The Shahid Beheshti Terminal at Chabahar Port in Iran is India's first overseas port project
Last week, India signed an agreement to manage operations at the strategically located Iranian port of Chabahar. This marked an important step towards enhancing regional connectivity, particularly between India, Iran, and Afghanistan; central Asia and Russia; as well as Europe.
 
Union Minister of Shipping, Ports and Waterways Sarbananda Sonowal witnessed the signing of the agreement on May 13, 2024. He also handed over a letter from External Affairs Minister S Jaishankar, committing the INR equivalent of USD 250 million for Chabahar-related development. 
 
Here is why this development is so significant:
 
The Shahid Beheshti Terminal at Chabahar Port in Iran is India's first overseas port project. The strategically located Chabahar Port, in Iran’s Sistan-Baluchistan province, is the commercial transit centre for the region, especially Central Asia. It is an oceanic port located 550 nautical miles (NM) from Kandla in Gujarat and 786 NM from Mumbai.
 
The Chabahar Port lies close to some of the busiest trade routes in the world. The region comes under the Asia-Europe and Asia-Asia trade route, which carries large cargo volumes. The port’s deep draft of 16 metres is suitable for handling large shipment vessels bigger than 100,000 tons.
 
Chabahar Port is proposed to be integrated into the International North–South Transport Corridor (INSTC) - a multi-modal transportation route linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran and onward to northern Europe via St. Petersburg in Russia.
 
The INSTC envisages the movement of goods from Mumbai (India) to Shahid Beheshti Port – Chabahar (Iran) by sea, from Chabahar to Bandar-e-Anzali (an Iranian port on the Caspian Sea) by road, and then from Bandar-e- Anzali to Astrakhan (a Caspian port in the Russian Federation) by ship across the Caspian Sea, and after that from Astrakhan to other regions of the Russian Federation and further into Europe by Russian railways.
 
Chabahar Port is also expected to complement the India-Middle East-Europe Economic Corridor (IMEC). The US-led connectivity project was proposed at the G20 summit in New Delhi last year and will link India to Europe via the Gulf.
 
India is already using the Chabahar Port to supply humanitarian aid to Afghanistan. According to official data, since 2018, India has supplied 85,000 metric tons of wheat and 200 metric tons of pulses to Afghanistan in addition to 40,000 litres of pesticide Malathion to Iran through this port.
 
At the same time, Central Asian nations like Uzbekistan and Kazakhstan have expressed interest in using the port to gain access to the Indian Ocean region and the Indian market.
 
India & Chabahar Port: A Brief Timeline
 
India initiated discussions with Iran on the Chabahar Port in 2003, after Pakistan and China signed a deal to develop the deep-sea port at Gwadar. A major push was received in the second half of 2014, resulting in the signing of a Memorandum of Understanding (MoU) between the India and Iran for the development of Chabahar Port in May 2015. This MoU translated into a formal 10-year Contract for Equipping and Operating the Chabahar Port, which was executed during Prime Minister Shri Narendra Modi’s visit to Tehran in May 2016.
 
India agreed to make credit of USD 150 million available for development of phase 1 of the port in addition to equipping the terminals with equipment worth USD 85 million.
 
Since there were challenges in the activation of this contract, the foundation of an interim period contract was laid during the visit of Iranian President Hassan Rouhani to New Delhi in February 2018. This led to a formal Short-term Contract between the two sides being signed in May 2018.
 
Subsequently, the Government of India took over the operations of a part of Shahid Beheshti Port, Chabahar during the Chabahar Trilateral Agreement meeting held there in December 2018. The heads of Indian, Iranian and Afghanistan delegations jointly inaugurated the office of the Indian SPV - India Ports Global Chabahar Free Zone (IPGCFZ), at Chabahar. 
 
On May 13, 2024, India and Iran signed a Long-term Main Contract for the development of the Shahid Beheshti Port Terminal. The contract, under which India will construct and operate the strategic port for a period of 10 years, was signed between India Port Global Limited (IPGL) and Ports and Maritime Organization (PMO).