Chabahar Port and India-Iran Relations

Iran President Flags Off Train Along New Rail Section of INSTC
Passenger and cargo trains can speed up to 160 kilometers per hour and 120 km/ph respectively on this route, which has 53 tunnels and 45 bridges along the way, collectively stretching for 22 kilometers and 8.4 kilometers respectively



Iran President Flags Off Train Along New Rail Section of INSTC - Photo: Hossein Javadi

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The long-awaited Qazvin-Rasht railroad project was officially inaugurated by the Iranian President Hassan Rouhani on Wednesday in the northern city of Rasht, Gilan Province.

A train was flagged off by the president from the northern city for the holy city of Mashhad in Khorasan Razavi Province.

This rail route was one of the main missing links along the International North-South Transport Corridor.

With the new railway coming on stream, Gilan will be Iran’s 22nd province that enjoys connectivity to the national railway network.

The construction of Qazvin-Rasht railroad began in the Iranian year 1385 (fiscal 2005-2006).

A rail route connecting Rasht to Astara on the border with Azerbaijan is another missing link along the INSTC.



Some 18.5 trillion rials (more than $145.1 million) have been spent on this 164-kilometer-long project, 13 trillion rials (close to $102 million) of which during the first and second terms of President Hassan Rouhani, IRNA reported.

With the new railway coming on stream, Gilan will be Iran’s 22nd province that enjoys connectivity to the national railway network

The newly-inaugurated railway has the capacity to transport 1.4 million passengers and around 5.1 million tons of cargos in the first year.

Plans are to increase these figures to 2.8 million passengers and 7 million tons in a 20-year vision plan.

According to Minister of Roads and Urban Development Mohammad Eslami, passenger and cargo trains can speed up to 160 kilometers per hour and 120 km/ph respectively on this route, which has 53 tunnels and 45 bridges along the way, collectively stretching for 22 kilometers and 8.4 kilometers respectively.

Nine train stations have been built along Qazvin-Rasht with a total area of 39,455 square meters.

More than 22 million cubic meters of earthwork including 12 million cubic meters of embankment and 10 million cubic meters of excavation have been carried out for this project, more than 40% of which have been constructed on mountainous regions.



Saving on Time, Cost


According to Head of Construction and Development of Transportation Infrastructure Company of Iran, Kheirollah Khademi, the inauguration of Qazvin-Rasht will cut cargo transportation time from India to the Suez Canal from 36 days to 18 days, and reduces costs by around 35%.

Since the INSTC rail route has yet to be completed for full operationalization, multi-modal transportation will be used (by road and sea as well as rail) until the missing links come on stream.

“The contractors, engineers and construction workers in this project were all Iranians from the beginning to the end,” he was quoted by the news portal of the Ministry of Roads and Urban Development as saying.

Abbas Khatibi, deputy head of Construction and Development of Transportation Infrastructure Company of Iran says transportation of cargo and passengers via Qazvin-Rasht railway will save up to 20 million liters of fuel per year.

“Moreover, it reduces air pollution and saves up to 157 billion rials ($1.23 million) every year. Using this rail route will reduce road accidents and save around 352 ($2.76 million) billion rials annually. The project will create around 165 jobs.” he was quoted by ILNA as saying.

INSTC is a major transit route designed to facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads, which the Islamic Republic plans to connect to those of Azerbaijan and Russia.The corridor will connect Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network.
 
India-Iran Trade: Looking Beyond Crude, Pushing For Barter

Undeterred by U.S. economic sanctions, India and Iran are working together to put in place a barter mechanism to boost bilateral trade. Additionally, the two sides are also close to finalising a Preferential Trade Agreement (PTA) which is expected to give a fillip to trade between the two countries.

Seeking to circumvent U.S. sanctions that have made payments for commodities difficult, New Delhi and Iran have also decided to shore up the rupee payment mechanism, currently in use for India’s purchase of Iranian crude.

While India has decided to open a branch of IDBI bank in Tehran—UCO Bank is already present there—Iran is opening a branch of Pasargad bank in Mumbai. The IDBI, like UCO bank, will be handling rupee transactions.

The barter system, currently in use for oil trade between India and Iran, is expected to cover other commodities, said sources. While New Delhi got a temporary U.S. waiver for importing Iranian oil, the unilateral sanctions have led to a dip in imports. This waiver ends early May but New Delhi that recently said it’s in discussions with the Trump administration on this matter expects to get an extension.

