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India and Iran Sign Historic Bilateral Contract on Chabahar Port Operations

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Guwahati, May 13: The Long Term Bilateral Contract on Chabahar Port Operation was signed between Indian Ports Global Limited (IPGL) of India and the Port & Maritime Organisation (PMO) of Iran, enabling operation of Shahid-Behesti in Chabahar Port Development Project for a period of 10 years.

The Union Minister of Ports, Shipping & Waterways, Sarbananda Sonowal, along with His Excellency Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran, attended the historic agreement signing ceremony held in Tehran, Iran on Monday.

Earlier, A Memorandum Of Understanding (MoU) for India’s development of Chabahar Port was signed in May 2015. Thereafter, the contract was executed on 23rd May 2016 in Tehran (Iran) during the visit of the Prime Minister of India to Iran.

This agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran, and Afghanistan. The India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of IPGL, facilitated the first consignment of exports from Afghanistan to India in 2019.

The operations continued through short-term contracts, while negotiations on the Long-Term Agreement peaked with Union Minister Sarbananda Sonowal’s visit to Chabahar in August 2022. This 10-year long-term lease agreement further strengthens the bilateral ties between the two countries while bolstering the confidence and trust of trading communities from the region.

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Speaking on the occasion, the Union Minister of Ports, Shipping & Waterways and Ayush, Sarbananda Sonowal, said, “Today is a historic day for the maritime sector of the region as India and Iran signed this Long Term Agreement on Chabahar Port heralding a new age of trade, marine cooperation as well as transshipment while boosting trilateral trade among India, Iran, and Afghanistan. As India continues to invest in Chabahar Port, its efficiency and capacity will be further enhanced, solidifying India’s commitment to the region’s economic development. Under the dynamic leadership of Prime Minister Narendra Modi ji, India’s sustained engagement in Chabahar underscores its role as an anchor for Indian trade in the region while enhancing its role in the Global Supply Chain. India will use the port for humanitarian aid shipments, reaffirming its commitment to supporting regional development beyond commercial interests and showcasing its commitment to fostering goodwill and stability in the region.”

“Chabahar Port’s significance transcends its role as a mere conduit between India and Iran; it serves as a vital trade artery connecting India with Afghanistan and Central Asian Countries. This linkage has unlocked new avenues for trade and fortified supply chain resilience across the region. Under the leadership of Prime Minister Narendra Modi, India is on its way to becoming a major maritime player with a formidable supply chain network. Establishing regular ship calls between Chabahar Port and Indian ports has instilled stability and confidence among traders, offering them visibility and predictability in their supply chain operations,” Sonowal stated.

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Reaffirming Chabahar Port investment for boosting India’s economic growth, Sarbananda Sonowal said, “As envisaged by the Prime Minister, Narendra Modi, this project is also about encouraging Indian entrepreneurs to venture into the region from a long-term prospects. The port’s integration with a Special Free Zone augments its appeal. India’s incentives, such as concessions on vessel-related charges and cargo charges, bolster trade flows through Chabahar, fostering economic growth and cooperation. While we are optimistic about a growing trade with a favorable Balance of Trade, this is an opportunity for India’s business entities to expand their footprints in the bourgeoning Central Asian region. I must thank the leadership of Iran for their cooperation and support. The invaluable guidance by Prime Minister Narendra Modi turned this project into a viable reality with a long-term outlook,”.

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As part of the agreement, India will procure MHCs, RMQCs, RTGCs, Reach Stackers, Forklifts, Pneumatic Unloaders, etc., at Chabahar Port. The agreement paves the way for enhanced trade and investment opportunities, which will potentially boost India’s economic development.

Located in the Sistan-Baluchistan province on Iran’s southwest coast, the Chabahar port is an important point on the Arabian Sea with easy access from India’s west coast. Kandla port in Gujarat is the closest port to Chabahar port, at 550 Nautical Miles, while the distance between Chabahar and Mumbai is 786 Nautical Miles. Since 2019, it has handled container traffic of more than 80,000 TEUs and Bulk and General Cargo of more than 8 million tones.

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