India’s operations at Chabahar port in Iran have turned “commercially viable” in 2023; and the two countries are “rapidly progressing towards signing a long-term contract”, Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal said.

Chabahar is India’s first overseas port project and the long-term agreement is valid for 10 years and to be extended automatically. It is meant to replace an initial pact which covers India’s operations at Shahid Beheshti terminal in Chabahar port. The initial pact is renewed on an annual basis.

Between 2018 and May 2023, bulk and general cargo traffic at Chabahar was 6.56 million tonnes.

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Cargo handling

According to Sonowal, with cargo handling at the port going up “significantly” possibilities of future investments there cannot be ruled out either.

For 2023, India is targeting a cargo handling of 13,282 TEUs at the Shahid Beheshti terminal. As against this, cargo handling in 2022 was 3,096 TEUs.

“The terminal at Chabahar is commercially viable now. And we are in discussions with Iran to sign the long-term contract. It should be through very soon. Scope of future investments in Chabahar will come up for discussions later,” Sonowal told businessline.

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Increase in cargo handling

Data from MoPSW show cargo handled at the Shahid Beheshti terminal of Chabahar port in May was 3,503 TEU (twenty-foot equivalent unit), up 25 per cent month-on-month, over April. Bulk cargo handled was 288,075 tonnes, up nearly 150 per cent in May, over April (116,648 tonnes).

“May has been one of the best months in the history of Chabahar, so far,” Sonowal said.

Till May, bulk cargo loaded at the terminal was 2,00,578 tonnes; while cargo unloaded was 5,87,884 tonnes, Ministry officials said.

Cargo handled in previous months of the year was 1,90,548 tonnes (3,459 TEU) in January; 1,06,448 tonnes (1,072 TEU) in February; and 2,22,958 tonnes (3,105 TEU) in March.

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Long-term contract

Iranian media had recently quoted Ali Akbar Safaei, the chief executive of the country’s Ports and Maritime Organization, where he said the two countries have resolved a major portion of their issues concerning the development of the Chabahar Port.

The resolution reportedly came after a series of discussions held during a visit by an Indian delegation to Iran, with optimism expressed over settling the remaining issues in upcoming meetings for finaliing a long-term contract.

“As part of the memorandum of understanding among Iran, India, and Afghanistan, so far, an initial investment worth $25 million has been committed to Iran and will be used to develop the port,” he was quoted.

When asked Sonowal said: “Discussions are progressing well. There are some details in the long-term contract that are being worked out.”