Signing of the Chabahar Port deal is being considered a 'landmark' in India-Iran economic relations.
The signing of the Chabahar Port deal is a "landmark" in India-Iran economic relations and it offers various future investment opportunities, including the development of subsequent phases of the facility, a top Iranian diplomat said in a note.
These opportunities include development of the second phase of Shahid Beheshti Port as well as the third and fourth phases on BOT model, among others, Davoud Rezaei Eskandari, Acting Consul General of Iran in Mumbai, said in the note shared with Press Trust of India.
India on May 13 signed a 10-year contract to operate the strategic Iranian port of Chabahar that will help it expand trade with Central Asia.
The Chabahar Port on the Gulf of Oman - which New Delhi had proposed to develop way back in 2003 - will provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor, bypassing Pakistan.
The long-term agreement was signed by Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran. It replaces an initial 2016 pact, which covered India's operations at Shahid Beheshti Terminal in Chabahar Port and had been renewed on an annual basis.
"India and Iran are important trade partners. India has been among Iran's five largest trade partners in recent years," Mr Eskandari said.
"The signing of the 10-year contract for equipping and operating general cargo and container terminals at First Development Phase of Shahid Beheshti Port of Chabahar is a landmark in India-Iran economic relations," he said.
As per the contract, India is committed to investing USD 120 million (through IPGL) for the necessary equipment and USD 250 million credit line for financing port development, taking the contract's total value to USD 370 million, he said in the note.
Also, the deal brings investment opportunities in petrochemical and related industries as well as in the construction of LNG and LPG export terminals; besides development of mini refineries and petrochemical plants, as per his note.
Chabahar Port, located outside the Strait of Hormuz, is the region's sole deep-water oceanic port, he said in the note adding that "it serves as India's vital conduit for accessing landlocked nations like Afghanistan and Central Asian countries".
Additionally, it offers an efficient and economical transit pathway for goods destined for Europe and serves as a pivotal stopover for vessels en route from India to the Persian Gulf and the Middle East, he noted.
At the same time, Chabahar Free Zone offers numerous benefits for foreign investors, including a 100 per cent ownership of companies by non-Iranian entities; waivers of custom duties, among others, he said.
Besides, there is exemption from customs duties for importing raw materials and industrial machinery and ore, flexible labour laws compared to mainland Iran, and enhanced banking services and easier foreign currency exchanges.
Petrochemical sector, mining, pharma, agriculture, automobile industries as well as infrastructure development, information and communication and tourism and hospitality are some of the areas that offer business opportunities in Iran, he said.
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