financial and technical resources to its construction and expansion. Under a trilateral agreement signed in 2016 between Iran, India, and Afghanistan, India has been granted operational control of a portion of the port. Since then, the country has contributed to improving the port’s infrastructure, including the construction of new terminals, installation of modern equipment, and dredging activities to enhance its cargo-handling capacity.

In recent years, India has shipped essential commodities such as wheat to Afghanistan through Chabahar and has positioned the port as a key enabler of humanitarian assistance and economic collaboration. The development of Chabahar aligns with India’s vision of regional connectivity and underscores its commitment to promoting economic stability in Afghanistan and Central Asia.

Future goals and challenges

The third joint working group meeting also highlighted the challenges faced in realizing Chabahar’s full potential. These include the need for sustained investment in rail and road connectivity, enhancing port efficiency, and addressing geopolitical issues, including US sanctions on Iran, which have hindered the pace of collaboration in some areas.

Despite these hurdles, all four nations reiterated their commitment to furthering cooperation on Chabahar and exploring innovative solutions to promote regional trade and economic integration. The port’s strategic location and growing role in fostering connectivity ensure it will remain central to the economic ambitions of the participating nations.

 

India to operate a terminal at Chabahar Port

Iran and India signed a long-term agreement on Monday based on which India Ports Global Limited (IPGL) will operate a terminal at the strategic Chabahar port as it seeks to expand trade in Central Asia.

The agreement was signed in a ceremony attended by Iranian Transport and Urban Development Minister Mehrdad Bazrpash and India’s Ports, Shipping, and Waterways Minister Sarbananda Sonowal in Tehran.

The signing of this agreement is considered a turning point in bilateral and regional commercial and economic cooperation, as well as facilitating strategic cooperation between Iran and India.

According to Sonowal, the agreement, which had been under discussion for some time, is going to clear the pathway for bigger investments to be made in the port., without a long-term agreement, it’s very difficult to invest in a port.

India expects the project will improve its connection with an international north-south transport corridor being developed with Iran and Russia and also improve trade links with Central Asia, Jaishankar said.

“We will see more connectivity linkages coming out of that port,” the Indian minister told local media earlier this week.

The Chabahar port serves as a gateway for Indian goods to reach markets in Afghanistan and Central Asia while bypassing India’s rival and neighbor Pakistan. India sent 20,000 tons of wheat aid to Afghanistan through the Chabahar port last year.

The cooperation between Iran and India on the strategic port dates back to 2003, when New Delhi agreed to develop the port as well as accompanying infrastructure links during the visit by then-President Muhammad Khatami to India. The project has suffered several delays since then and was weighed down by sanctions on Iran.

As Iran's only oceanic port on the Gulf of Oman, Chabahar Port holds great significance for the country both politically and economically. The country has taken serious measures to develop this port in order to improve the country’s maritime trade.

The port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Baluchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan Province, where the China-funded Gwadar port is situated.

Iran and India reach final agreement on Chabahar port development

Iran and India have reached the final agreement for the development of Iran’s southeastern Chabahar Port. The agreement to develop the strategic port was reached during a meeting between Iranian Transport and Urban Development Minister Mehrdad Bazrpash and Indian Minister of External Affairs Subrahmanyam Jaishankar.

In this meeting, the Iranian minister proposed the formation of a joint transportation committee to expand cooperation between the two sides and stated that the formation of this working committee will enable the activation of transit capacities and the use of the North-South corridor.

The Indian minister, for his part, emphasized his country's readiness for new investments in the fields of transportation and transit in Iran and invited the Iranian minister to visit India.

As Iran's only oceanic port on the Gulf of Oman, Chabahar Port holds great significance for the country both politically and economically. The country has taken serious measures for developing this port in order to improve the country’s maritime trade.

The port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Baluchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan Province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar port to give New Delhi access to Kabul and Central Asia.

Later, based on a separate deal with Iran, India agreed to install and operate modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

Under the framework of the mentioned agreement, the Indian side has been operating in Shahid Beheshti port in the form of a build–operate–transfer (BOT) contract; this is the first time that such a contract has been implemented in one of the country's ports with 100 percent foreign investment.

The first consignment of Indian equipment for the development of port activities at Chabahar port worth US$8.5 million arrived in the southeastern port in January 2021.

Back in last July, India’s ambassador to Tehran said Iran’s southeastern Chabahar Port is a golden opportunity for India to expand its economic ties.

