Namita Barthwal
On May 13, Indian Ports Global Ltd. (IPGL) and the Port and Maritime Organization (PMO) of Iran signed a 10-year agreement to operate the Shahid-Behesti terminal of the Chabahar port. This agreement is part of a four-phase development program that began in 2016. Under the new agreement, IPGL will invest $120 million in the terminal’s infrastructure development. Additionally, India has agreed on a $250 million credit line to further develop the Iranian port. The signing ceremony was attended by India’s minister of shipping and waterways, Sarbananda Sonowal, who reiterated Chabahar’s strategic importance in connecting India with Afghanistan and Central Asian countries.
However, this development was quickly overshadowed by a warning from the U.S. State Department, which raised concerns about potential sanctions risks for IPGL. In response, India has taken a diplomatic route to deter the United States from imposing sanctions stemming from the 2012 Iran Freedom Counterproliferation Act (IFCA) on IPGL, a Public Sector Undertaking (PSU). Previously, Indian PSUs have received exemptions from Washington under the IFCA for their engagements with Iran, including importing oil from the country and developing Chabahar port, considering its regional significance.
India has four reasons for building the Shahid-Behesti terminal of the Chabahar port. First, it has established a direct trade route from India to Afghanistan and Central Asia, bypassing Pakistan. On October 29, 2017, the first shipment of wheat from India to Afghanistan via Chabahar port marked the terminal’s operational status.
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