INDIA AND IRAN DEAL (Syllabus: GS Paper 2 - IR)

News-CRUX-10     28th July 2023        

Context: India and Iran are expected to sign a long-term deal for the development of Iran’s Chabahar Port by September before the Global Maritime India Summit 2023 scheduled in New Delhi in October.

Key Points

  • Currently, India and Iran sign one-year contract extensions for developing and running the terminal at Chabahar Port. 
  • However, India has been urging Tehran to commit to a longer-term pact, providing certainty for investment and development plans for the port designed by India. 
  • In 2016, India committed $85 million for the development of the port, along with a $150 million line of credit. 
  • As of 2023, India has supplied six gantry cranes to the tune of $25 million for the development of the port. 
  • However, Iran has voiced dissatisfaction with India’s efforts in the past.
  • In 2013, India pledged $100 million to develop the port, but matters progressed after the 2015 nuclear deal was struck between Iran and the Permanent Members of the UN Security Council, Germany and the European Union. 
  • In 2016, India, Iran, and Afghanistan signed an agreement to develop Chabahar as a trade and transport corridor to bind their economies together. 
  • The resumption of US sanctions in 2019 and the fall of Afghanistan in 2021 have complicated matters and slowed work on the port.