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As India and Iran signed a long-term contract for operating the Shahid-Beheshti Port Terminal in the presence of Indian and Iranian ministers, it is pertinent to note that the Chabahar port pact deal inked between the two nations will not only enhance regional connectivity but will also facilitate trade, particularly between India, Iran and Afghanistan.

The Long Term Bilateral Contract on Chabahar Port Operation was signed between Indian Ports Global Limited (IPGL) of India and the Port & Maritime Organisation (PMO) of Iran, enabling the operation of Shahid-Behesti in the Chabahar Port Development Project for a period of 10 years.

“The Union Minister of Ports, Shipping & Waterways, Sarbananda Sonowal, along with Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran, attended the historic signing of the agreement ceremony held here today. Earlier, A Memorandum of Understanding (MoU) for development of Chabahar Port by India was signed in May 2015. Thereafter, the contract was executed on May 23, 2016 at Tehran (Iran) during the visit of the Hon’ble Prime Minister of India to Iran,” the office of Union Minister Sarbananda Sonowal said in an official release.

“This agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan. The India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of IPGL, facilitated the first consignment of exports from Afghanistan to India in 2019,” the release added.

The operations continued through short-term contracts, while negotiations on the long-term agreement peaked with the visit of Union Minister Sarbananda Sonowal to Chabahar in August, 2022.

This 10-year long-term lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust among trading communities in the region.

The Chabahar Port is an India-Iran flagship project that serves as an important transit port for trade with Afghanistan and Central Asian countries, which are landlocked countries. India has been a key player in the development and operation of Chabahar Port.

The Indian government has invested in the port’s infrastructure and has been involved in upgrading its facilities to make it a viable transit route for Indian goods bound for Afghanistan and Central Asia.

In August 2023, Prime Minister Narendra Modi met with Iranian President Ebrahim Raisi in Johannesburg on the sidelines of the BRICS Summit.

Both leaders discussed the pending long-term Contract on Chabahar, and gave a clear political direction to finalise and sign the long-term Term Contract.