Fresh agreement between India, Iran may start operations at Chabahar Port

As operations at Chabahar Port get delayed over US sanctions, the agreement between India and Iran will now be tweaked so that payment can be made in rupees instead of dollars before interim functioning at the port starts in January.


According to a senior shipping ministry official, a central government team is visiting Chabahar Port to work out the modalities for a new or a revised agreement.


Also, Sagarmala, a government company, will take full control of the board of Indian Ports Global Ltd, which is currently being held by Jawaharlal Nehru Port Trust and Deendayal Port Trust (previously Kandla Port Trust). Since Sagarmala is a government company, Indian Ports Global will be backed by a sovereign guarantee.


India Ports Global is a 60:40 joint venture between Jawaharlal Port Trust and Deendayal Port Trust, and was set up by the government to make strategic investments in ports overseas.


Before the Centre finalised Sagarmala to take over Chabahar Port, Bandar Abbas-based Kaveh Port and Marine Services was assigned the task of operation and maintenance of the port as a stop-gap arrangement.


“As operations at Chabahar Port have been delayed due to US sanctions on Iran, the agreement needs to be reworked with a few changes here and there,” the official said.


The total trade between India and Iran is about $11 billion. Of this, crude oil imports are worth $9 billion and would now be traded on a rupee-payment agreement entirely. The earlier practice was of a rupee-rial agreement (60:40 basis).


Even though it imposed sanctions on Iran, the United States, in November, exempted India from certain sanctions for development of the strategically-located port, along with construction of the railway line connecting it with Afghanistan.  


In February 2016, the Union Cabinet approved a provision of credit worth $150 million from EXIM Bank to Iran for the development of the port.


The port is expected to provide opportunities to Indian companies to penetrate and enhance their footprint in the region.


Near Chabahar Port, China has already constructed Gwadar Port in Balochistan province of Pakistan.


An MoU was signed between India and Iran on May 6, 2015, by shipping minister Nitin Gadkari and his Iranian counterpart. According to the pact, India would execute and operate two berths at Chabahar Port phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.




  • 30% discount on all items, port dues and duties and container vessels
  • Minimum 30% discount on terminal handling charges
  • 75% discount on storage of imported containers and 87.5% on storage of the exported ones
  • 30% discount for the costs of transfer
  • In comparison to other ports of the country, there is no waiting for the vessels
  • Distance from airport is 40 km