Tehran: India, Iran and Afghanistan signed a three-way transit accord on Monday as New Delhi and Tehran inked an agreement worth $500 million to develop the Chabahar port.
Indian Prime Minister Narendra Modi and Iran President Hassan Rowhani oversaw officials from their respective sides sign 12 memorandum of understandings under which India’s EXIM Bank will open a $500-million line of credit for Iran’s Maritime and Ports Organisation to develop the Chabahar port into a regional trading hub.
“This deal will be like spring for all three countries,” Rowhani said at a joint news conference, a play on the name of the Chabahar port. The word “bahar” means spring in Farsi. He hoped the deal could become a “great symbol of cooperation between Iran and India”.
The project means India will be able to tap into the Iranian and Afghan markets, and land-locked Afghanistan will also get an alternative to ports in Pakistan.
“This is a corridor of peace and prosperity,” Modi said of the trilateral deal in a tweet hailing it as a new chapter in India-Iran strategic partnership. “It will positively impact the lives of people and deepen economic ties.”
The deal, which runs in conjunction with the development of road and rail links through Iran to Afghanistan, also represented a strategic victory for India over China, which has been competing to develop the port.
Modi’s visit, the first by an Indian premier to Iran in 15 years, comes after international sanctions against Tehran were lifted in mid-January.
Since that long-awaited agreement was reached in July, officials from dozens of mainly Asian and European countries have visited Iran to seek a share of its 80-million strong market.
India, China’s greatest economic rival in Asia, is among the last regional powers to arrive.
Chinese President Xi Jinping visited Iran in late January and pledged to expand trade to $600 billion in the next 10 years. Xi’s visit, only days after economic sanctions against Iran were lifted, was in line with his “One Belt One Road” foreign policy.
The first train to connect China and Iran arrived in Tehran in February loaded with Chinese goods, reviving the ancient trade route known as the Silk Road.
Trilateral transit accord
Modi and Rowhani were joined later by Afghan President Ashraf Ghani, who landed in Tehran Monday morning, to sign a three-way transit accord.
The three huddled and clasped hands gleefully like teammates after signing the accord. The deal, connecting Iran, India, and Afghanistan to central Asia — bypassing Pakistan, would boost economic growth in the region, Modi said.
“We want to link to the world, but connectivity among ourselves is also a priority,” he said. “The corridor would spur unhindered flow of commerce throughout the region. Inflow of capital and technology could lead to new industrial infrastructure in Chabahar.”
The port, “when linked with the International North South Transport Corridor, would touch South Asia at one end and Europe at another.”
Rowhani said it was “not merely an economic document but a political and regional one” with a message of regional opportunities for development.
He cautioned that the agreement was not against any other country, but to the benefit of “peace and stability in the region”.
“Today’s agreement will not be against any country and the activities of the three countries will be to the interest of the whole region,” said the Iranian president as he proceeded to offer an olive branch to regional competitors.
“Other countries too can join this document of partnership in future.”
Ghani said the partnership was only the beginning.
“Our will today begins in Chabahar but eventually ends only in an all-rounded and comprehensive cultural and economic cooperation,” he said.
