India developing Chabahar in Iran port for access to Central Asia

[cobra commando]

The decks have been cleared for India to lease and develop the strategically important Iranian port of Chabahar. This will provide an alternative route for India to trade with Afghanistan and Central Asia, bypassing Pakistan. The obstructions that the India- Iran agreement on the port had run into, after it was announced in May, got sorted last week during Iran Foreign Minister Javad Zarif’s visit, said Union Road Transport and Highways Minister Nitin Gadkari. “The Prime Minister has spoken to the Iran government…. and 8 to 10 days ago the Iranian Foreign Minister came and met me… we have solved the problem,” Mr. Gadkari said without divulging details. Under the Memorandum of Understanding, Chabahar port will be used to ship crude oil and urea, greatly reducing transportation costs for importing these two commodities. The port is to be developed via a special purpose vehicle, which will be owned by the two sides with an investment of around $85 million. A multi-purpose cargo and container terminal is to be developed at the port. India’s presence in Chabahar will offset the Chinese presence in the Pakistani port of Gwadar. It also takes advantage of the centuries- old connection with Iran, especially at a time when Iran’s economic sanctions are expected to be lifted, thanks to the nuclear deal it signed with the West. Weeks ahead of signing the MoU, the Iranian government had leased the port for upgradation to a private company, Aria Badaner. This put a question mark on the Indo-Iranian deal and caused alarm in Indian quarters as the agreement with Aria Badaner had taken place in March, while the MoU was signed in May between Mr. Gadkari and Iran’s Minister for Transport and Urban Development Dr. Abbas Ahmad Akhoundi.

Decks cleared for India’s role in Iranian port

 

[warrior monk]

Background
The recent visit by Indian Minister for Shipping and Road transport and Highway, Mr. Nitin Gadkari
saw India and Iran sign an inter-Governmental MoU regarding India’s participation in the long
delayed development of the Chabahar Port in Iran’s Sistan- Baluchistan Province.[1]
The proposal to develop the Iranian port was framed in 2003 in the Delhi Declaration;[2] however the
project failed to make any progress since then. Unlike the UN, the US had imposed specific
sanctions on the Iranian port development along with a host of other sanctions on the Iranian
shipping and shipbuilding industry.[3] This kept the cargo traffic to be more or less low making any
sizable investment in the port development in Iran a risky venture. Thus India’s wait and watch policy
made some economic sense. US pressure was another reason for India delaying its investment in
the port development.

Possible factors impacting India’s decision on Chabahar
The recent success in the nuclear negotiation between Iran and the P5 +1( US, Russia, UK, France,
China and Germany) which saw the signing of a framework agreement, leading to flurry of activities
from German,[4]Russian, [5] Chinese and even a few US companies [6]trying to capitalise on the
diplomatic breakthrough to benefit from the supposedly lucrative Iranian market. This finally seems
to have forced the Indian leadership to act.
In addition to this Indian offer to develop the Farzad B gas field, including swapping the field’s gas
with natural gas produced by other Iranian fields in Chabahar port, and construction of a pipeline to
take the surplus gas of the field to India; [7] was lately declined by Iran, [8] indicating India had to act
and act fast as Tehran now had better alternatives at its disposal and had no patience for India.[9]
The Indian Offer

As per the current deal India intends to lease two berths at Chabahar for 10 years. Following the
signing of the MoU, commercial contracts will soon be finalised to develop two berths as container
and multipurpose terminals. In the second phase, India will reportedly invest USD 110 million to
further upgrade and expand the port.

India has further implicitly attempted to sweeten the reengagement with Iran by signalling its
intention to diversify and intensify its engagements by proposing to invest in Iran’s petrochemical
complexes[10], agriculture [11] as well as in transport sector. [12]
Importance of Chabahar for India

The primary reason forwarded for the development of the port has been to open trade with
Afghanistan and Central Asian Republics as well as provide alternative trade routes to the Russia
and some Eastern European nations. The port is more important especially because of Pakistan’s
refusal to provide India access to Afghanistan and the region from its territory. It is also likely to boost
the current trade between India and the region which is negligible.
In addition to strategic and economic importance, the deal also has great symbolic significance for
bilateral relations as it would signify that India is committed to supporting a major infrastructure
project in Iran[13]

Reduced LNG Imports by India
With the developments in the nuclear negotiations, the outcome is likely to be a comprehensive deal
being signed between Iran and the P5+1. This will enable India and other countries to invest again in
the Iranian energy sector.

