India and Iran on Monday signed a key 10-year contract that will allow an Indian company to take over operations at Shahid Beheshti terminal of the strategic Chabahar port in Iran, in a move aimed at boosting regional maritime trade connectivity.
The agreement was signed between India Ports Global Limited (IPGL) and Iran’s Ports and Maritime Organization (PMO) in the presence of India’s Ports, Shipping and Waterways Minister Sarbananda Sonowal, who is on a visit to Tehran.
As per the pact, IPGL’s subsidiary India Ports Global Chabahar Free Zone (IPGCFZ) will operate the Chabahar terminal for 10 years. India plans to invest $120 million in equipping the terminal, while also offering a $250 million credit line for developing associated infrastructure.
This marks the first time an Indian company will operate a terminal at an overseas port, a strategic move that will boost trade ties between India, Iran and Afghanistan while allowing greater access to landlocked Central Asian nations.
“This agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan”, an official statement said.
Sonowal termed it a foundation for “India’s long-term involvement at Chabahar” with a “multiplier effect” on the port’s viability. He highlighted Chabahar’s potential as a hub for the International North-South Transport Corridor for linking India with Central Asia.
The U.S. had previously granted a sanctions exemption for Chabahar to facilitate Afghanistan’s trade and development. However, the State Department indicated the latest deal may not have a similar carve-out.
While calling sanctions on Iran “in place”, a spokesperson said any entity doing business with Iran risked potential sanctions exposure, without directly commenting on the Chabahar pact.
Iran has termed Chabahar a key maritime enabler for boosting trade connectivity to Central Asia, bypassing Pakistan. The port has handled over 8 million tons of cargo since India began operations there in 2019.