Iran and India overcome key hurdle for Chabahar’s INSTC port operation

Image: ANP/AFP. Atta Kenare

Iran and India have signed an agreement that will enable the purchase of cargo handling equipment for the port of Chabahar. The port, located in the south of Iran and a key node of the International North-South Transport Corridor (INSTC), is operated by India. The question of cargo handling equipment has stalled operations at the port for years.

As part of the current deal, Iran will purchase the necessary equipment for operations at the port. India will then refund the Iranian expenses. In total, India will spend 120 million dollars on equipment.

It took the two countries six years to come to an agreement. India failed to purchase the required equipment earlier because suppliers were wary of conducting business with heavily-sanctioned Iran. The US has already reacted negatively to India’s intention to go ahead with the port, warning of the “potential risk of sanctions”.

A gateway for India

Iran is building a 700-kilometre railway that will connect the port to the country’s railway network at the city of Zahedan. Such a connection could boost the attractiveness of freight transportation through the port and along the INSTC, for which the port will be an end point.

The port of Chabahar is an important infrastructure node for India. It stands to profit from the rail connection that is under construction, because the country will gain direct rail access to Central Asia, Russia and Europe while bypassing its rival Pakistan. Since 2003, it has spent over 100 million dollars on the construction of the port.

Iran will also benefit from the port, as it grows Iran’s role as an important transit hub for goods travelling along the INSTC. Additionally, the country expects an improvement in relations with India as the countries cooperate towards a common interest.

Image: Shutterstock/Peter Hermes Furian.

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Iran and India overcome key hurdle for Chabahar’s INSTC port operation | RailFreight.com

Iran and India overcome key hurdle for Chabahar’s INSTC port operation

Image: ANP/AFP. Atta Kenare

Iran and India have signed an agreement that will enable the purchase of cargo handling equipment for the port of Chabahar. The port, located in the south of Iran and a key node of the International North-South Transport Corridor (INSTC), is operated by India. The question of cargo handling equipment has stalled operations at the port for years.

As part of the current deal, Iran will purchase the necessary equipment for operations at the port. India will then refund the Iranian expenses. In total, India will spend 120 million dollars on equipment.

It took the two countries six years to come to an agreement. India failed to purchase the required equipment earlier because suppliers were wary of conducting business with heavily-sanctioned Iran. The US has already reacted negatively to India’s intention to go ahead with the port, warning of the “potential risk of sanctions”.

A gateway for India

Iran is building a 700-kilometre railway that will connect the port to the country’s railway network at the city of Zahedan. Such a connection could boost the attractiveness of freight transportation through the port and along the INSTC, for which the port will be an end point.

The port of Chabahar is an important infrastructure node for India. It stands to profit from the rail connection that is under construction, because the country will gain direct rail access to Central Asia, Russia and Europe while bypassing its rival Pakistan. Since 2003, it has spent over 100 million dollars on the construction of the port.

Iran will also benefit from the port, as it grows Iran’s role as an important transit hub for goods travelling along the INSTC. Additionally, the country expects an improvement in relations with India as the countries cooperate towards a common interest.

Image: Shutterstock/Peter Hermes Furian.

Also read:

You just read one of our premium articles free of charge

Want full access? Take advantage of our exclusive offer

See the offer

Author: Dennis van der Laan

Add your comment

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