Considering the low non- oil trade between India and Iran and for the Indian investments to make
some good sense out of its investments at Chabahar, India should further pursue its case of
developing the Farzad Gas B field with Iran.
A major chunk of India’s gas imports are utilised in fertilizers[14] and due to unavailability of any gas
pipeline and low domestic production, gas is imported in liquefied form impacting the import bill.
India’s intension to invest in the Iranian petrochemical plants near Chabahar makes good economic
sense. Iran, having the second largest gas reserve in the world, is a gas surplus state thus making it
a good alternative. Urea and other fertilizers can be produced and imported at a much cheaper price
than importing gas in a liquefied form. This can be done using the Chabahar port.
Impact on Regional Trade

The Indian non- oil trade to Iran in 2014-15(April- Feb) amounted to approximately US$ 3 billion
worth of exports or 1.35% of its entire exports[15] where as its imports comprised of approximately
US$ 8.8 billion or 2.13% of its total imports.[16] The export to Central Asia was a meagre US$
549.16 million[17] and the imports amounted to approximately US$754.42 million.[18] The nonmilitary
and non- energy trade with Russia saw exports worth US$ 1.8 billion and imports worth US$
3.85 billion.[19] Afghanistan imported goods worth US$ 389 million and exported US$ 245.09 million.
[20] From the data it is clear that India’s trade with the region at large is low, connectivity for the
movement of goods being one of the main concerns. The development of Chabahar coupled with the
proposed North- South transport corridor will in all certainty boost trade with the region.
Boost for Indian Port Authorities for overseas ventures

Chabahar is the first foreign port being developed by India through Jawaharlal Nehru Port Trust and
Kandla Port Trust and should seize the opportunity to at least makes a beginning on the global stage,
which can be leveraged for a larger role later on.[21] Globally, government-owned ports are seeking
investment opportunities overseas to forge stronger commercial links between maritime regions that
have the potential to generate cargo for their own ports. So, clearly, the aim is to attract more cargo.

Conclusion
Chabahar is an important string in the Indian economic and strategic ventures in Afghanistan and
Central Asia. It will thus enable India to benefit from its investments already made in Afghanistan and
those that it intends to make in the coming years. It also comes with a host of other opportunities in a
variety of areas which the Indian decision makers certainly seem to have taken into consideration
along with the decision on Chabahar.

indianarmy.nic.in/WriteReadData/Documents/claws22052015.pdf

 

[warrior monk]

Khatami’s January 2003 visit to India and the signing of the “Road Map to StrategicCooperation,” India has agreed to assist Iran in constructing the Chabahar portand road links between Iran,
Afghanistan, and northward toTajikistan. According to Iranian officials,a transit route will be established that will
run from Iran through Herat in western Afghanistan and Mazar-e Sharif and Sherkhan Bandar in northern
Afghanistan to Tajikistan, and from there up to China. In its efforts, Iran has a partial upper hand over Pakistan due to its warmer relations with the Central Asian states, particularly with Afghanistan

 

[pmaitra]

@warrior monk, please do not open new threads when threads already exist. Use existing thread.

 

[rock127]

Is there any planned visit by PM to Iran?

Below is news about last year Iran Foreign Minister to India.

India a strategic partner: Iran FM to Indian PM

In a meeting with Indian Prime Minister Narendra Modi in the Indian capital on Friday, Iranian Foreign Minister Javad Zarif said Iran considered India its “strategic partner and cannot forget the support India extended to Iran during its difficult times”, said an official Indian statement.

Modi affirmed India’s commitment to work with Tehran for the development of the Chabahar Port.India has pledged to invest about $85 million in developing the strategic port, located on Iran’s southeastern coast, which would provide India a sea-land access route to Afghanistan and other central Asian countries.

“We both, India and Iran, are eager to engage in this. I believe sooner rather than later we will start serious work,” Javad Zarif told reporters on Friday.

Zarif is the first key minister of Iran to meet Indian leaders in New Delhi after the historic nuclear pact between Tehran and Western countries in July which is expected to lead to the eventual lifting of sanctions against Iran.India is keen to be the first country to benefit from the deal in Asia.

Closer Iran-India ties would allow New Delhi’s leaders to secure cheaper energy imports to bolster economic growth.Zarif also met his Indian counterpart Sushma Swaraj on Friday when the two sides discussed bilateral issues.Indian leader Modi had held talks with Iran’s President Hassan Rouhani on the sidelines of the BRICS Summit in the Russian city of Ufa last month.

In his meeting with the visiting Foreign Minister, Modi reiterated that India attached high priority to its relations with Iran.During his meeting with Modi, Rouhani had sought Indian investments of nearly $8billion in the infrastructure sector in Iran, for ports, railways and airports.

The Prime Minister also congratulated Iran for reaching an agreement with P5+1 countries and expressed confidence that it would contribute to greater peace and stability in the region.

Modi also “conveyed India’s commitment to work with Iran for development of the Chabahar Port that would have far reaching benefit, not only for the people of India and Iran, but also for Afghanistan and the entire Central Asia region,” a statement from the Prime Minister’s office said.

 

[warrior monk]

@warrior monk, please do not open new threads when threads already exist. Use existing thread.

