Context

• India signed a 10-year agreement with Iran to manage the Chabahar port.
• This contract has been signed between India Port Global Limited (IPGL) and Ports and Maritime Organization of Iran.

Key Points

• After this important agreement, Iran's Chabahar port has now become India's port for the next ten years.
• This step of India will help the country in increasing trade with Central Asia.
• This ministerial visit and the signing of the long-term agreement will further strengthen relations between the two countries and also highlights the importance of Chabahar as a gateway to trade with Afghanistan and wider Central Asian countries.

Chabahar Port Project

• The development of this project is a major project of India-Iran.
• Chabahar Port in Iran is a commercial transit hub for the region and Central Asia in particular.
• INSTC will connect the two markets using a multi modal logistics corridor through the vibrant Shahid Beheshti port of Chabahar in Iran, thereby rationalising logistics costs, which will contribute to the trade volume between the two regions.
• Actually located as a hub of transit trade between India, Iran and Afghanistan, this port provides an alternative route to the traditional Silk Road.
• This port will open up trade and investment opportunities and boost India's economic growth.

Benefits of this agreement

• Chabahar port connects the prosperous Central Asian region to South Asian markets.
• It has emerged as important for trade, economic cooperation and connecting people between two geographical regions.
• Because of the potential of Central Asian markets, India-led connectivity has made access to the Indian Ocean region secure and commercially viable for Central Asian countries.
• This will not only provide connectivity, but will also promote investment while furthering India's cultural and political ties.
• It will also develop the transit and transportation potential of the Central Asian region and improve their logistics networks.
• The progress of Shahid Beheshti Port will support the rapid growth of trade and enhance the standard of living in the area.
• This infrastructure will expand trade and investment possibilities in the region.

America's attitude

• The US has warned India of "potential risks of sanctions" after India signed a 10-year deal to run the Chabahar port in Iran.
• External Affairs Minister S Jaishankar stressed that this should be looked at broadly by abandoning the narrow perspective. It is noteworthy that this project will benefit the entire area.

About Chabahar Port

• Chabahar Port is located in the Gulf of Oman in southeastern Iran.
• It is the only Iranian port that has direct access to the sea.
• It is located in the Sistan-Baluchistan province on the southern coast of energy-rich Iran.
• Chabahar Port is the gateway to trade by India, Iran and Afghanistan with Central Asian countries.

IMPORTANT FACTS FOR EXAM

Iran

• Capital: Tehran
• President: Ibrahim Raisi
• Supreme Leader: Ali Khamenei