India signs long-term deal with Iran to operate Chabahar Port

India on Monday signed a long-term agreement with Iran to operate a terminal at the strategic Chabahar port.

The agreement, which hands over the operation of the port to state-owned India Ports Global Ltd (IPGL), was signed in a ceremony attended by India’s shipping minister Sarbananda Sonowal and Iran’s roads and urban development minister Mehrdad Bazrpash, Iranian state-owned news agency IRNA said.

Sonowal said the agreement is going to “clear the pathway for bigger investments to be made in the port.”

Without a long-term agreement, “it’s very difficult to invest in a port,” he added. 

The contract will likely be for 10 years and will give India management control over a part of the port, The Economic Times reported this week.

Earlier in November, shipping secretary T.K. Ramachandran had said that IPGL would soon sign an agreement with the Iranian Port Authority to start full-fledged operation of Chabahar Port.  

IPGL was formed to develop and run Chabahar port on Iran’s southeastern coast.

Through Chabahar, India aimed to bypass the port of Karachi and Gwadar in Pakistan to transport goods to Iran, Afghanistan and central Asian countries.

India’s first overseas port project, the development of Chabahar Port was touted as a prestigious project of national importance. 

While US sanctions on Iran slowed the port’s development, it was revived in the past two years. 

Sonowal had visited Chabahar in August 2022 to review the progress in the development of the port.

In January, external affairs minister S. Jaishankar had met Iran’s roads and urban development minister, Mehrdad Bazrpash, for a detailed and “productive” discussion on establishing a long-term cooperation framework on Chabahar Port.