INSTC Hyped for More Investments Following Iran’s SCO Membership

Iran officially became the permanent member of the Shanghai Cooperation Organization on July 4, increasing the current SCO membership to nine. 
Alongside member states Russia and India, the new membership brings greater potential to Chabahar Port, facilitating transit via Iran and the International North-South Transportation Corridor, RailFreight.com wrote.
Last September, Iran signed a Memorandum of Obligations to become a permanent member of SCO. In addition to Iran, the current SCO membership includes China, Russia, India, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Pakistan.
Founded in Shanghai in 2011 as a security group, the organization has expanded its scope to cover issues of regional cooperation and development. Infrastructure and transportation, particularly the INSTC, are high on the agenda. Indian Prime Minister Narendra Modi confirmed this in a speech congratulating Iran’s arrival.
“With Iran’s membership in SCO, we can work towards maximizing the utilization of Chabahar Port. The International North-South Transportation Corridor can serve as a secure and efficient route for landlocked countries in Central Asia to access the Indian Ocean. We should strive to realize its full potential,” said Modi.
Originally, INSTC ran via the Iranian port of Bandar Abbas. This busy port in southern Iran is already connected by railroad, giving it an advantage over the more easterly situated port of Chabahar. However, Chabahar is much closer to India than Bandar Abbas. Moreover, US sanctions do not apply to this port.
The port highlights the potential of connecting Iran with the Indian market, which could be further expanded to Russia in the north and Southeast Asia on the opposite side. The main disadvantage is the lack of a rail connection. Currently, the port is awaiting investment to realize its potential.
India Ports Global Limited, the company operating Chabahar Port, has launched tenders for its development, with a budget of over €91 million. The Indian government has long been interested in investing in the port, but in February of this year, they allocated only a little over €11 million for Chabahar Port. 
With Iran’s membership in SCO, more private investments may find their way to this port and INSTC.