India is banking on the Chabahar Port that it is building in Iran to open new trade and business opportunities for its companies.
The port is expected to become operational in 12-18 months’ time. Meanwhile, talks are underway to build rail lines and roads through Afghanistan that would connect to the Chabahar Port.
Union Minister Nitin Gadkari, who is currently in Iran to represent India at the oath taking ceremony of President Hassan Rouhani for the second term, has said that once Chabahar Port becomes operational, there will be no looking back as it will be a gateway to golden opportunities.
“Talks are on for building railways and roads through Chabahar till Afghanistan and then we have access to Russia. Once Chabahar is operationalised, which we are hopeful to be in 12 to 18 months time, it will prove to be a gateway to golden opportunities to boost trade and business,” Gadkari said.
“We are hopeful of ratification of Trilateral Transit and Transport Agreement by Iran and once approvals are given, the work will start,” Gadkari said.
The trilateral pact was inked during Prime Minister Narendra Modi’s visit to Tehran in May 2016.
The pact envisages establishment of Transit and Transport Corridor between India, Iran and Afghanistan using Chabahar Port as one of the regional hubs for sea transportation in Iran besides multi-modal transport of goods and passengers across the three nations.
The Cabinet and the President had ratified the pact in November and December, 2016 respectively.
A government official said Afghanistan has also ratified it but Iran is yet to complete the internal processes of the ratification.
Gadkari said operationalisation of the Port will not accelerate the infrastructure projects but will be a “win-win situation” for the nations as it would give tremendous boost to trade and offer vast opportunities to investors.
“Chabahar will not only boost ties between Iran and India but we will be closer to Afghanistan and then Russia….We can export goods till Russia. This will be a direct route,” he said.
India has already built the Zaranj-Delaram Road in Afghanistan where the cargo reaching Zehedan can connect to.
“The rail route is aimed at connecting the existing rail network of Iran at Zahedan, and subsequently to Mashad in north area, thereby providing access to Turkmenistan as well as northern Afghanistan through its connection to the Bafq-Mashad route,” an official said.
This project will significantly enhance the opportunity for trade and business among the nations.
Chabahar-Zahedan Railway line project is located in the Sistan-Baluchistan province in eastern Iran.
Gadkari’s visit assumes significance as India has accelerated work on the Chabahar port and finalised some tenders for installation of key equipment at the port.
“Civil construction work has started there. We have finalised tenders worth Rs 380 crore for equipment out of Rs 600 crore and once the port becomes operational it will become a growth engine,” the minister had said.
For greater trade and investment flow with Iran and neighbouring countries, the Cabinet last year cleared proposals for development of Chabahar port including a $ 150 million credit from Exim Bank.
It also authorised the Shipping Ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities.
As per the MoU signed between the two nations in May last year, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $ 85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.
Ownership of the equipment will be transferred to the Iranian side on completion of 10 years or for an extended period, based on mutual agreement. The Iranian side had requested for provision of a credit of $150 million in accordance with the MoU.
As per the pact, operations of the two berths are to commence within a period of maximum 18 months after the signing of the contract.
Besides the bilateral pact to develop the Chabahar port, for which India will invest $500 million, a trilateral Agreement on Transport and Transit Corridor has also been signed by India, Afghanistan and Iran.