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Recently, Iran’s Port and Maritime Organization (PMO) has conveyed to India a request for locomotives and signaling equipment for the Chabahar-Zahedan railway line. Iran has been facing difficulty in procuring them directly due to the sanctions imposed by the USA. In November 2018 the United States imposed the toughest ever sanctions on Iran aimed at altering the Iranian regime’s “behaviour”. The sanctions cover Iran’s banking and energy sectors and reinstate penalties for countries and companies in Europe, Asia and elsewhere that do not halt Iranian oil imports. However, 8 countries – India, China, Italy, Greece, Japan, South Korea, Taiwan and Turkey — were temporarily allowed to continue buying Iranian oil as they showed “significant reduction” in oil purchase from the Persian Gulf country. The United States has exempted India from imposition of certain sanctions for the development of the strategically-located Chabahar Port in Iran, along with the construction of the railway line connecting it with Afghanistan. Iran has also asked India to activate the USD 150 million credit line which was offered to it by India during the Iranian President's visit in 2018.


It is located on the Gulf of Oman and is only 72 km away from the Gwadar port in Pakistan which has been developed by China. The port serves as the only oceanic port of Iran and consists of two separate ports named Shahid Beheshti and Shahid Kalantari. This port is very important for Iran as well as for India. If this route is opened then India will no longer need to seek help of the Pakistan to reach Afghanistan via road and sea route. This agreement was signed by Transportation Minister of India Mr. Nitin Gadkari and Iranian Minister Abbas Ahamad.

• Trade: It is being considered a gateway to golden opportunities for trade by the three countries with other Central Asian countries in the wake of Pakistan denying transit access to India.

• Security: China is aggressively pursuing its own Belt and Road Initiative (BRI) under the One Belt One Road (OBOR) project. The port can also act as a counter to Pakistan’s Gwadar Port, which is being developed with Chinese investment.

• Connectivity: In future, the Chabahar project and the International North South Transport Corridor (INSTC) will complement each other by optimizing Indian connectivity with Russia and Eurasia.


India started interacting with Iran on Chabahar Port around the year 2003. However the major push was received in the second half of 2014, leading to the signing of an MoU between Iran and India for the development of Chabahar Port in May 2015.This MoU translated into a formal 10-year Contract for Equipping and Operating the Chabahar Port. A trilateral transit agreement was also signed in May 2016 between India, Iran and Afghanistan on Establishment of International Transport and Transit Corridor. India in October 2017 sent its first consignment of wheat to Afghanistan through Iran’s Chabahar port. Since there were challenges in activation of the 10-year contract, the foundation of an interim period contract was laid during the visit of President of Islamic Republic of Iran, Hassan Rouhani to New Delhi in February 2018. Resultantly, a formal short term Contract was signed in May 2018.


 In the year 2016, Prime Minister Modi visited Iran for a bilateral summit between India and Iran. It was for the first time since 15 years that an Indian Prime Minister visited Iran. The Governments of Iran and India signed a series of agreements. The agreement gave rights to India to develop and operate 2 terminals and 5 berths with the multipurpose cargo handling capacities for a period of 10 years to construct and alternative trade route between Central Asia and Afghanistan.
 A trilateral agreement was signed between India, Iran and Afghanistan. Prime Minister Modi, Iranian President Dr Hassan Rouhani and the President of Afghanistan inked an agreement for Trilateral Transport and Transit Corridor. Under this agreement, India's state-owned IRCON (Indian Railways Construction Ltd) agreed to provide assistance to the railway line project and promised to finance the project worth $1.6 billion.


 Iran's Stand: In July 2020, Iran decided to proceed with the rail line construction on its own, citing delays from the Indian side in beginning and funding the project. However the reason seems to be that the Iran and China are close to finalizing a 25-year strategic partnership. As per a document on 'Comprehensive Plan for Cooperation between Iran and China', both the countries will invest in infrastructure; manufacturing and upgrading energy and transport facilities; refurbishing ports, refineries and other installations; and will commit Iranian oil and gas supplies to China during that period. Also, Iran has proposed a tie-up between the Chinese-run Pakistani port at Gwadar and Chabahar. It has also offered interests to China in the Bandar-e-Jask port which is 350 km away from Chabahar and its duty-free zone.

 India's Stand: IRCON completed the site inspection and feasibility report, and had been waiting for the Iranian side to appoint a nodal authority. Although the project has secured a special waiver from the USA, India is hesitant to deal with the construction company which has links with the Islamic Revolutionary Guard Corps (IRGC) and is under the sanctions. The IRGC is a hard-line force which operates its own military infrastructure in parallel to Iran’s regular armed forces. In April 2020, it launched Iran’s first military satellite Noor. Fear of sanctions by the USA has also impacted Indian interest in the Farzad-B gas field project of Iran.


With the results of the USA elections, both India and Iran look for the possibile ease of sanctions allowing for increased engagements. India is also keeping an eye on the negotiations on a 25-year strategic cooperation agreement between China and Iran (worth USD 400 billion) which could fund other parts of the Chabahar development, including a free trade zone along the Makran coast, and oil infrastructure projects, impinging on India's strategic ties with Iran.


Q.1 Which of the following ports is a seaport located in Gulf of Oman, Iran & strategically important for India as well?

A. Gwadar Port
B. Hambantota Port
C. Chabahar Port: ANSWER
D. Trincomalee Port

Q.2 Gwadar Port which is the deepest sea port in the world, situated on the Arabian Sea in Balochistan province of Pakistan is developed by which of the following nations?

A. China: ANSWER
B. United States of America
C. Afghanistan
D. India

Q.3 Which of the following statements is/are incorrect about the advantages of the Chabahar Port?

A. Port plays an important role for Iran as well as for India.
B. India will be able to reach Afghanistan directly
C. It will act as a counter to Pakistan's Gwadar Port.
D. None of the above: ANSWER

Q.4 From the following options, Which of these are not correctly matched?

A. Chabahar Port: Iran
B. Gwadar Port: Pakistan
C. Hambantota Port: China: ANSWER
D. Sittwe Port: Myanmar

Q.5 In Recent times, which of the following countries has imposed toughest sanctions ever on Iran which can hamper the effort of India in Chabahar Port?

A. United Arab Emirates
B. Israel
C. China
D. United States of America: ANSWER