India signed a long-term agreement to operate the strategic Chabahar port with Iran as it seeks to expand trade in Central Asia.
Sarbananda Sonowal, India’s ports and shipping minister, signed the deal in Tehran on Monday. India also offered to provide a loan of $250 million to develop a terminal at the port, India’s embassy in Iran said in a post on social media platform X.
Sonowal said the agreement would be valid for 10 years and “not only strengthens links between two great nations but also places India’s firm footstep in the global supply chain and maritime sector.”
The Chabahar port serves as a gateway for Indian goods to reach markets in Afghanistan and Central Asia through the International North-South Transport Corridor, which is being developed with Iran and Russia and bypasses India’s rival and neighbor Pakistan.
The agreement struck on Monday replaces an initial 2016 pact, which covered India’s operations at Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.
India sent 20,000 tons of wheat aid to Afghanistan through the Chabahar port last year. In 2021, the port was used to supply environmentally friendly pesticide to Iran.
The new agreement would “clear the pathway for bigger investments to be made in the port,” India’s External Affairs Minister Subrahmanyam Jaishankar said earlier Monday at a conference in Mumbai. Without a long-term agreement, “it’s very difficult to invest in a port,” he said.
“We will see more connectivity linkages coming out of that port,” Jaishankar said.
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 had suffered several delays since then and was weighed down by sanctions on Iran.
