The governments of India and Iran announced a decade-long agreement on Tuesday that would give India control and allow it to develop the port of Chabahar, a stop on the Gulf of Oman that offers India a favorable route to the Persian Gulf.
“Chabahar Port’s significance transcends its role as a mere conduit between India and Iran; it serves as a vital trade artery connecting India with Afghanistan and Central Asian Countries,” Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowald said on Tuesday, signing the agreement in Iran. “This linkage has unlocked new avenues for trade and fortified supply chain resilience across the region.”
The deal may run afoul of the dozens of American sanctions on the Iranian regime, the world’s foremost state sponsor of terrorism, the State Department warned on Tuesday.
India and Iran are allies through the BRICS coalition, which includes many of the world’s most formidable rogue states. Along with Iran and India, BRICS unites Russia, China, Brazil, and South Africa – the original members of the alliance – along with newly minted members Ethiopia, Egypt, and the United Arab Emirates (UAE). Saudi Arabia accepted an invitation to join BRICS in late 2023 but as of February had reportedly not completed the paperwork to be a full member.
The introduction of Iran, a longtime Chinese and Russian ally, to BRICS brought the alliance more directly into the sphere of the ongoing conflict in the Middle East prompted by the unprecedented siege of Israel on October 7 by Iran-backed jihadist organization Hamas. India has been the most reluctant of the BRICS nations to support the Hamas cause, however, openly expressing support for Israel following the October 7 atrocities.
India has attempted to retain trade ties to Iran, though it has recently significantly limited commercial interactions in response to American and global sanctions on Iran’s Islamist regime. The Chabahar port agreement appears to be an attempt to reverse the momentum.
According to the Iranian state propaganda outlet PressTV, the agreement will give the company India Ports Global Ltd (IPGL) control of freight and container terminals of Chabahar’s largest port. India will control the port for ten years in exchange for spending “$120 million for the supply of strategic equipment of the Port and $250 million on the transport infrastructure of Chabahar.” India already controls many of the operations at Chabahar, as it informally took over the port in 2018 according to the BBC.
Iranian Roads and Urban Development Minister Mehrdad Bazrpash noted in remarks on Tuesday that the deal would also give India control of ports that can access several major Central Asian countries that India is currently cut off from, including Taliban-controlled Afghanistan.
“This agreement is a start for the further development of trade between the two countries, and India’s access to Afghanistan and Central Asia, Turkey, Azerbaijan and Europe through Chabahar Port will be facilitated,” he said, according to PressTV.
PressTV suggested that the true target of the Chabahar project is China, India’s most prominent geopolitical rival: “India also views the development of Chabahar, which is Iran’s only ocean port, as a project that can rival China’s investment in Pakistan’s Gwadar region.”
China has been attempting to develop the Gwadar port in Pakistan for years, facing significant obstacles including terrorism directed at Chinese engineers and contractors.
Washington expressed concern about the agreement during a State Department briefing on Tuesday, suggesting it may violate existing sanctions.
“We’re aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its own bilateral relationship with Iran,” State Department deputy spokesman Vedant Patel said, according to the Times of India. “I will just say, as it relates to the United States, US sanctions on Iran remain in place and we’ll continue to enforce them,” he added.
Iranian media recalled that the Indian government attempted to cut a deal with Tehran in 2016 to develop Chabahar, shortly after the activation of the Obama-era Joint Comprehensive Plan of Action (JCPOA) or Iran nuclear deal, but had to pause the development during the administration of President Donald Trump in response to escalated sanctions on Iran. The Times of India noted that American authorities had previously offered India exceptions to Iran sanctions specifically regarding Chabahar.
Indian External Affairs Minister S. Jaishankar discussed the port deal on Tuesday evening local time in Kolkata, urging the administration of President Joe Biden and Americans generally to be open-minded about Chabahar’s possibilities.
“We had a long association with the Chabahar port but we could never sign a long-term agreement. The reason was there were various problems… Finally, we were able to sort this out and we were able to get the long-term agreement done,” Jaishankar said, according to the Press Trust of India (PTI). “A long-term agreement is necessary because without it we cannot improve the port operations. And, the port operations, we believe, will benefit the entire region.”
“I don’t think people should take a narrow view of it. And, they have not done so in the past,” he continued. “If you look at even the US’s own attitude to Chabahar in the past, the US has been appreciative of the fact that Chabahar has a larger relevance. We will work at it.”