India’s first-ever port investment overseas at Chabahar in Iran is gaining momentum with the Persian Gulf nation approving the integration of the port with the Free Zone operating in the area and the opening of a branch by an Afghanistan bank soon.

The integration of Chabahar port with the Free Zone was approved by the Iranian Guardian Council. Subsequently, a memorandum of understanding was signed between the Ports and Maritime Organization (PMO) of the Islamic Republic of Iran and Free Zone Authorities on June 9 for implementation of laws and regulations of the Free Zone in the port of Chabahar.

“The inclusion of the port in the Free Zone is expected to boost the cargo through the port,” Arun Kumar Gupta, Managing Director of India Ports Global Ltd (IGPL), told BusinessLine .

India Ports Global is a fully owned by Sagarmala Development Company Ltd, a company controlled by the Shipping Ministry.

The trade is also upbeat with the announcement that Ghazanfar Bank of Afghanistan will soon open a branch in Chabahar, Gupta said. “It is understood that the bank has received requisite permit from Central Bank of Iran,” he added.

India Ports Global started operations from two berths at Shahid Beheshti Port of Chabahar on December 25, 2018 and has since handled container, bulk cargo, livestock and heavy lift cargo vessels.

“Transit of export consignment from Afghanistan through Chabahar commenced in February 2019 as a trickle but has now started showing a healthy upward trend. On June 30, the IPGL terminal loaded 76 twenty-foot equivalent units or TEUs (all refrigerated) for India. This is a record single loading and is a milestone in growth path of Shahid Behesti Port of Chabahar, Gupta stated.

On June 28, the port also handled the fourth consignment (300 TEUs) of wheat cargo from India to Afghanistan. This is part of the 75,000 tonnes of wheat that India is supplying to Afghanistan as humanitarian aid.

The port has a water-front of over 1,200 mts (with 70 hectares of back up area), where four post panama vessels can berth.

Exceptions granted by the US

With “exceptions” granted by the US to the port project from the sanctions it has imposed on the Persian Gulf nation, Chabahar is all set to scale greater heights, Gupta added.

India Ports Global and Aria Banader Iranian Port & Marine Services Company (ABI) of Iran signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease. Cargo revenues collected will be shared by India and Iran as per an agreed formula.

Located in the Sistan-Baluchistan Province on Iran’s South-eastern coast (outside Persian Gulf), Chabahar port gives India a sea-land access route into Afghanistan and Central Asia through Iran’s eastern borders. The project is considered a strategic venture for development of regional maritime transit traffic to Afghanistan and Central Asia.