India signs contract with Iran to operate Chabahar Port, sanctions “unlikely”

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India signed a 10-year contract with Iran to develop Chabahar Port, investing US$370m to enhance trade routes to Iran, Afghanistan, and Central Asia, bypassing Pakistan.

India signed a 10-year contract with Iran to develop and operate Chabahar Port, enhancing ties with a key Middle Eastern nation, Reuters reported.

The port on Iran’s southeastern coast along the Gulf of Oman allows India to transport goods to Iran, Afghanistan, and Central Asia, bypassing the ports of Karachi and Gwadar in its rival Pakistan.

Talks began in 2003 but were stalled by US sanctions, but resumed after the 2015 Iran nuclear deal. India’s Shipping Minister Sarbananda Sonowal emphasized Chabahar’s importance in connecting India with Afghanistan and Central Asia, enhancing trade and supply chain resilience.

The agreement was signed between Indian Ports Global Limited (IPGL) and Iran’s Port and Maritime Organisation. India will invest US$120 million in the Shahid Beheshti terminal and provide an additional US$250 million in financing, bringing the contract’s value to US$370 million. Indian Foreign Minister Subrahmanyam Jaishankar highlighted the deal’s potential to attract further investments.

Since taking over operations in 2018, IPGL has handled significant container and bulk cargo traffic. India has shipped 2.5 million tons of wheat and 2,000 tons of pulses to Afghanistan via Chabahar.

Despite US sanctions on Iran, U.S. State Department deputy spokesperson Vedant Patel cautioned about the risks of doing business with Iran. India has generally adhered to US-led sanctions but faces a complex situation given its strategic relationship with Iran.

According to Al Jazeera, experts like Gulshan Sachdeva of Jawaharlal Nehru University believe broad sanctions against India are unlikely, though entities involved in the port deal might face some risks.

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