“Chabahar's position in the expansion of trade exchanges in West Asia, Eurasia, and even Europe is unique,” the envoy said during a visit to the port.

 

Iran-India committed to strengthen relations

India and Iran have stated their unwavering commitment to fostering better ties in many areas of cooperation. Hossein Amir Abdollahian, Iranian Foreign Minister, stated that senior officials from both nations are committed to strengthening their relations at a meeting with Indian Foreign Secretary Shri Vinay Kwatra in Tehran.

Kwatra pointed out that the Indian government is adamant about deepening its ties with Iran and that it expects that via working together, the two nations’ economic ties would grow in a number of areas, such as traditional medicine, agriculture, and fishing.

The Indian diplomat expressed New Delhi’s commitment to sending humanitarian help to the Palestinian people while applauding Iran’s leadership position in West Asia.

Expressing satisfaction with the political consultations between the two countries, he said, “The Indian government, at the highest levels, is firmly determined to enhance relations with the Islamic Republic of Iran.”

Earlier, the Indian foreign secretary attended the 18th round of political consultations between Iran and India.

A broad range of political, economic, and consular matters, as well as regional and global trends, were covered during the four-hour meeting. The agenda for the future phase of the two nations’ relations was also discussed at the conference.

In a phone conversation in August, President Ebrahim Raisi of Iran and Indian Prime Minister Shri Narendra Modi discussed ways to enhance bilateral relations, mutual cooperation and the realization of the full potential of Chabahar Port.

Raisi stated that Iran and India should increase their cooperation in the areas of transportation and energy security.

The Iranian president emphasized the need for increased dialogue along the North-South Corridor.

“Iran seeks to strengthen regional convergence and develop economic relations with all countries across the globe, particularly those in Asia, in this regard,” Raisi noted.

The president remarked that historical similarities between Iran and India provide solid justification for the development of ties at all levels.

For his part, the Indian prime minister praised long-term collaboration with Iran. India, he asserted, was prepared to complete the necessary paperwork for the project’s completion.

The Indian prime minister was quoted by the ministry as saying that the relationship between Tehran and New Delhi is underpinned by close historical and civilization connections, including strong people-to-people contacts.

 

Cost of container shipping to Chabahar Port reduces significantly

The Director General of Sistan-Baluchestan Province Ports and Maritime Department has said that the establishment of direct shipping lines has significantly reduced the cost of container shipping to Chabahar port from various origins, Iranian Maritime News Agency (MANA) reported.

Referring to the establishment of direct container shipping lines from Chabahar Port in southeastern Iran to the ports of Nhava Sheva in India, and Taixing, Zhuhai and Qingdao in China, in collaboration with the Islamic Republic of Iran Shipping Lines (IRISL), the official noted that the prices of container shipping in the mentioned routes has been significantly reduced.

As Iran's only oceanic port on the Gulf of Oman, Chabahar Port holds great significance for the country both politically and economically. The country has taken serious measures to develop this port in order to improve the country’s maritime trade.

The port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Baluchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan Province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar port to give New Delhi access to Kabul and Central Asia.

Later, based on a separate deal with Iran, India agreed to install and operate modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

Under the framework of the mentioned agreement, the Indian side has been operating in Shahid Beheshti port in the form of a build–operate–transfer (BOT) contract; this is the first time that such a contract has been implemented in one of the country's ports with 100 percent foreign investment.

The first consignment of Indian equipment for the development of port activities at Chabahar port worth US$8.5 million arrived in the southeastern port in January 2021.

 

Iran launches another shipping line to India

The Islamic Republic of Iran Shipping Lines (IRISL) has launched a direct container shipping line from Shahid Beheshti Port in southeastern Chabahar to India’s Nhava Sheva Port.

The direct container line from Chabahar Port to Nhava Sheva, with a transit time of five days and a very competitive price, is unique in its kind and is expected to have a significant impact on the development of trade and strengthening the regional and extra-regional position of Chabahar Port.

IRISL had previously launched similar container shipping lines from Shahid Beheshti Port of Chabahar to the main ports of China with competitive prices and a transit time of 12 days, which increased the container activity of Chabahar Port by five times.

Iran and India had previously launched shipping lines between Chabahar and the Indian ports of Mumbai, and Mundra.

The first shipping route between the two countries was put into operation in 2017 between Iran’s Chabahar port and Mumbai.

In January 2019, Iran and India inaugurated the second direct shipping route which passes through Mumbai, Mundra, Kandla, Chabahar, and finally Bandar Abbas in southern Iran.

