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How Indian ports are helping Chabahar port boost its trade potential

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In a bid to boost trade at Chabahar port in Iran, Jawaharlal Nehru Port and Deendayal Port are offering discounts on the vessel and cargo charges, as per the Ministry of Ports, Shipping and Waterways.

Chabahar Port lies outside the Persian Gulf and is easily accessed from India’s western coast, bypassing Pakistan.

The port, which is located in Sistan-Balochistan province on Iran’s southern coast, is being developed by India, Iran and Afghanistan to enhance trade ties.

“To promote Shahid Beheshti Port of Chabahar, Iran Jawaharlal Nehru Port and Deendayal Port are providing discounts on Vessel related charges and Cargo related charges for the vessels going and arriving from Shahid Beheshti,” according to the Ministry.

For the past six months, the ministry has also granted a 50% discount on terminal handling charges for transit containers.

“The flow of bulk cargo is steady. Transit cargo from Afghanistan is now picking up. The Shipping line has assured us of weekly container service as volumes are on the rise,” as per a document from the MoPSW.

Short Lease Contract signed

Due to the challenges in activation of the main agreement regarding the Chabahar port, a formal Short Lease (Interim) Contract between India and Iran was signed on May 6, 2018, with the incorporation of an Iranian SPV – India Ports Global Chabahar Free Zone (IPGCFZ) – for its implementation.

The Short Lease Contract has since been renewed till June 25, 2021.

“The terms and conditions of this Contract are different than the 10-year Agreement. Under this Contract, India Ports Global Chabahar Free Zone (Iranian subsidiary of India Ports Global Ltd) took over the operations at berth length of 360 mts at Shahid Beheshti Port on 25th December 2018. IPGCFZ handled its first cargo on 30th December 2018,” the document said.

Till January 31, 2021, about 123 vessels have berthed at the terminal and IPGCFZ have handled approximately 13,752 TEUs (twenty-foot equivalent unit) and 18 lakh tonne of bulk / general cargo, it added.

At present, there are efforts on to improve the traffic at Chabahar Port.

“We are now in possession of over 1,240 mts berth length and 70 Ha of back up area. Four post Panamax vessels can now simultaneously berth at our terminal,” as per the shipping ministry document.

Proposal for Shipping Service using INSTC route

The ministry also said CONCOR has proposed to commence shipping service from the east and west coast of India to Vorsino terminal in Moscow via Shahid Beheshti port using INSTC (International North-South Transport Corridor) route.

This will be under multimodal using sea leg till Chabahar and thereafter by road and/or rail. It is under their internal approvals, as per the document.

On May 6, 2015, a ministerial-level MoU on Chabahar – Shahid Beheshti Port – was signed between India and Iran and the historic agreement was executed on May 23, 2016, in Tehran during the visit of Prime Minister Narendra Modi.

The agreement was signed between Aria Banader Iranian Port and Marine Services Company (ABI) of Iran and India Ports Global Ltd (SPV formed by the Ministry of Shipping in January 2015) for the development of phase one of Shahid Beheshti Port of Chabahar.

As per the contract terms, India has to equip and operate two terminals in Phase 1 at the cost of USD 85 million and after activation of the main contract, India will operate Shahid Beheshti Port of Chabahar for 10 years.

In January, India supplied a consignment of two mobile harbour cranes to the Chabahar port having a total contract value of over USD 25 million.

Sanjay Bandopadhyaya, Additional Secretary, MoPSW shared that two more cranes are standing for loading near the port near Venice, which will reach by March-end to this port, while another two will reach by June-end.

Since 2017, he has said, India had sent a consignment of 1.1 lakh tonnes of wheat, pulses and other assistance in over 4,800 containers to Afghanistan through the Chabahar port.

The bilateral contract between Iran and India was signed on May 23, 2016, with a total value of USD 85 million ‎for equipping, mechanising and starting operations at the port under the first phase.

India Ports Global Ltd (IPGL), Mumbai –a special purpose vehicle — was incorporated under the Shipping Ministry in this regard.

IPGL was jointly promoted by Jawaharlal Nehru Port Trust (JNPT) and Deendayal Port Trust (DPT) for the development and management of Shahid Beheshti Port of Chabahar.

The location of the Chabahar port has a strategic advantage and high potential to provide connectivity between India, Iran, Afghanistan, Uzbekistan and other Commonwealth of Independent States (CIS) countries, especially Eastern CIS nations, and boost trade.

The development of the Chabahar port will help in the expansion of economic and mutual relations between India and Iran as well as give a further boost to the maritime trade between the countries.

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