Thanks , my mistake .
30 characterrrrrrrrrrrrrrrrrrrr.

 

[cobra commando]

Cabinet clears $150 million Chabahar port project

NEW DELHI: The government today cleared the $150 million project to develop the Chabahar port in Iran, which would give India a sea-land access route to Afghanistan bypassing Pakistan. The Cabinet, chaired by Prime Minister Narendra Modi, today cleared the proposal to develop the Chabahar port in Iran with a project cost of $150 million, sources said. The strategic port, which is located off Iran's south eastern coast will provide India a sea-land access route to Afghanistan bypassing Pakistan. In May last year, Shipping Minister Nitin Gadkari had visited Tehran where India and Iran signed a pact to develop the Chabahar port. After the MoU for development and operation of two terminals at Chabahar Port, discussions were on for concluding the agreements which include possibility of India taking over the development and operation of Phase II of Chabahar Port.

Cabinet clears $150 million Chabahar port project

 

[Hari Sud]

Chabahar port development and its rail/road connections via Iran to Central Asia are ten years away. To Afghanistan, a bit sooner but peace must be established first. Gawadar has no goods business at all except the port is built to take the goods over the Himalyas to far flung China including oil. It is long try but just to please Pakistan, Chinese built it. Sea route is the best route. Gawadar is an alternative but not very viable alternative. Imagine oil to be pumped over from sea level to 17,000 feet and then taken to China in -30 degrees. All this a far cry and Pakistani propaganda. It took Americans eleven years to pump oil in Alaska for only 600 miles. It will be far cry for Pakistanis and Chinese.

So do not sweat on Gawadar port. Moreover Baloch rebels can render it ineffective in no time.

 

[I_PLAY_BAD]

Cabinet clears $150 million Chabahar port project

NEW DELHI: The government today cleared the $150 million project to develop the Chabahar port in Iran, which would give India a sea-land access route to Afghanistan bypassing Pakistan. The Cabinet, chaired by Prime Minister Narendra Modi, today cleared the proposal to develop the Chabahar port in Iran with a project cost of $150 million, sources said. The strategic port, which is located off Iran's south eastern coast will provide India a sea-land access route to Afghanistan bypassing Pakistan. In May last year, Shipping Minister Nitin Gadkari had visited Tehran where India and Iran signed a pact to develop the Chabahar port. After the MoU for development and operation of two terminals at Chabahar Port, discussions were on for concluding the agreements which include possibility of India taking over the development and operation of Phase II of Chabahar Port.

Cabinet clears $150 million Chabahar port project

Dead slow by GoI. They should be lightning fast in executing their decisions if at all we get to stand a chance against China.

 

[Hari Sud]

Dead slow by GoI. They should be lightning fast in executing their decisions if at all we get to stand a chance against China.

Once complete then go where.The rail and road structure to Central Asia is not developed. As I said before, building it for little bit of goods traffic to Afghanistan is not an economic way to build. Peace is needed to operate mines in Afghanistan and ship the ore elsewhere. Central Asia need to connect rail line to the existing Iranian rail lines which are totally uncared for. Until then, the port is there but of little value. That is what is happening at Gawadar, although Chinese tend to ship goods over the Himalayas to China - fat cry. Chinese came under a lot of Pakistani pressure to build Gawadar. It's economic importance as trans shipment point is very little.

 

[Bahamut]

It is a very good idea but do not see any media except DD doing coverage of it .

 

[datguy79]

Chabahar port development and its rail/road connections via Iran to Central Asia are ten years away. To Afghanistan, a bit sooner but peace must be established first. Gawadar has no goods business at all except the port is built to take the goods over the Himalyas to far flung China including oil. It is long try but just to please Pakistan, Chinese built it. Sea route is the best route. Gawadar is an alternative but not very viable alternative. Imagine oil to be pumped over from sea level to 17,000 feet and then taken to China in -30 degrees. All this a far cry and Pakistani propaganda. It took Americans eleven years to pump oil in Alaska for only 600 miles. It will be far cry for Pakistanis and Chinese.

So do not sweat on Gawadar port. Moreover Baloch rebels can render it ineffective in no time.

Not true. The railroad between Iran and China through Central Asia became operational this month.