India is using the mentioned shipping routes to transit goods to Afghanistan and Persian Gulf nations as well as the countries in Central Asia.

Through Chabahar Port India can bypass Pakistan and transport goods to Afghanistan and Central Asia, while Afghanistan can get linked to India via sea.

Iran has awarded India the project for installing and operating modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

The strategic Chabahar Port in southeastern Iran is the only ocean port on the Makran coast and it has a special place in the country's economic affairs.

Back in September 2021, Indian Prime Minister Narendra Modi had called on Central Asian countries to benefit from Chabahar Port capacities for expanding their trade in the region.

 

Iran requires US$9 billion for developing Makran Coast Line

The Secretary of Makran Coast Development Council said developing the cost line requires three years of work and US$9 billion of investment, Fars News Agency reported.

Speaking to Fars, Hossein Dehghan said the need for developing the cost line came under the spotlight nearly 15 years ago when stressed by the Leader of the Islamic Revolution Seyyed Ali Khamenei.

“Over the past 15 years, important measures have been taken in this regard, however, it has not been enough,” Dehghan noted.

According to the official, distance from the center and lack of infrastructure have been the two main obstacles in the way of attracting investment in the mentioned region.

Makran is a historical region in Iran that runs from mountains west of Jask all the way to parts of Pakistan's Baluchistan province in the southwest along the Sea of Oman.

Iran has recently constructed significant nautical and commercial infrastructure in a number of Makran districts, particularly at Chabahar port, which serves as a vital trade route between the Indian Ocean and landlocked nations in Central Asia.

Earlier in June, the head of Iran’s Ports and Maritime Organization (PMO) announced a plan for attracting over US$390 million of domestic investment in the Makran Coast.

Ali-Akbar Safaei said that so far, the private sector has invested more than US$215 million in the region and the country’s small ports.

He also noted that good measures have been taken in the foreign investment sector, which will hopefully bear results soon.

Back in November 2022, President Ebrahim Raisi called for a quick development of the south and southeastern shores of Iran, namely the Makran coastline.

Raisi stated that plans for the development of the Makran coasts by the government and the private sector might assist the comparatively underdeveloped region.

Saudi Arabia: Port of NEOM opens for business

The Port of NEOM, described as the primary seaport of entry to the northwest of Saudi Arabia and which now incorporates Duba Port, is up and running.

Operations include a CMA CGM scheduled liner service, general cargo facilities, storage, and passenger services.

More than SAR7.5 billion (US$2.025 billion) has been committed to the new port’s development so far. It will provide a key entry point for goods and materials required for the development of the City of NEOM, Saudi Arabia’s vast new city of the future.

The ‘smart’ metropolis in Tabuk Province is just north of the Red Sea and will cover a total area of 26,500 sq km, more than 35 times the area of Singapore.

At the port, contracts for design, dredging, quay wall construction, and cargo handling equipment have recently been awarded. US-based port consultant, Jacobs, has been engaged to oversee design, with Moffatt and Nichol, IGO, and Trent as sub-consultants.

The redesign project costing SAR180 million (US$48.6 million) will cover terminals, warehousing, rail delivery, infrastructure, and a sustainable energy network.

Netherlands-based Boskalis and Belgium-France contractor, BESIX, are the first European contractors to be involved. They have been awarded a design-and-build lump sum contract worth more than SAR2 billion (US$540 million).

Several crane and container equipment contracts have also been awarded. Saudi Liebherr Company Ltd won contracts for ten mobile harbour cranes valued at more than SAR200 million (US$54 million). Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) landed contracts for ten ship-to-shore gantry cranes, 30 electric rubber-tyred gantry cranes, and six automated rail-mounted gantry cranes, together worth more than SAR one billion US$270 million). ZMPC will work with Siemens Europe to supply automation components.

The first container terminal is due to start operation by the beginning of 2025.

Sean Kelly, Managing Director of Port of NEOM, commented, “The Port of NEOM will be a critical enabler to the overall build, operations and economic ambitions of NEOM – from the import of goods and materials during the development phase and as a new global port serving the region. This is particularly important as development accelerates and businesses across NEOM come on stream.”

Courtesy: Seatrade Maritime News

Chabahar Free Zone special attraction for investors

In this century, transit and routes for transporting goods and passengers have become extremely important. One of the ways that countries can increase their economic and political power and consequently their national power at a lower cost is the optimal use of the strategic position.

