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The long-drawn India-Iran deal on the Chabahar port could soon take shape through a memorandum of understanding (MoU) between the two nations. Union Shipping Minister Nitin Gadkari is set to visit Iran in the next few days, where he could formalise the deal by signing the inter-governmental MoU.
India is also likely to engage in discussion with the US to secure a waiver of sanctions on activities at Chabahar. Talks about the proposed speed and manner in which the US government plans to free up the sanctions might also be on the cards, so that India does not run the risk of attracting punitive sanctions.
Gadkari's visit comes after Commerce Secretary Rajeev Kher visited Iran earlier this month. Coming in the wake of the potential Iran-P5+1 deal, after which the current financial sanctions on Iran can be partially or completely lifted, the deal assumes strategic significance for the access it provides India to Afghanistan. The P5+1 group refers to the five permanent members of the United Nations Security Council, along with Germany.
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Once the deal is signed, the Indian government will invest $85 million for the purchase of equipment needed to set up and run a container terminal and a multi-purpose berth at the Chabahar port. Further, an annual expenditure of $22.95 million will be incurred by the government for operating the port. The Union government had in October 2014 approved formation of joint venture by the Kandla Port Trust and the Jawaharlal Nehru Port Trust for the development of Chabahar port.
Iran was India's second-largest supplier of crude oil up until 2006 but it dropped to number seven by the end of 2013-14. Although India has reduced its oil imports from Iran, it has continued to maintain good relations with the West Asian nation, which has been reeling under US and EU sanctions for over three years now.
Located on the confluence of the Indian Ocean and the Sea of Oman in southeastern Iran, Chabahar is India's first foreign port project. While the port is outside the Persian Gulf, it is strategically significant, providing access to Afghanistan, Central Asia and beyond. Originally floated in 2003 by the Atal Bihari Vajpayee-led government, the project has been consistently delayed due to various reasons.
Despite issues of viability, India wants to take up the Chabahar port as a strategic project, aimed at satisfying the immediate security interests of establishing a sea-land route into Afghanistan. New Delhi has plans to build a road-railroad network from Chabahar to Milak in Iran in order to link it with the India-built 223-km Zaranj-Delaram road in Afghanistan so that aid could be pushed to Kabul and beyond.
Chinese President Xi Jinping's two-day visit to Pakistan this week has further highlighted China's influence in infrastructure development growing in the neighbourhood. Pakistan's Gwadar Port - around 70 km east of Chabahar - was developed by the China Harbour Engineering Company Ltd (CHECL), with the Port of Singapore Authority being the minority partner. CHECL had displayed an interest in developing the Chabahar port as well.
