This Article is From Feb 06, 2017

Blog From Iran: PM Modi Cinches Game-Changer Deal On Chabahar Port

Prime Minister Narendra Modi's trip to Iran is historic - for the first time in over a decade, an Indian premier has travelled to the oil-rich country.  A huge deal has been scored - with nearly 500 million dollars as the first big investment, India will develop the Chabahar port, located just 60 miles from Pakistan's Gwadar port, which is being modernized by China.

The collaboration on Chabahar, on Iran's southern coast, was first agreed on 13 years ago. But sanctions over Iran's nuclear programme, lifted only recently, meant a long wait for India to get what it needs - a foothold in Iran and much easier access to central Asia and Afghanistan.

Three contracts were signed today with Prime Minister Modi and President Rouhani in Tehran for the first phase of the port's development, which include a 400 million dollar agreement for India to help build a crucial railway line in the region. Road and rail links are to be built so that landlocked Afghanistan can get access to the Iranian port as an alternate to the Pakistani port of Karachi. A major highway connecting parts of Afghanistan to Chabahar has already been built by India.

Shipping and Transport Minister Nitin Gadkari, who is accompanying Prime Minister Modi, claimed the distance from Mumbai to Delhi is greater than that from Chabahar to Kandla port in Gujarat. He added that the low power and fuel costs in Iran will be attractive to Indian companies whether they want to trade in the region, or supply steel, urea or aluminum  to Indian markets. To that end, state-run NALCO has signed a memorandum of understanding to smelter or extract .5 million tonnes of aluminum from bauxite ore at Chabahar's Free Trade Zone.

The highlight of the day is the formal agreement between India, Iran and Afghanistan  for a trade and transport corridor that will have Chabahar as the hub.

President Rouhani underscored what's evident on the streets of Tehran to the visitor's eye - a desire for the Persian country, emerging from decades of sanctions and international pariah status, to forge an economic road ahead for itself.

Tehran has become a  major destination for several world leaders looking to get in on a piece of the pie that Iran is now offering. From consumer goods to automobiles, from big industry and infrastructure projects to banking, every part of Iran's economy is wide open.

In fact, some analysts suggest that Tehran's disappointment with India over the last decade with Delhi's vote against Iran at the nuclear watchdog IAEA  and its pro-West stance on the nuclear issue have still not faded completely. Mustafa Zahrani, the Director General of the Institute for Political and International Studies, a foreign ministry-funded think tank here, told NDTV that many big powers are looking at partnering with Tehran for their own interests, but India has been wise to move quickly on Chabahar.

(Maya Mirchandani is Senior Editor, Foreign Affairs - NDTV)

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