Indian prime minister Narendra Modi has met his Iranian counterpart Hassan Rouhani and signed an agreement to develop the Iranian port of Chabahar.
India will commit US$500m to developing the port, which is in the east of Iran and will facilitate Indian trade with Iran and Afghanistan. Of this money, US$85m will be spent in developing two container berths with a length of 640m and three multi-cargo berths.
At present, Indian trade with Central Asia must either pass through the Iranian port of Bandar Abbas, which is further away than Chabahar from India, or negotiate Pakistan’s ports, which have been accused of deliberately slowing down Indian cargo due to the two countries’ frosty relations.
Indian shipping minister Nitin Gadkari, who was also in Iran, said: “The distance between [the Indian port of] Kandla and the Chabahar port is less than the distance between New Delhi and Mumbai. So what this agreement does is to enable us quick movement of goods first to Iran and then onwards to Afghanistan and Russia through a new rail and road link.”
The Chabahar project has been on the table since 2003, although it’s been pushed more aggressively in the last year, as sanctions on Iran looked to be coming to an end.
Geopolitical analysts have claimed that this project is fuelled by a competition between India and China for influence over Central Asia. China has funded the port of Gwadar in Pakistan, which is only 170km east of Chabahar.