India to sign decade-long agreement to manage Iran’s Chabahar Port

India is set to sign a 10-year agreement with Iran to manage Chabahar Port, marking New Delhi’s first overseas port management venture. Shipping Minister Sarbananda Sonowal is scheduled to travel to Iran for the signing ceremony on Monday, according to Indian media.

Efforts are underway to integrate Chabahar Port with the International North South Transport Corridor (INSTC), enhancing India’s connectivity with Russia through Iran.

Utilizing Chabahar Port allows India to bypass Pakistan, establishing direct access to Afghanistan and extending into Central Asia. The port is strategically vital for India, linking it to Afghanistan, Central Asia, and the broader Eurasian region. This initiative also serves as a counterbalance to Pakistan’s Gwadar Port and China’s Belt and Road Initiative.

Discussions on developing Chabahar date back to 2003. In 2013, India committed to investing $100 million in the port’s development. The partnership was formalized in 2016 during Prime Minister Narendra Modi’s visit to Iran, with India agreeing to invest an additional $85 million in the Shahid Beheshti terminal.

Former Iranian President Hassan Rouhani discussed expanding India’s role in the port in 2018, a topic that has featured in subsequent high-level exchanges.

While the existing agreement, renewed annually, covers operations at the Shahid Beheshti terminal, the new 10-year contract will provide a more comprehensive framework for India’s involvement in Chabahar Port’s operations.

Landlocked Central Asian countries, such as Kazakhstan and Uzbekistan, also stand to benefit from using Chabahar as a gateway to the Indian Ocean Region and Indian markets.