The location of a country next to the open sea, oceans, important straits, etc. provide capacities, if properly planned and used, can help in creating economic prosperity and compensating for many of the country's deficiencies in other areas.

Iran's strategic position enables it to play a role as an important transit route in the transit of goods in the east-west and north-south routes.

This issue causes countries without access to open waters, including Afghanistan and Central Asian countries, to depend on Iran more than before.

The transit of goods from Iran through rail and road transport and then sea transport through the port of Chabahar plays an important role in attracting investment, developing industry, and creating employment, especially in the eastern regions of the country.

Lying on the coast of the Gulf of Oman in Iran’s southeastern Sistan-Baluchestan Province, Chabahar is the country’s only oceanic port and given its strategic location in the North-South Transport Corridor (NSTC) development of the port is of high significance for Iran, so the government has some major projects to create multi-dimensional transportation facilities in this port.

As announced by the managing director of Chabahar Free Zone Organization, US$8 billion of investment was made in different sectors in this zone during the past Iranian calendar year 1401 (ended on March 20).

Amir Moqadam said that the result of the actions taken in the field of investment attraction last year was that the total investments made reached from US$4.9 billion at the end of 1400 to US$8 billion at the end of 1401, and for 1402 it is targeted to reach US$14 billion.

Chabahar port has two significant docks, namely Shahid Beheshti and Shahid Kalantari, which are mostly referred to as ports, i.e. Shahid Beheshti Port and Shahid Kalantari Port.

Development of Shahid Beheshti Port, construction of Chabahar International Airport, and building Chabahar-Zahedan (center of Sistan-Baluchestan Province) railway are three of the major projects to make Chabahar a complete logistics platform.

In addition, Chabahar Free Zone has been suggested as a transit and logistic gateway for Iran's domestic market which, while reducing the cost and time of transportation it has also provided profitable economic opportunities in the development of logistics facilities.

Chabahar Free Zone is a multi-purpose zone with educational, industrial, tourism and transportation sectors.

Considering all the above-mentioned points, making investment in this zone is a necessity.

It is worth mentioning that one of the major potentials of Chabahar free zone, which makes investment in this area very profitable, is the existence of cheap workforce in all fields, especially in the field of industries.

This has caused this area to have a high potential for establishing factories and industrial units.

 

Iran: Container shipping line from Chabahar to Indian ports

Spokesman of Iran’s Valfajr Shipping Company says his company is operating a regular container shipping line from Chabahar port to various ports in India.

According to Abbas Kabousi, 15 voyages have been conducted along the mentioned line over the past three months, ISNA reported.

“The first vessel with a full capacity of 550 TEU arrived in Chabahar from Indian ports a few weeks ago and its cargo has been completely unloaded,” Kabousi said, adding that his company is ready to transport more goods between Indian ports and Chabahar port.

The official noted that his company has also been operating some direct lines from Persian Gulf Arab countries to Chabahar port.

“Valfajr Shipping Company has reduced the time of cargo transportation on the route from the southern ports of the Persian Gulf to Chabahar while reducing the freight rate and improving the schedules,” he said.

Kabousi further said the shipping company is ready to launch a direct line from Oman to Chabahar port.

Back in May 2022, Iran’s Ports and Maritime Organization (PMO) announced that three direct container shipping lines were launched from Chabahar Port to Nhava Sheva and Kandla ports in India as well as Jebel Ali Port in United Arab Emirate.

Iran and India had previously launched shipping lines between Chabahar and the Indian ports of Mumbai, and Mundra.

The first shipping route between the two countries was put into operation in 2017 between Iran’s Chabahar port and Mumbai.

In January 2019, Iran and India inaugurated the second direct shipping route which passes through Mumbai, Mundra, Kandla, Chabahar, and finally Bandar Abbas in southern Iran.

India is using the mentioned shipping routes to transit goods to Afghanistan and Persian Gulf nations as well as the countries in Central Asia.

Through Chabahar port India bypasses Pakistan and transport goods to Afghanistan and Central Asia, while Afghanistan can get linked to India via sea.

Iran has awarded India the project for installing and operating modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

The strategic Chabahar port in southeastern Iran is the only ocean port on the Makran coast and it has a special place in the country’s economic affairs.

Back in September 2021, Indian Prime Minister Narendra Modi had called on Central Asian countries to benefit from Chabahar Port capacities for expanding their trade in the region.

 

China launches direct shipping line to Chabahar Port

The first container ship departing from China docked at Iran’s key port of Chabahar on Saturday, marking the establishment of the first direct shipping line between China and Iran's southeastern seaport.

