• India signs a 10-year contract with Iran to operate the Iranian port of Chabahar.
• The deal, worth $120 million, will provide India with a gateway to Afghanistan and Central Asia.
• India’s Shipping Minister, Sarbananda Sonowal, praised the deal as an “India-Iran flagship project.”

India’s newly signed deal to operate the Iranian port of Chabahar is expected to provide it with a gateway to landlocked Afghanistan and Central Asia, potentially competing with Pakistan’s Gwadar.

The 10-year contract, wherein India will invest $120 million in Chabahar’s infrastructure, was signed in Tehran on Monday between the state-owned Indian Ports Global Ltd and the Port & Maritime Organization of Iran.

India’s Shipping Minister Sarbananda Sonowal welcomed the deal, stating that the development of Chabahar was an “India-Iran flagship project” and emphasizing that the port would serve as a “gateway for trade with Afghanistan and broader Central Asian countries.”

New Delhi’s commitment to Chabahar began in May 2016 when Iran, India, and Afghanistan signed a trilateral transit agreement to develop the port into a regional trade hub.

“The signing of the deal signifies the strength of bilateral ties between India and Iran,” said D.P. Srivastava, who was India’s ambassador to Iran when talks on the project started.

“The present agreement will build on the progress achieved so far.”

India’s involvement in Chabahar in 2016 followed the US easing sanctions on Iran. However, Donald Trump’s administration reimposed the sanctions in 2018.

Following Monday’s agreement signing, US State Department spokesperson Vedant Patel informed reporters that the sanctions on Iran remained in place, and Washington would enforce them.

Prof. Sujata Ashwarya from the Centre for West Asian Studies at Jamia Millia Islamia in New Delhi stated that it was not likely that sanctions would affect India because its presence was helping deter China — the main rival of the US — from becoming involved in the Iranian port.

“(India) will effectively keep China out of the project,” Ashwarya said. “If we are there, then China won’t be there, and the US would not impose sanctions.”

Ashwarya stated that the Iranian port is a potential competitor to Gwadar, located less than 100 km away in southwestern Pakistan, which is a flagship project of multibillion-dollar China–Pakistan Economic Corridor under Beijing’s Belt and Road Initiative.

“It is an investment in trade facilitation with an eye on making Chabahar a hub,” she said.

“It provides competition to Gwadar, it could potentially lead to a secured corridor to Afghanistan and Central Asia, which means that India’s trade with these regions can flourish and broaden.”

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