The need to expand and diversify the trade basket which is currently dominated by crude imports from Iran is learnt to have prompted the two sides to explore a barter mechanism and explore the possibility of a PTA.

The sanctions-hit Iranians are keen on having the barter system for commodities other than oil. India-Iran bilateral trade during the 2017-18 fiscal was worth US $13.8 billion with the balance tilted in Iran’s favour due to its oil exports. India imported US $11.11 billion worth of goods—around $ 9 billion constituted oil imports—and exported commodities worth US $2.7 billion.

However, sources said actual trade was in the range of US $20-25 billion which is conducted indirectly, especially due to U.S. sanctions. The Iranians believe this can go up to US $30 billion if there is a barter mechanism for direct trade. Many items can be exchanged without going through the banking channels is one the reasons Tehran is said to be pushing for the barter mechanism.

For instance, it is looking to supply urea and barter it for soybean meal (used to feed animals) which it already imports from India. Nearly one-third of India’s demand for urea is met by Iran and sanctions have forced the former to import this commodity through third parties, increasing its cost by 38 per cent for the Indian farmer.

Apart from Iranian crude and urea, other Indian imports from Iran include inorganic and organic chemicals, fruits, nuts, glass and glassware, natural or cultured pearls and precious and semi-precious stones.

Among the major items of imports by Iran are iron and steel, rice, tea, pharmaceuticals, electrical machinery, etc. Iran imports ingredients for drugs manufactured by its pharma industry from India and is keen on increasing these imports.

As for the PTA, sources said it is almost finalised. Yet another round of talks to discuss which commodities can be included in the PTA by both countries was held in Tehran recently. A previous round of talks was held in New Delhi in January.

“We will choose commodities on which the lowest import tax can be levied,” said sources. “For example, Iranian apples are among the best in the world. If tariffs go down, India can import apples from Iran. And Iran, in turn, can import other fruits from India instead if importing them all the way from Latin American countries,” sources added.

Bilateral trade and investment is also expected to get a further boost with the Iranian Majlis recently giving its approval to the double taxation avoidance pact. Signed during Iranian President Hassan Rouhani’s visit to New Delhi in February last year, the agreement is expected to aid the flow of investments, technology and personnel between India and Iran.

Apart from having systems in place that will facilitate bilateral trade, the two countries are also involved in active outreach to their business communities.

Iranian foreign minister Javad Zarif’s during his visit to New Delhi in January 2019 proposed the setting up of an India-Iran Chamber of Commerce that will facilitate business between the two countries.



The Indian embassy in Iran brought businessmen from both countries together at an ‘Expanding India-Iran Trade’ event last month in the Iranian capital. According to the embassy, there were nearly 100 participants at this event in which New Delhi also made a push for Iranian business to explore having ties with not just the Centre but with states as well.
 
Iran Sets 60-Day Nuclear Countdown Unless Europe Delivers Trade

Iran Sets 60-Day Nuclear Countdown Unless Europe Delivers Trade


Ladane Nasseri, Arsalan Shahla and Golnar Motevalli

BloombergMay 8, 2019

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Iran Sets 60-Day Nuclear Countdown Unless Europe Delivers Trade

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(Bloomberg) -- Iran threatened to abandon limits on uranium enrichment unless Europe throws it an economic lifeline within 60 days, setting an ultimatum for the survival of a shaky 2015 accord meant to prevent the Islamic Republic from developing a nuclear bomb.

The move is likely to inflame tensions with President Donald Trump’s administration, which walked away from the landmark nuclear deal a year ago and imposed strict sanctions that squeezed Iran’s economy, triggered a currency collapse and ushered in shortages of consumer goods.

Iran’s appeal was addressed to European signatories to the agreement, which are struggling to reconcile Trump’s hardline stance on Iran with their promise to continue trading and engaging with the energy-rich nation.

U.S. Secretary of State Mike Pompeo responded cautiously to Iran’s announcement. “I’ve seen the letter that’s been sent, I think it was intentionally ambiguous. We’ll have to wait and see what Iran’s actions actually are,” he said during a press conference in the U.K.

Germany and Britain have said they’ll continue working to salvage the multilateral agreement that succeeded in limiting Iran’s nuclear program, but urged Tehran to stick to its commitments and avoid escalation. The U.K. said it was not considering imposing sanctions at this stage.

“There will of course be consequences” if Iran breaks its commitments, U.K. Foreign Secretary Jeremy Hunt said, standing alongside Pompeo. “As long as Iran keeps its commitments, so will the U.K.”