The announcement was made by Amir Moghadam, Managing Director of the Chabahar Free Zone Organization, Tasnim news agency reported.

According to Moghadam, Chinese ships previously unloaded in Bandar Abbas, the capital city of the southern province of Hormozgan, with their cargos then being transferred to Chabahar in Sistan-Baluchestan Province via smaller ships.

With the establishment of the direct shipping line between China and Chabahar, cargos are delivered ten days earlier, while the cost of loading and unloading is reduced by US$400 per container, the official explained.

In addition, the establishment of the mentioned shipping line plays a great role in the development of transit via Chabahar Port, he added.

As Iran's only oceanic port on the Gulf of Oman, Chabahar port holds great significance for the country both politically and economically. The country has taken serious measures for developing this port in order to improve the country’s maritime trade.

In this regard, Iran has been welcoming investors from all over the world to take part in the development of this port and benefit from its distinguished position as a trade hub in the region.

Chabahar port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities.

The port is located in Iran’s Sistan-Baluchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia.

Based on an agreement with Iran, India is going to install and operate modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

While Iran is combating the US unilateral sanctions on its economy, the country’s ports as the major gates of exports and imports play a significant role in this battle. This role makes all-out support to ports and more development of them serious and vital.

Such necessity has led the government to define projects for more development of the ports and also take some measures to encourage investment making in ports, in addition to facilitating the loading and unloading of goods, especially basic commodities, there.

 

Iranian port Chabahar handles nearly 2 million tons goods in a year

As announced by a provincial official, nearly 2 million tons of basic commodities were transported from Chabahar port, in the southeast of Iran, to the designated destinations throughout the country in the past Iranian calendar year 1400 ended in March 2022.

Mehrollah Damough, the head of goods transportation office of Road Maintenance and Transportation Department of Sistan-Baluchestan province, where the strategic port lies, said that the mentioned commodities were transported by almost 80,000 trucks.

Chabahar is an important port and a low-cost route for Central Asian countries, which with its strategic unloading and loading equipment has the potential to become a key transit corridor for international transit and transportation, the official further underlined.

As announced by the Deputy Head of Islamic Republic of Iran Customs Administration (IRICA), 30.9 million tons of basic goods worth US$19.6 billion were cleared from the customs in the past Iranian calendar year.

Foroud Asgari, Deputy Head of IRICA for customs affairs, said that the imported goods comprises of 25 commodity groups.

Putting the value of the imported basic commodities at US$19.6 billion in the past year, the official said that the imports showed a 60% increase in terms of value and 32% growth in terms of weight, as compared to the Iranian calendar year 1399.

As Iran's only oceanic port on the Gulf of Oman, Chabahar port holds great significance for the country both politically and economically. The country has taken serious measures for developing this port in order to improve the country’s maritime trade.

In this regard, the Islamic Republic has been welcoming investors from all over the world to take part in the development of this port and benefit from its distinguished position as a trade hub in the region.

Chabahar port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Balouchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan had signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia.

Based on an agreement with Iran, India is going to install and operate modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

Iran and India establish shipping links

Deputy Head of Iran's Ports and Maritime Organization (PMO) Jalil Eslami has said direct container shipping lines have been established between Iran’s southeastern port of Chabahar and two Western Indian ports of Nhava Sheva and Kandla.

According to Eslami, regular container service with a traffic schedule of 10 to 15 days is performed by the Islamic Republic of Iran Shipping Lines (IRISL) through these lines.

The official noted that PMO is going to offer the necessary tariff incentives and facilities on tolls and transportation costs to support the traders that use the lines.

He pointed out that according to the schedule, the first container service through the mentioned route will enter Iran’s Shahid Beheshti port on February 16, 2022.

Iran and India had previously launched shipping lines between Chabahar and the Indian ports of Mumbai, and Mundra.

The first shipping route between the two countries was put into operation in 2017 between Iran’s Chabahar port and Mumbai.

In January 2019, Iran and India inaugurated the second direct shipping route which passes through Mumbai, Mundra, Kandla, Chabahar, and finally Bandar Abbas in southern Iran.

India is using the mentioned shipping routes to transit goods to Afghanistan and Persian Gulf nations as well as the countries in Central Asia.

Through Chabahar port India aims at bypassing Pakistan and transport goods to Afghanistan and Central Asia, while Afghanistan can get linked to India via sea.

