1st phase of Chabahar port launched: 10 key points explaining its relevance

The first phase of Chabahar port was inaugurated on Sunday by Iranian President Hassan Rouhani.The Chabahar project, located on the Gulf of Oman, only 85km from China's Gwadar port in Pakistan, is important for India as it will allow it to bypass Pakistan in accessing Afghanistan and Central Asia. Business Standard is republishing this 31/10/2017 article which explains the significance of the port.

India sent its maiden cargo of wheat to Afghanistan through the Chabahar port in Iran, bypassing Pakistan on Sunday. The shipment will pave the way for operationalisation of the Chabahar port as an alternate route providing reliable and robust connectivity for central Asia.

The shipment was flagged off from the Kandla port in Gujarat with External Affairs Minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbani joining the ceremony through video conferencing.

10 things to know about Chabahar port in Iran:

— In February 2016, the Union Cabinet approved provision of credit of $150 million from EXIM Bank to the Islamic Republic of Iran for Chabahar Port Development

— It will help in expanding maritime commerce in the region and facilitate growing trade and investment with Iran and other countries in the region

— Would provide opportunities to Indian companies to penetrate and enhance their footprint in the region. Near Chabahar Port, China has already constructed Gwadar Port in  Balochistan province of Pakistan

— Memorandum of Understanding was signed between India and Iran on May 6, 2015, between Union Shipping Minister Nitin Gadkari and his Iranian counterpart

— India would execute and operate two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a ten-year lease

— The two berths will be operated by the India Ports Global Private Limited, a company promoted by the Jawaharlal Nehru Port Trust and Kandla Port Trust - two major ports working under the Ministry of Shipping

— Ownership of equipment to be transferred to Iranian side on completion of 10 year period or for an extended period, based on mutual agreement

— Proposal includes establishment of Transit and Transport Corridor between India, Iran and Afghanistan using Chabahar port as one of the regional hubs for sea transportation

— India has already built the Zaranj-Delaram Road in Afghanistan as a connection point for the cargo reaching Zehedan

— In September, Gadkari said that the Chabahar Port would be operational by December 2018 (Click here to know the details)

Some of the advantages of Chabahar port are:

* 30 per cent discount for all items of port dues and duties to container vessels

* Minimum of 30 per cent discount for all terminal handling charges (THC) compared with other southern ports of the country

* 75 per cent discount for storage of the imported containers and 87.5 per cent for storage of the exported containers

* 30 per cent discount for the costs of transfer

* No waiting time for the vessels compared with other ports of the country

* Distance to airport is 40 km