India Signs 10-Year Chabahar Port Deal: Key Move For Central Asia Trade

India has signed a landmark 10-year agreement with Iran to operate the Chabahar Port, marking a strategic move to bolster its foothold in Central Asia. The deal, between Indian Ports Global Ltd. (IPGL) and Iran’s Port and Maritime Organisation (PMO), grants India control over the Shahid Beheshti terminal at Chabahar, a critical component of the port’s infrastructure.

Chabahar Port, situated near the China-controlled Gwadar Port, holds significant strategic and logistical advantages. It features two main terminals, Shahid Kalantari and Shahid Beheshti, equipped with five berths each, capable of handling substantial cargo. Positioned in southeastern Iran, Chabahar provides direct access to the Indian Ocean, bypassing the Strait of Hormuz and offering a shorter route for cargo ships traveling to India, just 550 nautical miles from Gujarat’s Kandla port and 786 nautical miles from Mumbai.

Strategically located at the crossroads of South Asia, Central Asia, and the Middle East, Chabahar Port serves as a vital transit hub. It provides India an alternative trade route to Afghanistan and Central Asia, circumventing Pakistan and mitigating geopolitical tensions. Chabahar is integral to the International North-South Transport Corridor (INSTC), linking India, Iran, Russia, and Europe. This multimodal network reduces transit time and costs, enhancing trade efficiency and facilitating access to Central Asia’s abundant natural resources.

Economically, Chabahar Port enhances India’s trade prospects by diversifying routes and partners, reducing dependency on singular transit paths. The port’s operationalization is estimated to save up to 30% in costs and 40% in transportation time, benefiting landlocked Central Asian countries like Kazakhstan and Uzbekistan. These nations lack direct sea access and view Chabahar as a gateway to expand their market reach into India and beyond.

India’s commitment to Chabahar dates back to 2015 with a memorandum of understanding (MoU) and a trilateral agreement in 2016 involving Iran and Afghanistan to establish the International Transport and Transit Corridor. This initiative underscores India’s long-term strategic vision in the region, solidified by the recent 10-year operational agreement over Shahid Beheshti terminal. This move is expected to attract investments, bolster regional trade partnerships, and consolidate Chabahar’s role as a pivotal logistics hub.

Operationally, Chabahar Port not only facilitates trade but also enhances India’s naval footprint in the Indian Ocean, reinforcing maritime security and monitoring sea lines of communication. The port deal signifies India’s proactive role in Central Asia, countering regional influences and promoting stability through economic development. By fostering economic growth and interdependence, Chabahar contributes to regional stability, aligning with India’s broader goal of peace promotion through economic integration.