India-UAE partnership offers hope for Chabahar Port’s vital equipment procurement

India Ports Global Ltd (IPGL) has been grappling with a persistent issue in obtaining the essential container handling equipment required for the Chabahar Port in Iran. In order to overcome these challenges, IPGL is actively exploring innovative strategies to secure the necessary equipment and advance this critical infrastructure project.

Chabahar Port, located on the southeastern coast of Iran, holds immense strategic significance for India. Not only does it serve as a vital gateway to Afghanistan and Central Asia, but it also offers India an alternative trade route that circumvents Pakistan. With partial funding and management from India, the port has the potential to profoundly impact regional trade and connectivity. However, its development has been significantly hindered by difficulties in procuring the necessary equipment.

Despite issuing multiple tender extensions for the purchase of cranes and container handling equipment, IPGL found itself at a standstill as they received no responses from suppliers for Chabahar Port’s crucial operations. To address this challenge, IPGL is now exploring an innovative solution by collaborating with entities in the United Arab Emirates, particularly in Abu Dhabi, Dubai, and Sharjah.

Under this strategy, UAE ports would directly negotiate and finalize contracts with equipment vendors. India would then reimburse the incurred costs in dollars. This approach is designed to circumvent the hurdles associated with directly sourcing equipment for Chabahar Port. The primary obstacle in procuring the equipment is the Western sanctions imposed on Iran due to its nuclear program, which has made suppliers reluctant to bid on contracts related to Iran.

Despite the formidable challenges, Indian officials involved in the Chabahar Port project remain optimistic. They are actively engaging with their counterparts in UAE-based ports and exploring a range of options to ensure the project advances. The Chabahar Port’s significance in enhancing India’s trade connections and regional connectivity is paramount, underscoring India’s unwavering commitment to the project’s success.

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