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India will push ahead this week with plans to build a port in southeast Iran, two sources said, with Indian Prime Minister Narendra Modi prepared to fend off US pressure not to rush into any deals with Iran.
According to IRNA, Indian Shipping Minister Nitin Gadkari left New Delhi for Tehran on Tuesday at the head of a delegation for talks with his Iranian counterparts.
Gadkari is expected to sign a deal for making by INVESTMENT
in Chabahar Port on Wednesday.India and Iran agreed in 2003 to develop the port in the Sea of Oman, near Iran's border with Pakistan, but the venture made little progress because of Western sanctions on Iran.
Now, spurred on by Chinese President Xi Jinping's signing of energy and infrastructure agreements with Pakistan worth $46 billion, Modi wants to swiftly sign trade deals with Iran and other Persian Gulf countries.
Encouraged by the prospect of a nuclear deal between world powers and Tehran by July 1 on Iran's nuclear program, after which sanctions could be lifted, India recently sent a delegation to Iran to scout for trade, energy and infrastructure deals.
The United States cautioned India and others last week against strengthening ties with Iran ahead of a final agreement. But Indian officials said New Delhi could not ignore its national interest and cited a report that a US energy delegation was visiting Iran.
"We don't want to miss this opportunity and will move as expeditiously as possible," the shipping ministry source said.
India's cabinet approved the plan to develop Chabahar Port last year.
Iran has also proposed a free-trade agreement with India, a trade ministry source said. Rupee-denominated trade with Iran, started in 2012 because of complications arising from sanctions, has almost doubled Indian exports to Tehran in the past two years to $4 billion.
Now Indian exporters want to build on that, using a free-trade zone being developed near Chabahar to export more to the Commonwealth of Independent States, made up of former Soviet Republics, said Mumbai-based Khalid Khan, regional head of the Federation of Indian Export Organizations.
"It will be Modi's gift to Iran and Indian exporters," he said of the port project.
India wants to build the port, as it would cut transport costs and freight time to Central Asia and the Persian Gulf by about a third.
The port is also central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.
India has already spent about $100 million to construct a 220-km (140-mile) road in western Afghanistan to link up with Chabahar Port.
Chabahar is along the coast from Gwadar Port in Pakistan that is being developed with China's help, said Robin Mills, the head of consulting at Dubai-based Manaar Energy. "So there is a strategic element for the Indian side.”
Iran could rapidly develop as a destination for global INVESTORS
when Western sanctions are lifted and Modi wants to fast-track the port project.At the weekend, Iranian media reported that Iran had turned down an Indian request seeking multibillion-dollar development rights for the Farzad B gas field.
"I think India should try to push ahead and take advantage wherever they can before Iran changes its mind," Mills said.
India to sign port deal with Iran despite US pressure
