Sponsored By

India signs off $150m credit for Iranian port development

India’s government today cleared $150m of Exim Bank credit to further develop the Iranian Port of Chabahar, in the Gulf of Oman.

Seatrade Maritime

February 25, 2016

1 Min Read
Kalyakan - stock.adobe.com

The agreement pertains to a Memorandum of Understanding (MOU) signed by Shipping Minister Nitin Gadkari in May 2015, two months before Iran struck a deal with the West to reduce its nuclear capabilities.

Under the MOU, India will invest $85m to develop two berths at Chabahar Port Phase 1, leasing them for 10 years at $22.95m per year. Ownership of Indian-supplied equipment will transfer to Iran once the lease period is over.

Partially developed by India in the 1990s, Chabahar’s strategic location, situated in a designated free-trade zone, would allow India to trade with Iran’s landlocked neighbour Afghanistan while bypassing Pakistan, with which it has a difficult relationship.

The MOU stipulates that the new berths enter operation no later than 18 months after the signing of the contract.

Much delayed, the agreement follows drawn-out negotiations over the price of Gas imports to India from Iran. Crude oil trades with India, which incorporated a rupee-based payment mechanism to circumvent Western sanctions, has been a crucial revenue stream for the country, second only to China.

Iran, meanwhile, will be in a stronger position as an exporter with the relief of Western sanctions. Four of the first tankers of Iranian Crude are currently heading to European ports, loaded at the Kharg Island terminal off south-west Iran.

Read more about:

India

About the Author

Seatrade Maritime

Our news reporters and editors draw on over 40 years experience of covering the maritime and shipping industries and bringing you the latest news and insights.

Get the latest maritime news, analysis and more delivered to your inbox
Join 12,000+ members of the maritime community

You May Also Like