India, Iran sign contract for Chabahar port operation

In the second week of May, India inked a deal with Iran to operate Chabahar Port. The deep water port located on the Gulf of Oman, is strategically important, and the deal is immensely significant and telling of India’s revision of its foreign policy. 

Following formal diplomatic recognition in 1950, Tehran and New Delhi saw amicable ties till 1979, when relations soured due to the Iranian Revolution. Furthermore, Iran’s backing of Pakistan in the Indo-Pakistan War and India’s backing of Iraq in the Iran-Iraq War saw bilateral relations plummet. Since then, common strategic interests have brought the two countries back to a friendly diplomatic standing. 

The early 2000s saw a number of cooperative initiatives between the two countries, with the Indian side highlighting Chabahar’s strategic significance, being the most convenient route to reach land-locked Afghanistan and Central Asia. However, multiple projects were undone by the imposition of sanctions on Iran by the US, after discovery of its illicit nuclear programme.

Nevertheless, in 2015, India committed to make its vision a reality. The Trilateral Agreement between Iran, Afghanistan and India only strengthened coordinated effort to develop Chabahar Port. With work on an Indian-funded highway connecting Afghanistan and Chabahar already underway, India’s Shipping Ministry set out to refurbish the port. India has been operating the port since 2018.

The contract, in which late President Ebrahim Raisi (who died in a helicopter crash) played an instrumental role, sees Indian Ports Global Limited investing $120 million to equip and operate the port for another 10 years. India’s optimised connectivity with Central Asia is expected to increase its trade with multiple countries in the region. 

This contract is merely a part of India’s larger vision of looking towards the Middle-East. There is no doubt that the India Middle-East Economic Corridor, trade agreements and visits to the United Arab Emirates and a recent impromptu visit to Qatar only reinforce New Delhi’s concerted effort to strengthen ties and counter the rising Chinese influence in the Middle-East.