(Diya TV) — India on Monday will sign a commercial contract with Iran to build and run a port on Iran’s southern coast, the Indian government announced last week, in an effort to help both nations gain an upper hand in winning access to Asia and Afghanistan.

The talks to build the Chabahar port have existed for years but since the scaling back of Western sanctions against Iran, India has amped up efforts to ensure they don’t lose to China, who are looking to invest themselves.

The nations will develop a port which features two terminals and cargo berths at Chabahar, on the Gulf of Oman. The deal was signed by Prime Minister Narendra Modi during his visit to Iran on Sunday. Gopal Baglay, a foreign ministry official, said India would make an initial investment more than $200 million in the port, with India’s Exim Bank providing a $150 million line of credit.

“The focus of the trip is connectivity and infrastructure,” he told reporters.

Currently, India is blocked from land access to Afghanistan and central Asia countries because of opposition from Pakistan, whom view India’s efforts of diplomacy in the region as a threat. Baglay added that India, Afghanistan and Iran would separately sign an agreement to establish a trade and transportation corridor during Modi’s trip, with Chabahar serving as the hub.

Additionally, road and rail links will be built so that the landlocked Afghanistan may have access to the port as an alternate to the Pakistani port of Karachi.


“The trilateral agreement will be a game changer for regional connectivity especially for Afghanistan which can find an assured and reliable alternate access to India via sea,” Baglay said.

Chabahar sits roughly 60 miles away from Pakistan’s Gwadar seaport which China is developing as part of a $46 billion China-Pakistan Economic Corridor. The Chinese project saw top investments come from Sri Lanka, Bangladesh and the Maldives.

“A major flaw in India’s current policy toward Iran has been the lack of implementation of signed agreements,” said Meena Singh Roy, an expert on India’s ties with Iran at the Institute for Defence Studies and Analyses.