India and Iran signed a historic pact on the strategic Chabahar port in southern Iran that will give India access to Afghanistan and Europe bypassing Pakistan.
India will invest up to $500 million to develop the strategic port in Iran. Besides the pact on Chabahar port, India, Afghanistan and Iran signed a trilateral agreement on Transport and Transit Corridor, which Prime Minister Narendra Modi said could “alter the course of the history of the region”.
Discussed India-Iran ties with President Rouhani. His leadership & clarity of vision is extremely impressive. pic.twitter.com/HVNZppH1Nr
— Narendra Modi (@narendramodi) May 23, 2016
The deal and plans were announced during Modi’s visit to Iran, the first such trip in more than a decade. The deal also represented a strategic victory for India over China, which has been competing to develop the port.
Chabahar is about 100 km from Pakistan’s Gwadar seaport which China is developing as part of a $46 billion China-Pakistan Economic Corridor.
The Chinese project, coming on top of investments in Sri Lanka, Bangladesh and the Maldives has raised raised concerns in India about China’s expanding reach in the region.India will invest up to $500 million to develop the strategic port in Iran. Click To Tweet
PM Modi said the bilateral agreement to develop Chabahar was an important milestone in relations between the two countries. The development of the port of Chabahar expands a trade route for the land-locked countries of central Asia that bypasses Pakistan.
Chabahar port, located in the Sistan-Balochistan Province on the energy-rich Persian Gulf nation’s southern coast, lies outside the Persian Gulf and is easily accessed from India’s western coast, bypassing Pakistan.
“The bilateral agreement to develop the Chabahar port and related infrastructure and availability of about $500 million from India for this purpose, is an important milestone,” Modi said. He was joined by Iranian President Hassan Rouhani and his Afghan counterpart Ashraf Ghani.
“This major effort would boost economic growth in the region. We are committed to take steps for early implementation of the agreements signed today,” he said.
Modi described cooperation in the oil and gas industries as key components of economic cooperation between Tehran and Delhi.
President Hassan Rouhani said working on the port can be a “great symbol” of cooperation between Iran and India. He said Iran’s energy resources and Indian mines can pave ground for cooperation in the aluminum, steel and petrochemical industries.
The two countries also signed a number of agreements to enhance technological, petrochemical and banking cooperation. India has paid back $750 million of the $6 billion in debt from past oil purchases to Iran. The payments had been held up due to international sanctions over Iran’s disputed nuclear program.
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