India to upgrade Iran's Chabahar Port with $100 million

[Maulik]

Tehran: In a strategically significant move to counter China's presence in the region, India has announced that it will upgrade Iran's crucial Chabahar port that gives a transit route to land-locked Afghanistan.

India's decision was conveyed by Foreign Minister Salman Khurshid in Tehran today during his meeting with his counterpart.

An expert team from India will visit Iran to assess investment needed for the upgradation of the port on the Iran-Pakistan border facing the Arabia Sea. Sources say an investment to the tune of $100 million is required for the upgradation.
The move comes despite strong pressure from America, which doesn't want any investment in developing infrastructure in Iran to put pressure on the Western Asian country over its covert nuclear programme. But India has been worried and keen to open alternative route to Afghanistan ever since China took over Pakistan's Gwadar port in the region, which is just 76 km from the Chabahar port.

Chahbahar port, which is surrounded by a free trade zone, is crucial particularly since Pakistan does not allow transit facility from India to Afghanistan.

India will also discuss ways to increase trade with Iran as it is concerned over the "grave" imbalance. The two-way trade is around US $15 billion, out of which Indian exports account only for around US $2.5 billion.

Oil is the biggest item of Indian import from Iran but India feels there is a lot of scope for increasing Indian exports to the Persian country particularly in pharmaceuticals and food.

However, efforts to enhance trade have been facing hurdles because of sanctions imposed by the UN and European Union, which make payment difficult.

There are also problems like re-insurance of oil refineries and transportation of consignment from Iran because of the sanctions.

In a $100 million move to counter China, India to upgrade Iran's Chabahar port | NDTV.com

[Maulik]

India, Iran talk Chabahar port funding - Hindustan Times


After almost a decade of dilly-dallying, India on Friday conveyed to Iran its intent to invest in the development of the strategically-important Chabahar port in Iran.

This investment is seen as a way to counter the Chinese-managed Gwadar port in southwesternPakistan. The two sides have also pushed for transit pact between India, Iran and Afghanistan, which would help India get access to the land-locked and resource-rich countries.
"We are going ahead with the Chabahar project. Cabinet has already cleared it", external affairs minister Salman Khurshid, who held a series of meeting with Iranian leadership said here.
Following up on the decision, a high-level delegation headed by union shipping secretary will be visiting Tehran to fine-tune the plans. India initially plans to invest $100 million.
"The two sides discussed bilateral and regional issues of mutual interest. They discussed Indian participation in Chabahar Port project which will provide connectivity with Afghanistan and will give an impetus to Afghanistan's economic development," the joint statement, issued after the meeting, said.
A host of problems, including the West's antagonism toward Iran, chill in India-Iran ties after New Delhi voted against Tehran at the International Atomic Energy Agency, had come in the way of the project for many years.
Chabahar is an important Iranian port along the Makaran coast and offers Iran easy access to the Indian Ocean and it is closer to India than the existing Bandar Abbas port. India, Iran and Afghanistan have already signed an agreement to give Indian goods, heading for Central Asia and Afghanistan, preferential treatment and tariff reductions at Chabahar.
According to technical studies, the next phase includes construction of a multi-purpose cargo berth and two container terminals. Chabahar gained strategic importance during Iran-Iraq war in the 1980s.
Gwadar has strategic and economic importance for China as around 60% of its crude oil comes from the Gulf countries that are close to Gwadar.