India will push ahead this week with plans to build a port in southeast Iran, two sources said, with Prime Minister Narendra Modi keen to develop trade ties with Central Asia and prepared to fend off US pressure not to rush into any deals with Iran.
India and Iran agreed in 2003 to develop a port at Chabahar on the Gulf of Oman, near Iran's border with Pakistan, but the venture has made little progress because of Western sanctions on Iran.
Now, spurred on by Chinese President Xi Jinping's signing of energy and infrastructure agreements with Pakistan worth $46 billion, PM Modi wants to swiftly sign trade deals with Iran and other Gulf countries.
"Shipping Minister Nitin Gadkari will travel on a day-long tour to Iran to sign a memorandum of understanding for development of Chabahar port," a shipping ministry source with direct knowledge of the matter told Reuters. The deal will be signed on Wednesday, he said. India's cabinet approved the plan to develop Chabahar port last year.
Encouraged by the prospect of a deal between world powers and Tehran by June 30 on Iran's nuclear programme, after which sanctions could be eased, India recently sent a delegation to Iran to scout for trade, energy and infrastructure deals.
The United States cautioned India and others last week against strengthening ties with Iran ahead of a final agreement. But Indian officials said New Delhi could not ignore its national interest and noted a report that a US energy delegation was visiting Iran.
"We don't want to miss this opportunity and will move as expeditiously as possible," the shipping ministry source said.
India wants to build the port as it would cut transport costs and freight time to Central Asia and the Gulf by about a third.
The port is also central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.
India has already spent about $100 million to construct a 10-mile road in western Afghanistan to link up with Chabahar port.
Last week, PM Modi assured Afghan President Ashraf Ghani of India's commitment to building the port.
Chabahar is just along the coast from Gwadar port in Pakistan that is being developed with China's help, said Robin Mills, head of consulting at Dubai-based Manaar Energy. "So there is a strategic element for the Indian side".