Cabinet may okay $100 million investment in Iran's Chahbahar port

[thestringshredder]

EW DELHI: The Union Cabinet is expected to clear an investment of $100 million in a crucial project to develop Iran's Chahbahar port this week. Foreign minister Salman Khurshid, who will be in Tehran on Friday, will work out the final details of the project with Iran. Khurshid will also work on a trilateral transit agreement with Iran and Afghanistan, since the latter is the most important beneficiary of the Chahbahar port.

Iran has promised to ramp up capacity of the port in five phases to 20 million tonnes by 2020. Although India has long promised the project, this has been complicated by several factors. US sanctions have made it very difficult to finance projects in Iran. The sanctions also spooked parts of the government like the shipping ministry which were unwilling to attract US sanctions. Similar reservations were expressed by the finance ministry as well.

It took much persuasion by the external affairs ministry and national security adviser Shivshankar Menon and a careful reading of US sanctions laws to get other parts of the government on board. The delay on India's part after pushing the project came in for criticism by the Iranians as well, who said they would be willing to do their bit for the project.

India had also mooted the idea of using Iran's Indian earnings (India pays for 45% of its oil buys from Iran in rupees which are accumulating in an account in UCO Bank). But this idea did not fly with Iran.

The idea of the project is to give India access to Afghanistan and Central Asia through Iran, because the Pakistan transit route is unavailable to India. Studies have shown that goods transported through Chahbahar cut transportation time by several days, which would mean huge savings for India and Afghanistan. On the other hand, it would give Afghanistan an approach to the sea, quite apart from the Karachi port, and thereby reduce its dependence on Pakistan.

With Pakistan giving Gwadar port to China, Chahbahar has increased in strategic importance for India.

Link - Cabinet may okay $100 million investment in Iran's Chahbahar port - The Times of India

 

[Pakistanisage]

India's Taxpayer's funds being used to develop Iranian Port. This would be interesting to see how that plays out.

 

[karan21]

India's Taxpayer's funds being used to develop Iranian Port. This would be interesting to see how that plays out.

Indian tax payers are fine with that. It will help expand Indian influence and help India gain access to the middle eastern oil and goods.

 

[Abingdonboy]

India's Taxpayer's funds being used to develop Iranian Port. This would be interesting to see how that plays out.

Wouldn't play out much differently than the billions India has pumped into Afghanistan to build roads,schools,hospitals etc or the like in Africa, I'd imagine.

 

[black_jack]

India's Taxpayer's funds being used to develop Iranian Port. This would be interesting to see how that plays out.

Indian tax payers will have safe access to Afghanistani markets.

 

[Koovie]

India's Taxpayer's funds being used to develop Iranian Port. This would be interesting to see how that plays out.

100 million USD arent that much for a 2 trillion dollar economy.

 

[RoYaL~GuJJaR]

Good News....

 

[jha]

This is a good step. Chahbahar is must for Indian trade with CARs.

 

[Sergi]

Great news We get road to Afganistan they they a new road to sea reducing dependence on Pakistan
I am wondering what are the loop holes in the sanction that we are goings to exploit. Any ideas ???

 

[jaiind]

now india is moving its players in right manner....

 

[janon]

Might not go down too well with USA, who is trying to squeeze Iran through sanctions. But it is a win-win situation for everybody else, and will cause a big spurt in economic activity and growth. This guarantees us transit of natural gas (and many other goods) from Iran and central asia without the need for dependence on pakistan.

As the article states, the transit time and expense can be greatly reduced, and the need to transport stuff through the restive balochistan province can be eliminated.

On a geopolitical level, afghanistan can now access the world market with no help from pakistan, thus reducing their dependence on pak. So while China accesses the central asian markets via gwadar, we will do the same via chahbahar. It will also help us build and strenghthen our ties with those nations. Part of our soaring energy needs can be fulfilled by cheap natural gas import, which is a lot cheaper and efficient and cleaner than coal. Already, many industrial units in India have started transitioning to LNG instead of petroleum. Dahej in gujarat is already importing a lot of LNG from the gulf states, and Puthuvype in Kerala will soon begin to do so as well. If they can start importing from Iran, they would get it for even lower prices, since Iran is hit by all sorts of sanctions. We could reduce our oil import bill, which is currently the single biggest drain on our forex reserves.

The ways in which this endeavour can help our economy (and that of Iran and central asian countries) grow are many. Not to mention, the strategic benefits in the long run. I seriously hope they go ahead with this project with zeal and vigour, and that USA won't throw a spanner in the works.

 

[Srinivas]

It is good step and USA has no problem with India dealing with Iran , they don't want China to take advantage of this situation and grow its tentacles.

Might not go down too well with USA, who is trying to squeeze Iran through sanctions. But it is a win-win situation for everybody else, and will cause a big spurt in economic activity and growth. This guarantees us transit of natural gas (and many other goods) from Iran and central asia without the need for dependence on pakistan.

