With the opening of the Indian Ports Global Limited's office in Chabahar on Monday, Iran has officially leased the operational control of Shahid Beheshti Port to India.
The Indian company is a joint venture managed by Jawaharlal Nehru Port Trust and Kandla Port Trust for the development of ports overseas.
"The Indian company’s operational control would last for one and a half years, which may be followed by a 10-year extension," Mohammad Ali Hassanzadeh, the deputy head of Ports and Maritime Organization of Iran, said.
Loading and unloading as well as supply of equipment and marketing will be part of IPGL mission in Chabahar, IRNA quoted the official as saying.
The first phase of the strategic Iranian port developed in cooperation with India was inaugurated by Iran’s President Hassan Rouhani on Dec. 3. Chabahar is Iran’s only oceanic port town and consists of two separate ports: Shahid Kalantari and Shahid Beheshti.
The opening of the first phase of Shahid Beheshti Port (out of five phases defined for the project), which has tripled its capacity to 8.5 million tons (equal to that of all the northern ports of the country), will allow the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increase India’s connectivity with Afghanistan.
The Indian company’s operational control would last for a temporary period of 1.5 years, which may be followed by a 10-year extension
"Chabahar Port offers the widest range of tariff incentives for ports and maritime services among other ports of the Sea of Oman and the Persian Gulf," he said.
"This strategic region is the best spot for transit and trade between India, Afghanistan and other countries in the region, especially the Commonwealth of Independent States."
Trilateral Meeting
The inauguration of IPGL's office was timed to coincide with a trilateral meeting of officials from India, Afghanistan and Iran in Chabahar on Monday during which the three sides agreed on the routes for trade and transit corridors.
India, Iran and Afghanistan signed a pact in May 2016, which entailed the establishment of a transit and transport corridor among the three countries using Chabahar Port as one of the regional hubs for sea transportation, besides the multimodal transport of goods and passengers across the three nations.
Under an agreement, India is to equip and operate two berths in Chabahar Port's Phase I with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million.
According to India's Ministry of External Affairs, this was the first meeting of the follow-up committee for the implementation of the trilateral Chabahar agreement at the level of joint secretary or director general.
Discussions were held between the three sides on the full operationalization of the agreement for international transit and transport through Chabahar and they agreed on the routes for establishing the trade and transit corridors, Press Trust of India reported.
They agreed to finalize the protocol to harmonize transit, roads, customs and consular issues.
During the meeting, it was agreed to allow cargo movement at Chabahar using Transports Internationaux Routiers Convention provisions.
The convention is a multilateral treaty concluded at Geneva, Switzerland, on 14 November 1975 to simplify and harmonize the administrative formalities of international road transport. It establishes an international customs transit system with maximum facility to move goods in sealed vehicles or containers, from a customs office of departure in one country to a customs office of destination in another country.
However, it does away with extensive and time-consuming border checks at intermediate borders while providing customs authorities with the required security and guarantees.
The TIR system not only covers customs transit by road but a combination is possible with other modes of transport (e.g., rail, inland waterway and even maritime transport), as long as at least one part of the total transport is made by road.
It was also decided at the Monday meeting to hold an event to highlight the potentials of Chabahar on Feb. 26, 2019.
A study will also be initiated for determining measures to decrease logistic costs and pave the way for the smooth implementation of the Chabahar trilateral agreement.
The next follow-up committee meeting, followed by the second coordination council meeting at the level of secretaries or deputy ministers, will be held in India.
Trade facilitation, the role of operators, customs, warehouses and exchange of information were among topics discussed during the meeting.
There were also negotiations on preferential trade agreements between the three countries to impose lower tariffs on goods produced in the member-states than on non-member nations.
Located in Sistan-Baluchestan Province on Iran's energy-rich southern coast, Chabahar is easily accessible from India's western coast. The port is considered a gateway to trade opportunities for India, Iran and Afghanistan with Central Asian countries, besides ramping up trade among the three countries. It is located 100 nautical miles from the Chinese-built Gwadar Port in Pakistan.
Exempt From US Sanctions
The United States has exempted Chabahar from new sanctions on Tehran, recognizing the value of the project to Afghanistan.
"The United States will exempt from sanctions the development of Chabahar, along with an attached railroad project and Iranian petroleum shipments into Afghanistan," the US State Department said in November.
US President Donald Trump's "South Asia strategy underscores our ongoing support of Afghanistan's economic growth and development, as well as our close partnership with India", a State Department spokesperson said.
"This exception relates to reconstruction assistance and economic development for Afghanistan. These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief."
The United States has been building closer relations with New Delhi since the late 1990s.
Trump's May decision to unilaterally pull out of the nuclear deal Iran signed with world powers, including the United States, in 2015 and impose "toughest-ever" sanctions against the Islamic Republic has been opposed by European powers as well as other nations, including India, which has mutually beneficial relations with Iran.
India has financially assisted Afghanistan since the 2001 US-led invasion of Afghanistan.
New Delhi considers Chabahar as a key way both to send supplies to Afghanistan and step up trade with Central Asia as well as Africa.
“We have shipped about 110,000 metric tons of wheat and 2,000 tons of pulses from India to Afghanistan through this port [Chabahar]. We might also need to pursue the development of a rail line from Chabahar to Zahedan,” Indian Foreign Secretary Vijay Gokhale was recently quoted as saying.
Iran plans to link the port by railroad to Zahedan near the Pakistani border and up to Mashhad in the northeast.
On the back of a rail link that stretches to Iran’s northwestern border, Chabahar will facilitate the transport of goods from India to the landlocked countries of Commonwealth of Independent States as well as Afghanistan.
India has agreed to build a 500-km railroad from Chabahar to Zahedan, the provincial capital of Sistan-Baluchestan, close to the Afghan border. India’s state-owned IRCON has agreed to build a rail route at a cost of $1.6 billion as part of the transit corridor to Afghanistan.
After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan. Hence, when the Afghan cargo arrives in Zahedan, it can be transported by a 1,380-km railroad to Chabahar and then shipped to India.
It was in 2003 that India first proposed developing Chabahar Port as a gateway for the country to access the landlocked markets of Afghanistan and Central Asia, as New Delhi’s tense ties with Pakistan blocked overland trade through Pakistan.