 

[LETHALFORCE]

Japan may partner India in developing Iran's Chabahar port

http://timesofindia.indiatimes.com/...-Irans-Chabahar-port/articleshow/52274100.cms

 

[3deffect]

JAPAN MAY PARTNER WITH INDIA TO DEVELOP IRAN'S CHABAHAR PORT
SUNDAY, MAY 15, 2016

NEW DELHI: In a likely beefing up of India's ambitions in Afghanistan and Central Asia, Japan is reported to be considering partnering India in developing the strategically located Chabahar port project in Iran, which is seen as a counterweight to China's presence at Gwadar in Pakistan's Baluchistan province.
PM Narendra Modi is visiting Iran later this month and both countries are hoping to sign a commercial contract for the Chabahar port as well as modalities for India extending a $150 million line of credit for the project. The port located in southeastern Iran is expected to act as a gateway for India not just to Afghanistan but to the whole of Central Asia, allowing India to sidestep Pakistan.
While diplomatic sources here said "nothing concrete had been decided" yet, this is not the first time Tokyo is reported to have shown interest in Chabahar. Its ambassador to Iran Koji Haneda had last year, before the international sanctions on Iran were lifted, had visited the port city on the Gulf of Oman and spoken about how the project could turn into a global trade hub.
Apart from looking at developing the port jointly with India, Japan is also said to be considering building an industrial complex in Chabahar. In what will be a first in almost 38 years, Japan PM Shinzo Abe is expected to visit Iran in August this year. The visit is likely to see Japan announcing investments into some major infrastructure projects in Iran.
An India-Japan partnership on developing the Chabahar port and industrial complex, according to strategic affairs expert Brahma Chellaney, will be a win-win initiative for all parties, including Iran.
"Chabahar has greater potential than Gwadar to emerge as a key shipping hub. An India-Japan partnership on Chabahar will help to counter the strategic significance of the expanding Chinese footprint in Gwadar," he says.
In the face of a renewed talk about strategic encirclement of India by China, as it gets operational control of Gwadar port and possibly also of Hambantota in the future, any involvement of Japan, an important strategic partner, in Chabahar will only reinforce India's own belief in the project. There are few strategic partners with which India shares a broader convergence of political, economic and strategic goals than Japan.
In fact, any likely partnership between India and Japan on Chabahar could also be explained by the joint statement issued by the two countries after the visit of Abe last year in December. It said that Modi and Abe had decided to develop and strengthen "reliable, sustainable and resilient infrastructures that augment connectivity within India and between India and other countries in the region".
The partnership with Japan may be significant also in the context of reports that China itself is looking to park itself in Chabahar by building an industrial town there.
India is now hoping to soon sign a draft agreement which envisions trilateral cooperation for providing alternative access to seas to Afghanistan through Chabahar and facilitate its own trade with Afghanistan. "When the Agreement comes into force it will significantly enhance utilization of Chabahar Port, contribute to economic growth of Afghanistan, and facilitate better regional connectivity, including between India and connections to Afghanistan and Central Asia," the government said last month.

 

[sayareakd]

Two things are important, first and foremost our direct and uninterpreted access Afghanistan and the second if we can somehow use the same route deliver supplies to NATO (as the delivery agent) thus Iran getting transaction fee and we getting delivery fee.

 

[Indx TechStyle]

Two things are important, first and foremost our direct and uninterpreted access Afghanistan and the second if we can somehow use the same route deliver supplies to NATO (as the delivery agent) thus Iran getting transaction fee and we getting delivery fee.

Our exports have been continuously falling from last year.
Can this route for delivering our products to Central Asia and Russia can revive that?

 

[ezsasa]

Our exports have been continuously falling from last year.
Can this route for delivering our products to Central Asia and Russia can revive that?

Exports have fallen, not because we are not producing but rather other counties have lesser demand. I have been watching Korea Japan and Singapore channels now a days, from what I gather they are in a bad shape.

As far as Central Asia is concerned, Chinese already have a railway line(direct access being immediate neighbours) and we don't. It would be tough to beat Chinese on prices.

 

[Indx TechStyle]

Exports have fallen, not because we are not producing but rather other counties have lesser demand. I have been watching Korea Japan and Singapore channels now a days, from what I gather they are in a bad shape.

As far as Central Asia is concerned, Chinese already have a railway line(direct access being immediate neighbours) and we don't. It would be tough to beat Chinese on prices.

I mean at least just preventing exports from falling. Can it be done?

 

[ezsasa]

I mean at least just preventing exports from falling. Can it be done?

Assuming we are still talking about CIS countries, next fiscal will be same as current fiscal. Situation is likely to change only one year after afghan railway line project is complete. Assuming railway line gets completed in the current fiscal and one more year to establish a continuous supply line, only then we can expect change in status quo. but this is only half the story.

i just checked two counties Kyrgyzstan and Kazakhstan, GDP growth rate for the last quarter is -4.9 and -.2. like i said in my previous post, many countries are having a tough time. Their ability to imports goods has reduced considerably. Until the world gets back on its feet, we might see this downward trend continuing.

Silver lining is, by the time world economy is better we should be ready to meet the demand via the current policy changes and infrastructure development.

 

[curryman]

Japan may partner India in developing Iran's Chabahar port

http://timesofindia.indiatimes.com/...-Irans-Chabahar-port/articleshow/52274100.cms

This is excellent news. I hope more countries come on board and see the value of building this port and establish links to CARs.