As the article states, the transit time and expense can be greatly reduced, and the need to transport stuff through the restive balochistan province can be eliminated.

On a geopolitical level, afghanistan can now access the world market with no help from pakistan, thus reducing their dependence on pak. So while China accesses the central asian markets via gwadar, we will do the same via chahbahar. It will also help us build and strenghthen our ties with those nations. Part of our soaring energy needs can be fulfilled by cheap natural gas import, which is a lot cheaper and efficient and cleaner than coal. Already, many industrial units in India have started transitioning to LNG instead of petroleum. Dahej in gujarat is already importing a lot of LNG from the gulf states, and Puthuvype in Kerala will soon begin to do so as well. If they can start importing from Iran, they would get it for even lower prices, since Iran is hit by all sorts of sanctions. We could reduce our oil import bill, which is currently the single biggest drain on our forex reserves.

The ways in which this endeavour can help our economy (and that of Iran and central asian countries) grow are many. Not to mention, the strategic benefits in the long run. I seriously hope they go ahead with this project with zeal and vigour, and that USA won't throw a spanner in the works.

 

[janon]

It is good step and USA has no problem with India dealing with Iran , they don't want China to take advantage of this situation and grow its tentacles.

Oh you are very mistaken on that. The reason this project has been delayed so long is because of US pressure. Iran is a country under US sanctions, which means that they will not look kindly on anybody who does business with Iran. American companies and individuals are banned by law from doing business with Iran, and any other foreign entity that does business with Iran risks being similarly shunned by USA - ie, if an Indian company sets up a branch in Iran, they could be banned from doing any business with USA.

This port is a way for Iran to beat back the effect of american sanctions, and to earn some currency again. It will vastly diminish the hardship caused by US and European sanctions. It is not just a port that India is building there; India's plans for the region are grand. The Border Roads Organisation is already laying roads linking this port to southern aghanistan, and India will also construct a railway line from Chah Bahar to afghanistan and possibly to other central asian countries.

Since the effect of all this is to let Iran survive the economic sanctions, which are meant to bring that country to submission, obviously the USA will have problems with it. Why wouldn't they, when we are rendering their sanctions ineffective?

 

[Srinivas]

Oh you are very mistaken on that. The reason this project has been delayed so long is because of US pressure. Iran is a country under US sanctions, which means that they will not look kindly on anybody who does business with Iran. American companies and individuals are banned by law from doing business with Iran, and any other foreign entity that does business with Iran risks being similarly shunned by USA - ie, if an Indian company sets up a branch in Iran, they could be banned from doing any business with USA.

This port is a way for Iran to beat back the effect of american sanctions, and to earn some currency again. It will vastly diminish the hardship caused by US and European sanctions. It is not just a port that India is building there; India's plans for the region are grand. The Border Roads Organisation is already laying roads linking this port to southern aghanistan, and India will also construct a railway line from Chah Bahar to afghanistan and possibly to other central asian countries.

Since the effect of all this is to let Iran survive the economic sanctions, which are meant to bring that country to submission, obviously the USA will have problems with it. Why wouldn't they, when we are rendering their sanctions ineffective?

Mate Donot be mistaken by the current situation, If the Nuke talks between Iran and USA yield results every thing there will change.

The reason for India to go slow on Chahabar is because of Afganistan situation, as the deadline came nearer i.e 2014, the things became clear that some amount of force level will be there in Afghanistan so India went ahead of this project.

Yes the investment in Iran is not only related to Iran but with Afghanistan and central Asian Nations with which we have free trade agreements.

 

[neehar]

Oh you are very mistaken on that. The reason this project has been delayed so long is because of US pressure. Iran is a country under US sanctions, which means that they will not look kindly on anybody who does business with Iran. American companies and individuals are banned by law from doing business with Iran, and any other foreign entity that does business with Iran risks being similarly shunned by USA - ie, if an Indian company sets up a branch in Iran, they could be banned from doing any business with USA.

This port is a way for Iran to beat back the effect of american sanctions, and to earn some currency again. It will vastly diminish the hardship caused by US and European sanctions. It is not just a port that India is building there; India's plans for the region are grand. The Border Roads Organisation is already laying roads linking this port to southern aghanistan, and India will also construct a railway line from Chah Bahar to afghanistan and possibly to other central asian countries.

Since the effect of all this is to let Iran survive the economic sanctions, which are meant to bring that country to submission, obviously the USA will have problems with it. Why wouldn't they, when we are rendering their sanctions ineffective?

nothing new to india i guess.we're already trading with iran inspite of the sanctions.u.s would be fine if the indian influence in afghanistan increases.they're well aware of the geopolitics of the region.i'm sure india will find out a way in this situation