Modi's Investment in Pezeshkian's Iran: The Strategic Importance of Chabahar Port

Iran's Chabahar Port is an important infrastructure project developed by India to connect landlocked Afghanistan with the Indian subcontinent and other Central Asian countries.

Iran's Ambassador to India, Iraj Elahi, has disclosed that India has committed $120 million to the Chabahar Port project, specifically for the Shahid Beheshti Terminal.

It serves as a crucial transit point for trade with Afghanistan and Central Asia, allowing goods to bypass Pakistan.

Additionally, he highlighted that India has set up a $250 million credit line to support infrastructure development in southeastern Iran.

India has decided to provide a $250 million credit line for infrastructure projects in southeastern Iran. Additionally, under the Chabahar port agreement, India will invest $120 million. Iran's Ambassador to India, Iraj Elahi, mentioned that interest from Indian investors in Iran is growing, according to an Indian news agency.

Earlier this year, India and Iran signed a 10-year agreement for India to operate the Chabahar Port.

According to the deal, India Port Global Limited (IPGL) will manage the cargo and container terminals at Chabahar Port for ten years.

Iran is a major supplier of crude oil to India. As Iran aims to boost its oil exports despite ongoing Western sanctions, India might benefit from a dependable and potentially more affordable source of crude oil.

New Delhi will closely monitor the Pezeshkian approach to regional security. His commitment to maintaining the "Axis of Resistance" against Israel and aligning with forces opposing what he refers to as "the Zionist regime" may continue to affect India's delicate diplomatic balance in the region.

Another area where India and Iran closely cooperate is the International North-South Transport Corridor (INSTC). This multi-modal transport route links India to Russia through Iran, enhancing trade connectivity and strengthening bilateral relations for regional stability.

Vajpayee's Strategic Port Agreement

In 2002, Hassan Rouhani, who then served as Iran’s National Security Advisor under President Syed Mohammad Khatami, met with Brajesh Mishra, his Indian counterpart. They discussed the development of a port situated 72 km west of Pakistan’s Gwadar port.

By January 2003, President Khatami and Indian Prime Minister Atal Bihari Vajpayee had agreed on a strategic cooperation plan. One major project in this agreement was the development of the Chabahar port. This port had the potential to connect South Asia with the Persian Gulf, Afghanistan, Central Asia, and Europe.

Masoud Pezeshkian, the newly elected President, is a follower of former reformist President Mohammad Khatami. Pezeshkian, who transitioned from being a surgeon to a politician, follows in Khatami's footsteps.

The New Delhi Declaration, signed by both leaders, highlighted the need for a strong economic relationship to support their growing strategic alignment.

For India, Chabahar was of great strategic and economic importance because it offered a way to reach Afghanistan, bypassing Pakistan, which had blocked land access.

Chabahar Port: Strategic and Humanitarian Hub

India has provided six mobile harbor cranes so far—two with a 140-tonne capacity and four with a 100-tonne capacity—along with other equipment valued at $25 million.

Since December 24, 2018, IPGL has managed Chabahar port through its subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ). The port has processed over 90,000 twenty-foot-equivalent units (TEUs) of container traffic and more than 8.4 million metric tonnes (MMT) of bulk and general cargo.

The port has also been instrumental in delivering humanitarian aid, particularly during the Covid-19 pandemic. So far, 2.5 million tonnes of wheat and 2,000 tonnes of pulses have been shipped from India to Afghanistan via Chabahar port. In 2021, India also sent 40,000 liters of the eco-friendly pesticide malathion through the port to Iran to combat locust infestations.

In August 2023, Prime Minister Modi met with President Ebrahim Raisi in Johannesburg during the BRICS Summit. They talked about the pending long-term contract for Chabahar port. Both leaders provided clear political guidance to finalize and sign the contract.

India-Iran 10-Year Port Deal

On Monday, May 13th, India and Iran signed a 10-year agreement to operate a terminal at the strategically important Chabahar port in Iran. This long-term deal aligns with India’s strategic and economic goals for Central Asia and beyond. However, the project has consistently encountered various challenges.

Union Minister for Shipping, Ports, and Waterways Sarbananda Sonowal attended the signing of the contract between India Ports Global Ltd (IPGL) and Iran's Ports & Maritime Organisation (PMO) in Tehran.

(The author of this article is a Defence, Aerospace & Political Analyst based in Bengaluru. He is also Director of ADD Engineering Components, India, Pvt. Ltd, a subsidiary of ADD Engineering GmbH, Germany. You can reach him at: girishlinganna@gmail.com)