Iran Preps for Sanctions by Expanding Major Port Project

Providing landlocked Central Asia with shipping access through Iran’s southeastern Chabahar port has been a hot topic since the fall of the Soviet Union. With China’s One Belt One Road initiative in recent years and investment by Central Asian countries in the new transit routes, Iran faces more challenges than ever to utilize the potential of Chabahar.

Iran’s development strategy for the key port entails close cooperation with India and Afghanistan. To India, the joint venture means access to Afghanistan and Central Asia, less concern about China’s One Belt One Road initiative, and a means for securing its growing need for energy and raw materials. For Afghanistan, it will boost its strategic options against Pakistan. For Iran, however, economic gains are of utmost importance.

Despite the increasing challenges posed by the re-imposition of US sanctions on Iran, the Chabahar Free Trade Zone — one of the most important symbols of President Hassan Rouhani’s political and economic diplomacy — is progressing, with ambitious proposals for its development.

The 2016 agreement between Iran and India to develop the southeastern Iranian port became operational on June 13. Within this framework, India will invest $85 million, and India Ports Global Private Limited, a company affiliated with the Indian shipping ministry, will undertake with its Iranian partner the task of equipping and managing two of the port’s terminals.