Tehran and New Delhi are expected to sign a long-term deal for the development of Iran’s Chabahar Port by September before the Global Maritime India Summit 2023 scheduled to be held in New Delhi in October, two people familiar with the matter stated.

An official of the ports ministry said the contours of the long-term deal will be finalized next month, and an agreement will likely be signed in September.

Currently, India and Iran sign one-year contract extensions for developing and running the terminal at Chabahar Port.

However, India has been urging Tehran to commit to a longer-term pact, providing certainty for investment and development plans for the port designed by India. A long-term contract for 10 years may also provide for automatic renewal.

In 2016, India committed $85 million for the development of the port, along with a $150 million line of credit. As of 2023, India has supplied six gantry cranes to the tune of $25 million for the development of the port, Livemint.com reported.

Chabahar, located in southeastern Iran, was envisioned as a gateway for India to access Central Asian markets.

However, the initiative faced obstacles due to Western sanctions against Iran. In 2013, India pledged $100 million to develop the port, but matters progressed after the 2015 nuclear deal was struck between Iran and the permanent members of the UN Security Council plus Germany.

Also, an agreement was signed between Indian Railways’ IRCON unit and Iranian Railways’ Construction and Development of Transportation Infrastructures Company in 2016 to construct the Chabahar-Zahedan Railway project.

By Tasnim