India and Iran’s 10-year deal; New Delhi’s plans bypass Islamabad

After years of negotiation, India signed a long-term contract with Iran. This agreement allows India to equip and operate the Chabahar port at a significant cost as part of its commercial plans to create alternative trade routes. Sarbananda Sonowal, India’s Minister of Shipping, despite election timing restrictions, was exempted by the Election Commission of India […]

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After years of negotiation, India signed a long-term contract with Iran. This agreement allows India to equip and operate the Chabahar port at a significant cost as part of its commercial plans to create alternative trade routes.

Sarbananda Sonowal, India’s Minister of Shipping, despite election timing restrictions, was exempted by the Election Commission of India to travel to Tehran on Monday, May 12, and signed an agreement with Mehrdad Bazrpash, Iran’s Minister of Road and Urban Development, which the two countries had been negotiating for years.

Hours after signing the agreement, India’s Minister of Shipping shared a photo on the social network X, calling it a “historic moment” for India and added that “this agreement not only strengthens the ties between the two great countries but also is a solid step for India in the global supply chain and maritime sector.”

The business-standard journal about the importance of this agreement and the strategic location of the Chabahar port states that the port, located at the mouth of the Gulf of Oman, provides India with an alternative route for trade with Afghanistan and Central Asia, especially since Pakistan has deprived India of land access to these regions.

Chabahar port, described as “strategic” in its location in southeast Iran, has been developed with India’s cooperation and is also part of the International North-South Transport Corridor (INSTC), reported as a multi-modal transport route. This port connects the Indian Ocean and the Persian Gulf through Iran to the Caspian Sea and via St. Petersburg, Russia to Northern Europe.

In recent years, under the leadership of Narendra Modi, India’s Prime Minister, the country has signed long-term trade agreements with nations worldwide, including the European Union. The latest instance (a ten-year agreement with Iran to use Chabahar port) brings numerous opportunities for India.

Reports indicate that the Chabahar port is seen as a gateway to unlocking India’s trade potential with European countries, as it provides a shorter route to Europe. Also, managing this port gives India the ability to access Afghanistan and Central Asian countries, which previously had limited and land-restricted connectivity through Pakistan.

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