India hopes to start full operations soon at Iran’s Chabahar port


NEW DELHI-World News –

The Indian-backed Chabahar port complex on Iran’s coast along the Gulf of Oman is being developed as a transportation corridor for land-locked Afghanistan. Chabahar Port could escalate tensions between India & China. Chabahar, India’s new offshore port may change the strategic and economic geopolitics in South Asia vis-a-vis China and Pakistan.

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The ramifications of the Chabahar Port Project, its competition with Pakistan’s Gwadar and the fractures underneath the India-Iran friendship – are issues which some consider as a mere hype than truth to India’s rise as a regional giant. This outlook forms the key to this initiative.

In May 2016, India signed a deal with Iran to develop two terminals with five berths at the Shahid Beheshti area in Chabahar.

Under the agreement, India would build a 600-metre (1,969 feet) cargo terminal and a 640-metre container terminal. However, only a portion of the two berths have been finished because of deteriorating relations between the United States and Iran after the election of President Donald Trump in November 2016 that culminated with the reimpositon of economic sanctions last year.

In December, India took over operations at part of the Shahid Beheshti port, according to a statement from the Ministry of Shipping released on Monday.

On Tuesday, Nitin Gadkari, India’s Minister of Road Transport, met with Iran’s Foreign Minister Mohammad Javad Zarif in New Delhi. After the meeting he said the two sides were close to resolving various issues, including over banking payment mechanisms to overcome the U.S. sanctions.

India hopes to soon start full operations at a portion of Iran’s port of Chabahar.

“Regarding the machinery orders and others, already the financial arrangement is ready,” said Gadkari. “There are some problems but we have resolved the issue.”

‘India has already received a shipment of corn from Brazil at Shahid Beheshti with the help of Iranian operators,’ Gadkari told reporters.

India and Iran have robust economic and commercial ties covering many sectors though it has traditionally been dominated by the import of Iranian crude oil by India, which continued to engage with Iran at the time of sanctions. India, Iran’s top oil buyer after China, will pay for crude imports in rupees to UCO Bank. Iran will use the funds for importing goods from India.

Zarif said India’s UCO bank and Iran’s Bank Pasargad will start transactions despite the U.S. sanctions.

Mohammad Amir Davoud, deputy chief executive at Bank Pasargad said his bank will open its first Indian branch in Mumbai in three to four months to facilitate transactions.

Gadkari also said Iran had shown interest in buying rails from India and New Delhi had already placed a $85 million machinery order for the port. Iran had shown interest in buying rails and 250 to 300 locomotive engines from India, he said.

Indian firm Ircon is building a railway from Chabahar.

The new port could potentially open the way for millions of dollars in trade for Afghanistan and cut its dependence on Pakistan’s port of Gwadar, located 166 km to the east.