As New Delhi aims to take advantage of a thaw in Tehran’s relations with world powers, India and Iran have reached a deal on Wednesday to develop a strategic port in southeast Iran.
Abbas Ahmad Akhoundi, Iranian Minister for Transport and Urban Development and his Indian counterpart Nitin Gadkari signed an inter-Governmental Memorandum of Understanding (MoU) regarding India’s participation in the development of the Chabahar Port in Iran.
“With the signing of this MoU, Indian and Iranian commercial entities will now be in a position to commence negotiations towards finalisation of a commercial contract under which Indian firms will lease two existing berths at the port and operationalise them as container and multi-purpose cargo terminals,” the Indian Foreign Ministry said in a statement.
Richard Verma, US Ambassador in India, cautioned against “rushing in” with the deal saying there is no guarantee that a final deal will be secured with Tehran by a June 30 deadline.
India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest $85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.
The port of Chabahar in southeast Iran is central to India’s efforts to open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.
“The availability of a functional container and multipurpose cargo terminal at Chabahar Port would provide Afghanistan’s garland road network system alternate access to a sea port, significantly enhancing Afghanistan’s overall connectivity to regional and global markets, and providing a fillip to the ongoing reconstruction and humanitarian efforts in the country,” said the Indian Foreign Ministry late on Wednesday evening.
Iranian President Hassan Rouhani, in his meeting with the Indian Minister in Tehran said, “Resumption of Iran-India cooperation in the southeastern Iranian port city of Chabahar would lead to a new chapter in relations of two countries.”
Meanwhile, India’s fellow BRICS member, South Africa is sending a delegation headed by its Foreign Minister for talks with Iranian leaders.
South Africa hopes to restore energy ties with Iran, its energy minister, Tina Joemat-Pettersson, said on Sunday.