India, Iran discuss development of Chabahar Port

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    • Recently, delegation-level talks between Iran and India were held where both sides agreed on continued cooperation for the development of the Shahid Beheshti terminal of the Chabahar port.  

    Major highlights of the meeting

    • Bilateral relations: 
      • India and Iran discussed the entire gamut of bilateral relations including political, economic, cultural, and consular engagement.
      • Both countries exchanged views on regional and international issues including Afghanistan.
    • Joint Comprehensive Plan of Action was also discussed in the meeting:
      • It is also known as the 2015 Iran nuclear agreement.
      • Iran agreed on a long-term deal on its nuclear programme with a group of world powers known as the P5+1 (the US, UK, France, China, Russia and Germany).
      • Under it, Iran agreed to significantly cut its stores of key components for nuclear weapons like centrifuges, enriched uranium and heavy-water.  

    About Chabahar Port 

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    • Location:
      • It is a seaport in Chabahar located in southeastern Iran, on the Gulf of Oman. 
      • It serves as Iran’s only oceanic port, and consists of two separate ports named Shahid Kalantari and Shahid Beheshti.
      • It is only about 170 kilometres west of the Pakistani port of Gwadar.
      • It is the only Iranian port with direct access to the Indian Ocean.
      • Being close to Afghanistan and the Central Asian countries of Turkmenistan, Uzbekistan it has been termed the “Golden Gate” to these landlocked countries. 
    • Background:
      • India and Iran first agreed to plans to develop Shahid Beheshti port in 2003, but did not do so on account of sanctions against Iran
      • India is developing the 1st phase of Shahid Beheshti Port. The capacity of the port will reach 8.5 MT at the end of the first phase.
      • India Ports Global Ltd (IPGL) operates the Shahid Beheshti terminal. 
    • International arbitration process: 
      • India and Iran are discussing establishing an international arbitration process for any dispute settlement pertaining to the strategic Chabahar port in Iran.
      • Under Iran’s constitution, such arbitration cannot be referred to foreign courts. 
        • International arbitration would require an amendment to the constitution. 
    • Significance of Chabahar Port for India: 
      • The port gives access to the energy-rich Persian Gulf nations’ southern coast & Central Asia and India can bypass Pakistan with the Chabahar port becoming functional.
      • Due to its location in the Gulf of Oman and at the entrance of the Strait of Hormuz and enables Iran to have direct entry to the Indian Ocean
      • This port will reduce dependency on the Suez Canal and reduce transportation time.
      •  It will facilitate India’s role in Afghanistan’s development.
      • Chabahar Port is also quite near the Gwadar Port of Pakistan being developed by China. It will also counter the China-Pakistan Economic Corridor (CPEC).
      • It will help India in strengthening its maritime power in this region.

    India-Iran relations 

    • Diplomatic relationship: 
      • It was established in 1950 with the friendship treaty after which the visits on the ministerial level have increased.
    • Commercial ties:
      • India-Iran commercial ties were traditionally dominated by the Indian import of Iranian crude oil. 
      • In 2018-19 India imported USD 12.11 billion worth of crude oil from Iran.
      • India had stopped buying oil from Iran after the US administration imposed tough sanctions on Iran. 
        • Iran is keen on re-starting oil supplies to India and has even offered some concessions on the delivery of crude.
    • Trade:
      • The bilateral trade during 2019-20 was USD 4.77 billion, a decrease of 71.99 per cent as compared to the trade of USD 17.03 billion from 2018-19.
      • Indian exports to Iran between 2011-12 and 2019-20 have grown by 45.60 per cent.
      • India’s major exports to Iran include rice, tea, sugar, soya, medicines/pharmaceuticals, man-made staple fibers, electrical machinery, etc. 
      • Major imports from Iran include inorganic/organic chemicals, fertilizers, cement clinkers, fruits and nuts, leather, etc. 
      • Both countries are negotiating a Preferential Trade Agreement, on which five rounds of talks have been held so far. 
    • People to people contacts:
      • There is a high level commitment in both countries to promote and facilitate people to people contacts. 
      • Indian pilgrims visit the Shi’a pilgrimage circuit in Iran (Qom, Mashhad, Hamedan) and Iraq (Najaf and Karbala) every year. 

    Way Forward

    • India and Iran need to rebuild their ties affected adversely by recent global events.
    • India must try to remain politically engaged with Iran for a better appreciation of each other’s sensitivities and compulsions and mutual interests.
    • It is extremely important for India to take the lead in creating an institutional structure with Iran and Afghanistan and pursue the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline project to ensure energy security.   

    India’s Overseas Port Investments

    • Haifa Port:
      • In 2022, a partnership between Adani Ports and Special Economic Zone Ltd (APSEZ) and the Gadot Group in Israel won the lease to privatise Israel’s second-largest port.
    • Colombo Port’s West International Container Terminal:
      • Adani Ports and Special Economic Zone Ltd signed an agreement to construct and operate the West Container Terminal (WCT) of the Port of Colombo, Sri Lanka. 
    • Sittwe Port: 
      • India constructed the deepwater Sittwe Port in Myanmar in 2016.
      • The port was constructed as part of the Kaladan Multi Modal Transit Transport Project. This project will link Myanmar’s Sittwe Port to the Myanmar-India border.
    • Chattogram and Mongla Ports: 
      • In 2018, India and Bangladesh reached a bilateral agreement for the utilisation of the ports of Mongla and Chittagong in Bangladesh to promote transshipment.

    Source: TH