Iran has awarded India the project for installing and operating modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

The strategic Chabahar port in southeastern Iran is the only ocean port on the Makran coast and it has a special place in the country's economic affairs.

Back in September 2021, Indian Prime Minister Narendra Modi had called on Central Asian countries to benefit from Chabahar Port capacities for expanding their trade in the region.

Can India-Iran alliance bring peace in Afghanistan?

Santosh Mehrotra, an Indian professor said, India and Iran ‑ two emerging Asian powers ‑ can play a key role in establishing peace in Afghanistan, he was talking to The Tehran Times. 

Mehrotra said, “This regional role might emerge if there was a strong role of Iran and India in a transition to peace and progressive development in Afghanistan. However, the Taliban's whole effort would be to prevent that, so that they can keep the support of Pakistan.”

“Both Iran and India can be forces for good in Afghanistan, where peace and development will benefit all the people of Afghanistan.” the visiting professor in the Center for Economic Development at the University of Bath noted.

Talking about India’s economic rise amid the China-US row in Asia,  Mehrotra said, “This balancing act for India would have been easier if China's rise as an economic and military power was accompanied by less, not more, aggressiveness in international affairs. But China's behavior has become more aggressive in many dimensions in Asia and the world. India was left with little choice to joining with the Quad (United States, Japan, Australia and India). China's entering Ladakh territory in 2020 totally disturbed the border equilibrium between India and China prevailing for decades. 

“India and Iran have historically enjoyed very close and warm relations. This has been evident in the long-standing economic relations, especially, India's long agreements to import Iran oil. The US sanctions against Iran have queered this pitch, unfortunately. Nevertheless, India still pressed ahead with the agreement on the Chabahar port development project. With the 2020 election result in the US, the likelihood of US sanctions on Iran continuing may diminish. This will again enable a further deepening of the Indo-Iran ties, which have centuries-old and deep historical roots,” Mehrotra added
 
As regards, Asian emerging powers like Iran, Turkey and India forming a coalition, Mehrotra said, “Asian emerging powers can have a regional role. This regional role might emerge if there was a strong role of Iran and India in a transition to peace and progressive development in Afghanistan. However, the Taliban's whole effort would be to prevent that, so that they can keep the support of Pakistan. Both Iran and India can be forces for good in Afghanistan, where peace and development will benefit all the people of Afghanistan.”
  

Who will control Chabahar? India or China

Early this month, I had posted a blog “India to begin full-scale operations at Iranian port Chabahar in May 2021”. I had stated, “Indian US$500 million investment represents a clear and potent commercial challenge to China’s massive port investment in Gwadar port located in Pakistan, a key component of Beijing’s Belt and Road Initiative (BRI).” 

Today, I am posting excerpts from an interview of Behrouz Aghaei, Director General, Ports and Maritime Department, Sistan-Baluchestan province of Iran.

Following are the key takeaways:

Iran calls Chabahar port the “Gate of Nations” and that is an indication of its view about this port’s future. Chabahar is going to be one of the top trade hubs in the region, linking the West Asian nations to CIS countries.

Not only China, but any other country that is willing to invest in Chabahar is welcomed by Iran provided that the economic independence of the port and the interests of the Islamic Republic are ensured.

Being Iran's only oceanic port on the Gulf of Oman, Chabahar holds great significance for the country both politically and economically. Iran has taken serious measures for developing this port in order to improve its maritime trade.

The first and most important issue that the Ports and Maritime Organization (PMO) has taken into account when considering investment offers by foreign trade partners, is the port’s economic independence.

India currently works with Iran as an operator in this port and the country does not have an exclusive right over any part of this port.

Iran welcomes other countries to come and participate in the development of this port beside India.

Iran has been welcoming investors from all over the world to take part in the development of this port and benefit from its distinguished position as a trade hub in the region.

The recent agreement between Iran and China has increased the chances of this giant economy participating in the development of this port and to further contribute to the improvement of its global status.

China’s contribution to the development of Chabahar port would be a great opportunity for this port to further establish itself as a trade hub in the region since China is currently one of the world’s most advanced countries in terms of maritime and port industries.

Three of the world’s top shipping companies and operators are Chinese companies, for instance, COSCO is currently the world’s fourth-biggest shipping line which is operating at 45 ports worldwide.

China's entrance into Chabahar port could lead to significant growth in this port because shipping lines and operators play a key role in the development of a port.

The activity of Chinese shipping lines in Chabahar port could increase the port’s trade exchanges with the world to a very significant level.

