US sounds caution as India inks port deal with Iran

It will impart significant strategic leverage to India giving it access to Afghanistan

In a deal of significant strategic importance, India and Iran on Wednesday signed an inter-Governmental Memorandum of Understanding (MoU) regarding India’s participation in the development of the Chabahar Port in Iran. This was signed by Abbas Ahmad Akhoundi, Minister for Transport and Urban Development of Iran, and Nitin Gadkari, Union Road Transport and Highways Minister, during his visit to 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 Ministry of External Affairs said in a statement.

Cautioned against rush

To a question on the deal, Richard Verma, U.S. Ambassador in India, cautioned against “rushing in” with investments as the nuclear deal being negotiated was not final and said there was need “to maintain the international solidarity that has brought this hard fought diplomatic victory, but we are not over the finish line yet.”

Reduces transit time

Chabahar which is located close to the strategic Persian Gulf will impart significant strategic leverage to India giving it access to Afghanistan and to the energy-rich Central Asia bypassing Pakistan. It also cuts down transit time by a third accruing significant time and cost savings.

India, which has invested over $2 billion in Afghanistan, plans to link the Chabahar port with the Zaranj-Delaram road, the garland highway, India built in Afghanistan by upgrading the Chabahar-Milak road opening alternative access to sea port for Afghanistan’s connectivity to regional and global markets. India has already committed $100 million to develop the port.

Mr. Gadkari had earlier said: “We will complete the port in about one-and-a-half years... The distance between Chabahar and Gujarat is less than Delhi and Mumbai.”

The Chabahar deal has been long pending due to U.S. pressure on India in light of the severe sanctions imposed on Iran.