German trade with Iran was worth 3.4 billion euros ($3.8 billion) in 2017 and 1.5 billion euros in the first half of 2018. Trade with France totaled 2.42 billion euros last year. But secondary U.S. sanctions, which punish non-American companies and financial institutions doing business with Iran, mean major European companies are already staying away.

The U.S. stepped up economic pressure early this month by allowing the expiration of waivers that permitted eight governments to import Iranian oil, in a drive to cut Iran’s oil exports to zero and force Tehran to end support for militant groups around the Middle East.

No Commitment

In a letter to other signatories, Iran’s Supreme National Security Council said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and could stop observing limits on uranium enrichment at a later stage.

The level of nuclear enrichment Iran is allowed to pursue is at the heart of the nuclear agreement, because material enriched at a sufficiently high concentration could be used to produce a bomb.

If European partners meet pledges to facilitate Iran’s access to banking and oil markets, however, it will restore full compliance with the agreement, known formally as the Joint Comprehensive Plan of Action, or JCPOA.

“Whenever our demands are met, we will equally resume fulfilling commitments, otherwise the Islamic Republic will halt other commitments step by step,” the statement said.

Oil futures traded little changed in London. Prices have already jumped 29 percent this year, in part because of U.S. efforts to tighten sanctions on Iranian oil exports.

U.S. Strike Force

As some of the signatories seek a way to keep the deal alive, the U.S. is preparing for other options. On Sunday, the administration said it was deploying an aircraft carrier to the Gulf in an “unmistakable message” to Iran that it would meet any aggression with “unrelenting force.” And on Tuesday, it said B-52 bombers were also heading for the Middle East, where confronting Tehran has become a cornerstone of U.S. policy.

Israeli Prime Minister Benjamin Netanyahu has already warned his country would confront any Iranian move to develop a weapon.

”On the way here, I heard that Iran intends to continue its nuclear program," Netanyahu said at a Memorial Day event in Jerusalem. “We will not allow Iran to have nuclear weapons."

Iran has repeatedly denied it was pursuing an atomic weapon.

How U.S. Can Force the World to Squeeze Iran’s Oil: QuickTake

“By leaving the JCPOA, the U.S. wanted Iran to exit the following day so it would take the file to the Security Council. Iran didn’t fall into that trap,” Iranian President Hassan Rouhani said in a televised address. We “know how important the JCPOA is and its crumbling will have a negative impact on the region and the world,” he said. “ We don’t want to leave.”
 
_Anonymous_ said:
By destabilising regions that supply oil and gas, US is keeping Rising Asia off-balance


@RATHORE ; @BlackOpsIndia ; @Falcon ; @vstol Jockey ; @Shajida Khan ; @randomradio ; @Ashwin ; @R!cK ; @Gautam ; @nair ; @Arvind ; @Bali78 ; @Notsuperstitious ; @STEPHEN COHEN ; @Nilgiri ; @Milspec ; @suryakiran
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Very good point; I was actually quite dismayed to see India bending over like that re: Iran for exactly that reason. This is where I believe it'll make sense to occasionally hark back to the NAM style monkey balancing of the Cold War. China has to be dealt with, and should be treated as an enemy because it IS, but that doesn't mean surrendering Indian foreign policy to America; that too at India's own (serious) detriment.
 
  • Agree
Reactions: R!cK and _Anonymous_
_Anonymous_ said:
By destabilising regions that supply oil and gas, US is keeping Rising Asia off-balance


@RATHORE ; @BlackOpsIndia ; @Falcon ; @vstol Jockey ; @Shajida Khan ; @randomradio ; @Ashwin ; @R!cK ; @Gautam ; @nair ; @Arvind ; @Bali78 ; @Notsuperstitious ; @STEPHEN COHEN ; @Nilgiri ; @Milspec ; @suryakiran
Click to expand...
_Anonymous_ said:
India’s Betrayal of Iran is Only the Beginning | NewsClick
Click to expand...

Very interesting POV. Thank you for bringing this forward. It would be terribly unwise on our part to give away long term interests for the sake of short term interests. I'm not sure if MA ban will garner many votes, nobody is sure it actually happened at all. Things should become clearer as time goes on.

Middle east is reaching the point of "it's either them or us". It will become increasingly harder to balance all sides. More than the US, the KSA has an interests in getting Iran out of or hydrocarbon market.
 
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