China is currently having maritime trade exchanges with over 162 countries worldwide and the activity of Chinese renowned shipping lines in Chabahar port would mean linking of the port to more than 45 ports and over 162 countries.

China plays a key role in the development of container ports around the world. Six of the world’s top 10 container ports are in China which means about 60% of the world’s container operations are taking place in this Asian country.

Research shows that the Chinese ports are going to register the world’s largest growth in terms of container trade by 2024.

India to begin full scale operations at Iranian port Chabahar in May 2021

India is getting ready to begin full-scale operations of its first foreign sea port venture Chabahar in Iran by May end this year. This facility located on the Gulf of Oman aims at facilitating South Asia, Central Asia and West Asia trade.

Indian US$500 million investment represents a clear and potent commercial challenge to China’s massive port investment in Gwadar port located in Pakistan, a key component of Beijing’s Belt and Road Initiative (BRI).

According to a report by Asia Times, India has nearly completed development of two terminals at Chahabar’s Shahid Beheshti complex that opens onto the Gulf of Oman.

The 10-year lease agreement, a deal first clinched by Prime Minister Narendra Modi in Tehran in 2016, has until now been hobbled by US sanctions imposed under the Donald Trump administration.  

Indian suppliers and engineers, some with interests in the US, were reluctant to deliver essential machinery and services to Iran on fears they could face sanctions, despite clear exemptions on Chabahar in Trump’s sanction order. That led to certain speculation that China may take over the project from India.

Now, New Delhi has accelerated the project with the shift from Trump to Joe Biden, banking like others on a new breakthrough on the Joint Comprehensive Plan of Action (JCPOA) and a broader US-Iran warming trend.

“I will inaugurate the fully operationalized Chabahar port in April or May,” Mansukh Mandaviya, Indian Ports & Shipping Minister, said in a recent virtual discussion on Iran’s Chabahar port.

India has supplied two large cargo-moving cranes and will deliver two more in the coming weeks before the facility’s expected ceremonial opening next month.

New Delhi is already promoting the port’s potential humanitarian role, noting it was used to send emergency shipments of wheat to Afghanistan during the COVID-19 crisis and pesticide to Iran to deal with a recent locust infestation.

Chabahar has seen limited operations since 2019 due to the US restrictions imposed on Iran’s energy exports. The port handled a mere 123 vessels with 1.8 million tons of bulk and general cargo from February 2019 to January 2021, well below its operating capacity, according to reports.

New Delhi ultimately aims to link Chabahar to its International North-South Transport Corridor (INSTC), a project initially proposed by India, Russia, and Iran in 2000 and later joined by 10 other Central Asian nations.

Some see the INSTC as a less talked about rival to China’s BRI, which has invested heavily in Pakistan’s road, power and trade infrastructure, including huge multi-billion-dollar investments at Gwadar port.

INSTC envisions a 7,200 kilometer-long, multimode network comprised of shipping, rail, and road links connecting India’s Mumbai with Europe via Moscow and Central Asia. Initial estimates suggest INSTC could cut current carriage costs by about 30% and travel times by half.

Iran has already started working on a 600-kilometer-long railway line connecting Chabahar port to Zahedan, the provincial capital of Sistan-Baluchestan province close to the Afghan border.

Chabahar port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities. The port is located in Iran’s Sistan-Balouchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia.

The original plan committed at least US$21 billion for Chabahar–Hajigak corridor, which included US$85 million for Chabahar port development, a US$150 million credit line for Iran, an US$8 billion India-Iran MOU for Indian industrial investment in a Chabahar special economic zone, and US$11 billion for the Hajigak iron and steel mining project awarded to seven Indian companies in central Afghanistan.

Hajigak is the best known and largest iron oxide deposit in Afghanistan. It is located near the Hajigak Pass, with its area divided between Maidan Wardak and Bamyan provinces.

Unlike Chabahar, which is designed more to serve the economic and trade interests of the wider region, Gwadar is more tilted toward Beijing’s ambitions, analysts and traders say.

Riaz Haq, founder and president of PakAlumni Worldwide wrote in a recent blog that “China is looking to build and use Gwadar in Pakistan as Hong Kong West to serve as a superhighway for China’s trade expansion in [the] Middle East (West Asia), Africa and Europe.”

Gwadar port’s planned capacity will accommodate a massive 300 to 400 million tons of cargo annually, comparable to the combined annual capacity of all Indian ports. It also dwarfs the 10-12 million tons of cargo handling capacity now planned for Chabahar.

