Iran and India have solidified their economic ties with a 10-year agreement concerning the operation and equipment of Chabahar, a port city in southern Iran. The deal, inked in Tehran, involved Iran’s Minister of Roads and Urban Development, Mehrdad Bazrpash, and India’s Minister of Ports, Shipping, and Waterways, Sarbananda Sonowal.

The collaboration entails India Ports Global Ltd (IPGL) partnering in the operation and equipping of the freight and container terminals at Shahid Beheshti Port in Chabahar. As per the terms, Iran’s Ports and Maritime Organization (PMO) will lease sections of these terminals to India for a decade. India will invest $120 million in strategic equipment supply and $250 million in Chabahar’s transport infrastructure.

Both nations are committed to enhancing transit along the International North-South Transport Corridor (INSTC), fostering shipping lines between their ports, and attracting container transit freights. Bazrpash emphasized Chabahar’s potential as a regional transit hub, expressing confidence in India’s role.

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Sonowal hailed the agreement as a testament to the enduring partnership between the two countries, highlighting Chabahar’s significance in facilitating trade between India, Afghanistan, and Central Asian countries. He emphasized its role in bolstering regional trade and supply chain resilience.

The agreement marks a significant milestone, especially considering the challenges posed by previous US sanctions. India sees Chabahar’s development as pivotal in enhancing trade access to Afghanistan and Central Asia, thereby diversifying its transportation networks.

Moreover, India views Chabahar as a strategic counterbalance to China’s investments in Pakistan’s Gwadar region, underlining its broader geopolitical implications.