Chabahar Port and India-Iran Relations

(ET, jun.04)

Iran's Foreign Minister Hossein Amir Abdollahian to visit India next week​

Iran's Foreign Minister Hossein Amir Abdollahian will visit India next week, and connectivity via the Chabahar port, the situation in Afghanistan and global energy markets are expected to dominate the bilateral talks.

This will be Abdollahian's first visit ever to India since taking charge last year. He was expected to visit India earlier this year, but that was postponed as External Affairs Minister S Jaishankar was diagnosed with Covid. However, since last year, the two had met three times on the side-lines of various multilateral events.

ET has learnt that expanding trade and supplies via Chabahar Port to Afghanistan and Central Asia and Eurasia will be key items on the agenda of the visit. The Afghan situation and dealing with the Taliban will also be on the agenda.

Chabahar Port is of considerable focus for India for connectivity to Afghanistan, Central Asia and Russia. Kazakhstan and Uzbekistan have interest in using Chabahar Port to trade with India and seek access to the Indian Ocean Region. The International North South Transport Corridor or INSTC that connects India with Russia via Iran is also getting momentum and may figure during the Iranian FM’s visit. Iran and Russia share close political and security ties.

After operations began at the Chabahar port in December 2018, the port handled more than 8200 TEUs and 1.28 million tonnes of bulk cargo.

Last month both the foreign ministers had telephonic conversation during which Jaishankar invited the Iranian counterpart to visit India. During the conversation, both the ministers discussed the situation in Afghanistan, Yemen, and Ukraine. The volatility in the global energy markets is also expected to figure during Abdollahian's visit. On Friday speaking at a Forum in Slovakia, Jaishankar questioned Western logic on withholding Iranian and Venezuelan oil from the world market.

The visit occurs in the backdrop of India's first formal engagement with Taliban and days after India hosted Israeli Defence Minister. The visit is also taking place close on the heels of a meeting between NSAs of India and Iran on the side-lines of regional NSAs meet in Dushanbe on the Afghan situation.
m.economictimes.com

Iran's Foreign Minister Hossein Amir Abdollahian to visit India next week

This will be Abdollahian's first visit ever to India since taking charge last year. He was expected to visit India earlier this year, but that was postponed as External Affairs Minister S Jaishankar was diagnosed with Covid. However, since last year, the two had met three times on the side-lines...
m.economictimes.com
 
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Sonowal's Iran visit could see extension of lease for Chabahar Port​

Recent geopolitical developments have speeded up the Centre’s pursuit to leverage Iran’s Chabahar Port for trade, and with Union Shipping and Ports Minister Sarbananda Sonowal’s visit to Iran, India may extend the short-term lease agreement for the port by another 18 months, Business Standard has learnt.

The Ports and Maritime Organisation (PMO) of Iran has proposed the extension by one and a half years, and the proposal is being examined by the Centre and is likely to be taken up during Sonowal’s Iran visit, shipping ministry officials in the know of the matter told Business Standard.

“Our vision is to make Chabahar Port a transit hub and link it to the INSTC (International North South Transport Corridor) to reach out to Central Asian countries,” Sonowal told the media in the run-up to his visit.

The short-term lease agreement for using the Shaheed Behesti terminal typically sees a renewal tenure of one year on a rolling basis.

An official said the attempt was to increase the tenure of the agreement as an in-principle commitment to continue cooperation in developing the port.

However, sources indicated India had raised the issue of the lack of a long-term investment commitment becoming a hurdle in the way of trade, and is looking to make progress on a long-run agreement to instil confidence in all stakeholder countries.

Long-term supply chains can be established only when industries are assured of the longevity of a project.

“The development of the Chabahar Port Project is a prestigious project of national importance,” the ministry said on Thursday. This is after a period of dormancy in the development of the port, which is operated by India Ports Global.

The ministry has been pushing for higher trade engagement through the port, and is seeking a trans-Caspian multi-modal transit corridor between Central Asia and South Asian nations.

The route was identified as an alternative to the European one via the Suez Canal, which takes significantly longer.

The INSTC is a 7,200-km corridor, conceptualised to optimise trade between India, Russia, and Eurasian and Central Asian economies, and it reportedly has an eight-fold increase potential.

Sonowal is likely to sign a memorandum of understanding concerning mutual recognition of seafarers’ certificates of competency in unlimited voyages between India and Iran.

Ministry officials said the signing could also result in training exercises of Iranian seafarers in India, as a show of mutual cooperation.

Five years ago, Chabahar Port was a symbol of the promise of flourishing multilateral trade between Central Asian countries, India, Russia, and Europe through the INSTC.

Today, Iranian sanctions, lack of shipping lines, and a strong supply chain have made traders wary of leveraging the route, and they are still using alternative, much longer routes to conduct trade with Russia and Europe.

Last year, the Centre told Parliament international sanctions on Iran had no impact on Chabahar Port. However, shipping sector insiders and officials say the hesitation it causes in traders to engage in transactions with Iran and the reluctance of banks to get involved in such transactions have been an impediment to the port’s development.

The Centre has been trying to address the issue of supply chains. Recently, India and Uzbekistan inked an agreement to conduct a pilot container cargo shipment with the larger aim to explore regular trade opportunities between Tashkent and New Delhi.

Similar negotiations are happening with other nations, and, barring Turkmenistan, deliberations with all other countries are progressing well, an official said.

The key focus of these is to ensure there is a regular supply of both inbound and outbound cargo, because the lack of either would cause delays and cost escalation.

Russia’s invasion of Ukraine has opened a new window of opportunity for India’s trade through the INSTC. According to reports, India’s imports of Russian oil increased after it recently offered the commodity at heavy discounts following international sanctions led by the US.

Sonowal’s visit comes after delegations from countries of the Commonwealth of Independent States (CIS) recently joined India’s Chabahar Day celebrations, where Indian industry showed willingness to increase trade in the region.
www.business-standard.com

Sonowal's Iran visit could see extension of lease for Chabahar Port

The short-term lease agreement for using the Shaheed Behesti terminal typically sees a renewal tenure of one year on a rolling basis
www.business-standard.com
 
 
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