In another comparison, the largest US port at Long Beach, California, handles 80 million tons of cargo, about a quarter of what Gwadar could handle upon completion of a project that is designed largely to receive and move China’s trade.

Iran, India and Uzbekistan meeting on Chabahar Port

Iran, India, and Uzbekistan are scheduled to hold their first online meeting on cooperation in Iran's Chabahar Port on Monday, 14th December 2020, the Indian Ministry of Foreign Affairs announced.

The trilateral working group meeting will be jointly chaired by Deputy Ministers of Iran and Uzbekistan and a secretary from India, Hindustan Times reported.

The announcement came a day after Uzbek President Shavkat Mirziyoyev proposed during a summit with Prime Minister Narendra Modi that a trilateral meeting should be held with Iran to promote Chabahar port.

According to the website of the Indian Ministry of Foreign Affairs, the Indian Government welcomes Uzbekistan's interest in using Chabahar port, in Southeastern Iran, as a transit port, which provides economic opportunities for traders in the region.

In addition to Uzbekistan, other Central Asian countries have shown interest in using the port.

“This would open up economic opportunities for the traders and business community of the region. Besides Uzbekistan, other Central Asian countries have also shown interest in using the port. India seeks to cooperate closely with regional countries on this issue,” the statement by the Indian ministry said.

India currently operates one of the terminals of Chabahar port and offers loading and unloading services in the mentioned terminal.

“The strategic project has been given a waiver from sanctions imposed by the United States on Iran in view of its importance in shipping cargo and humanitarian assistance to Afghanistan," the report highlighted.

Following an India-Uzbekistan Summit on Friday, Adarsh Swaika, Joint Secretary (Eurasia), Indian External Affairs Ministry, said the two sides had discussed the ways to overcome the lack of overland connectivity.

Mirziyoyev gave his in-principle concurrence to joining the International North-South Transport Corridor (INSTC) when Modi reiterated a proposal on Uzbekistan’s participation in the project.

“We would welcome any initiative that increases connectivity between Afghanistan and Uzbekistan or with other Central Asian countries,” Swaika said.

Chabahar Port, the only Iranian ocean port, is a strategic port with unique opportunities that can attract investments from Iranian and foreign private sectors.

The development of the Chabahar Port is important for the economic development of regional countries and in this regard endorsing regional agreements with neighboring countries are of significant importance for Iran so that it can increase its transit share to connect the shores of the Indian Ocean to Russia, northern Central Asia, and the Caucasus.

India expresses interest in investing US$20 billion in Iran

According to an IRNA report, India has shown interest in investing up to US$20 billion in Iran. This was expressed by Indian Petroleum and Natural Gas Minister Dharmendra Pradhan.

He made these remarks during Iran-India Business Round Table which was held in New Delhi. He expressed India was willing to invest in Iran’s southeastern port of Chabahar. He said his country would make such an investment ‘if conditions become conducive’.
 Iranian Foreign Minister Mohammad Javad Zarif, senior managers from Iranian and Indian chambers of commerce, banks, and other sectors including industry, trade, and science attended the business forum.

Pradhan also said that the two countries can increase bilateral oil and gas trade. He, in addition, showed his country’s willingness to participate in the development of Iranian Farzad-B gas field in the Persian Gulf.

During the meeting, the chairman of Iran Chamber of Commerce, Industries, Mines and Agriculture, Gholam-Hossein Shafei, said the current level of bilateral trade is not proportional to potentialities, saying that the value of trade can reach US$30 billion in the future.

Shafei underlined that possessing huge energy resources, the Islamic Republic can act as a reliable source to meet India’s need for energy.

He also mentioned transportation sector as one of the possible fields of cooperation between the two countries, adding that the recently signed trilateral agreement between Iran, Afghanistan, and India to develop the Iranian port of Chabahar can change Iran into the region’s transportation hub.

Highlighting the significance of Chabahar port in the expansion of Iran-India relations, the Iranian foreign minister noted that the port can be beneficial not only to Iran but also to all other regional countries.
Referring to the importance of banking relations as the backbone of economic ties between the two countries, Zarif expressed hope that relations would continue developing in the future.

On the first leg of his three-nation tour of Asia, Zarif arrived in New Delhi to take part in the Heart of Asia Conference on the situation in Afghanistan and also to hold talks with high-ranking Indian officials.

Iranian foreign minister is accompanied by a 70-member high ranking politico economic delegation who will take part in trade and business meetings with India, China, and Japan.