India okays Chabahar port project in Iran

New Delhi, February 24

India on Wednesday approved a $150 million credit line for the development of Iran’s Chabahar port.

The port in southeast Iran is central to New Delhi’s efforts to circumvent arch-rival Pakistan and open up a route to Afghanistan, where it has developed close security ties and economic interests.

Under the agreement signed last year between the two countries, India will equip and operate two berths in the first phase of development at Chabahar Port and extend a credit line of $150 million through its external lending arm. Both berths will commence operations within 18 months of the signing of a final contract.

India will make a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease following which the ownership of equipment will be transferred to Iran.

New Delhi and Tehran agreed in 2003 to develop Chabahar on the Gulf of Oman, near Iran’s border with Pakistan, but the venture has made little progress because of the sanctions over Iran’s atomic programme. Western nations last month lifted some of those sanctions.

The Cabinet also authorised the Shipping Ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities. 

As per the per the pact, operation of two berths will commence within a period of maximum 18 months after the signing of the contract.

Among other significant clearances by the Cabinet today was the approval of an “agreement between India and Maldives for avoidance of double taxation on income from international air transport” and an “arrangement for the establishment of an Indo-French joint committee on science and technology cooperation”. TNS/agencies