Located in Iran’s Sistan-Baluchistan province on the southern coast, Chabahar Port has been in development since 2016 by India and Iran to boost connectivity and trade ties. Strategically important for both countries, Chabahar Port has been the focal point of the Indo-Iran equation in recent years, but progress on the project remained sluggish as India shied away from development after Washington upped sanctions on Tehran following the US withdrawal from the Iran deal — even though Chabahar was exempt from sanctions — and also because of the lack of a long-term plan.
While visiting Tehran in mid-January, India's external affairs minister, Subrahmanyam Jaishankar, finally inked a long-term deal to develop Chabahar Port with Iran's minister for urban development, Mehrdad Bazrpash. Replacing the existing contract reached between India Ports Global Ltd (IPGL) and Arya Banader of Iran in 2016, this final agreement materialized after years of negotiations.
New Delhi had been urging Tehran to commit to a longer agreement to provide more certainty for potential investors, but Tehran was uncomfortable about an arbitration clause in the original 2016 deal that stipulated disputes would be taken to foreign courts.
Ashok Swain, professor of peace and conflict research at Uppsala University in Sweden, told Al-Monitor that Jaishankar's talks in Tehran "also covered perspectives on the International North-South Transport Corridor (INSTC), emphasizing the strategic and economic significance of this collaboration between India and Iran.”
