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EghtesadOnline: Indian Prime Minister Narendra Modi said Kandla Port in Gujarat will soon be connected with Iran’s Chabahar Port, which will give a boost to India’s international trade and place the Indian port firmly on the global map.

India Ports Global Pvt. Ltd., a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust for development of ports overseas will develop and operate Chabahar Port.

IPGPL is in the process of setting up two container berths and three multi-cargo berths, the Indian newspaper Mint reported on its website.

Chabahar Port, located in Sistan-Baluchestan Province on Iran’s southern coast, is of strategic utility for India. It lies outside the Persian Gulf and is easily accessed from India’s western coast. It is located on the Sea of Oman, near Iran’s border with Pakistan, according to Financial Tribune.

The port will allow India access to landlocked Afghanistan and energy-rich Central Asia through JNPT and KPT-run ports on India’s west coast. Moreover, the port will promote Indian strategic interests in the Persian Gulf and Strait of Hormuz.

Kandla Port, run by KPT, is one of India’s largest ports run by the central government and the second largest among all the commercial ports in the country. Last year, it handled close to 106 million tons of cargo.

“The linking [of Kandla with Chabahar] will mean Kandla will cement its feet like Angad did,” the prime minister said on Monday in a visit to Gujarat at Kandla in Kutch District, referring to an episode from Ramayana where the character put his feet down in King Ravana’s court and nobody could move it however hard they tried.

The prime minister said if India wants to make a place for itself in global trade, it should have the best of arrangements in the port sector. “The combination of infrastructure and efficiency is vital for the port sector to thrive,” he said, adding that Kandla Port has emerged as one of the finest in Asia and its rapid growth has surprised many economists.

Tehran, New Delhi and Kabul signed a trilateral agreement to develop Chabahar in Tehran in May 2016, when Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani paid a state visit to Iran.

The deal stipulates the development and operation of two terminals and three berths at the port with cargo handling capacities for 10 years.

Based on the agreement, Iran is to provide land in Chabahar Special Economic Zone to Indian companies for setting up petrochemical, fertilizer and other gas-based industries.

India has also agreed to build a 500-km railroad from Chabahar to Zahedan, the provincial capital of Sistan-Baluchestan, close to the Afghan border.

India’s state-owned IRCON has agreed to build a rail route at a cost of $1.6 billion as part of the transit corridor to Afghanistan.

After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan. Hence, when the Afghan cargo arrives in Zahedan, it can be transported by a 1,380-km railroad to Chabahar and then shipped to India.

India has agreed to invest $500 million in Chabahar Port’s development.

A few days ago, Gholamreza Salami, an advisor of the Ministry of Roads and Urban Development, warned that Chabahar Port’s development project may be losing out to a similar project to develop the Pakistani port of Gwadar amid an internal dispute over the pressing need to attract foreign investment in the strategic Iranian port.

“Chabahar project’s completion requires $2.5 billion in investment,” he said. “It is not possible to get access to this amount by relying on domestic resources. We need foreign investment. Foreign companies are ready to enter into partnership with Iran to develop the region, but we have not been able to select a suitable partner.”

Blaming “domestic opponents of Chabahar’s expansion”, who should “change their mindset and support the government in this regard”, he said, “The government and those who exert influence over the expansion of this corridor need to reach consensus on how much it could benefit Iran’s economy.”

India’s cooperation to develop Chabahar was perceived from the start as a challenge to a transport corridor from China to Pakistan’s Gwadar Port.

“Chabahar can be a transit path from the East to Central Asia and Afghanistan. It can even offer services to the Caspian Sea … This is while Pakistan’s Gwadar is completing its infrastructures, through some $50 billion in investment made by the Chinese,” Salami said.

“When the infrastructures are complete, a railroad will reach Pakistan from western China. Many experts believe the progress of this project will undermine Chabahar’s status,” he concluded.

Narendra Modi Chabahar port Iran-India cooperation Iran's Chabahar Kandla port