Iran has inked a USD 370 mn 10-year contract with India to manage and develop Chabahar port, Reuters reports. The agreement was signed between Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran.

The details: IPGL will invest nearly USD 120 mn into the project with an additional USD 250 mn in financing on offer, Iranian Minister of Roads and Urban Development Mehrdad Bazrpash said.

IPGL has history in Chabahar: IPGL has been operating the port since late 2018, handling over 90k TEUs and over 8.4 mn tonnes of bulk and general cargo, an Indian government official said. A total of 2.5 mn tonnes of wheat and 2k tonnes of pulses have been shipped from India to Afghanistan through Chabahar Port, the official added.

The contract has been brewing: Iran and India have been holding talks on investments at Chabahar Port since late 2023, and were reportedly close to reaching an agreement in mid-January after working out most contractual issues. Proposals at the time were for self-renewing 10-year contact that would also see India shell out USD 25 mn in investments at the port.

Why is this important? India has been developing the port in a bid to secure a gateway for trade with Iran, Afghanistan, and Central Asia while bypassing the ports of regional rival Pakistan in Gwadar and Karachi, the newswire writes.

US sanctions have been delaying the development of the port, Reuters writes. “Any entity, anyone considering business deals with Iran – they need to be aware of the potential risks that they are opening themselves up to and the potential risk of sanctions,” US State Department deputy spokesperson Vedant Patel told reporters when asked for comment on the inked agreement.

Other countries are eyeing the port: The landlocked state of Tajikistan has also expressed interest in Chabahar, with Tajik investors looking to leverage the port for transit trade via a logistics compound at the facility. Afghanistan was also looking to pump USD 35 mn in investments at the port in late February.

Tags: