Escalating geo-political tensions in West Asian region are unlikely to impact Indian operations at Chabahar port in Iran. Rather, in the current geo-political situation, the cargo throughput is likely to be consistent, “with a growing trend in future”, the Union Minister for Ports, Shipping and Waterway, Sarbananda Sonowal told businessline.
Earlier this week, a long term bilateral contract of 10 years covering operations of Chabahar port was signed between India and Iran.
Located in south-eastern Sistan-Baluchestan province and perched on the Gulf of Oman, Chabahar Port – a deep-draft port and the only one in Iran to have direct access to the Indian Ocean- consists of Shahid Kalantari and Shahid Beheshti ports. India will operate a terminal in Shahid Beheshti.
With the Chabahar port, India can avoid dealings with Pakistan, bypass Gawdar Port and also counter growing presence of China. The port can be leveraged to transport goods first to Iran and then onwards via rail or road networks to Afghanistan and resource-rich landlocked countries like Uzbekistan and Kazakhstan, with further potential connectivity extending to Russia.
Distance betwen Chabahar and Gujarat’s Mundra and Kandla ports is around 1,000 km, almost half the distance between Ahmedabad and Mumbai; and less than the 1,400 km road distance between Mumbai and Delhi.
“In the present geopolitical situation, the cargo through Chabahar is likely to be consistent with a growing trend in the future,” Sonowal said.
Sittwe Port in Myanmar is another such strategic investment that India has made in recent times. “Yes, more strategic pacts like Chabahar and Sittwe are under consideration,” the Minister added.
Operations so far
Chabahar Port has handled around 64,000 TEU’s (twenty equivalent units) and 1.9 million tonnes of cargo in FY24.
“There has been a significant growth in the number of containers handled by Chabahar port in FY24 vs FY23. The cargo throughput is likely to further increase in the coming years,” Sonowal said.
India will also be investing in Chabahar to ramp-up infra and enhance operations there. As per the contract agreement, Iran will procure equipment for the port. India will be assisting with funds for the procurement.
According to the Minister, India “will be providing funds for procurement of equipment as per the contract”. “Further, some investment will also be done for development of infrastructure related with Chabahar Port,” he said.
Initial information suggests, around $120 million will be spent on procurement of equipment in the next 3 years. India is also planning funds support of about $250 million for infrastructure development.
Earlier, the Embassy of India in Iran had, in a social media post, said, a credit window of $250 million equivalent has been offered for mutually identified projects aimed at improving “Chabahar-related infra”.
While the second phase of expansion of operations there has not yet been decided upon, “further expansion, if any, will be decided with mutual consent based on viability and other business considerations,” Sonowal added.