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First Indian Supplies for Chabahar Port Set to Ship

Chabahar
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Published Jun 16, 2016 9:05 PM by The Maritime Executive

India has announced plans for major investments at the Iranian port of Chabahar – and on Thursday, an Indian official told media that the first shipment of the program will be sent next month. 

"The maiden consignment of rail from India worth $150 million would be sent to Iran in July," the source said, following a meeting between transport minister Nitin Gadkari and Iranian ambassador Gholamreza Ansari. 

The formal agreement for port investments was signed last month during Prime Minister Narendra Modi's goodwill visit to Iran. 

As part of the plan, Indian railway operator PSU IRCON will construct a rail line from Chabahar to Afghanistan – giving India a much-desired strategic rail link to central Asia. Iran, India and Afghanistan have signed a trilateral agreement on the transport corridor, and Modi has described the development in historic terms.

India's port investments could total to $500 million, and Modi has suggested that adjacent free trade zone developments in petchem and other facilities could bring its commitments to the tens of billions of dollars.

American officials remain wary of the deal in light of the remaining sanctions on Iran. The U.S. and EU lifted nuclear-related sanctions on Iran in January, but some restrictions to trade remain – especially on banking, on the participation of U.S. businesses and on dollar-denominated transactions.

"We have been very clear with the Indians [about] continuing restrictions on activities with respect to Iran," said Nisha Desai Biswal, Assistant Secretary of State for South and Central Asian Affairs, testifying before the Senate Foreign Relations Committee. "We have to examine the details of the Chabahar announcement to see where it falls in that place."

Biswal said the administration recognized that India's relationship with Iran was primarily focused on economic and energy issues. "From the Indian perspective, Iran represents for India a gateway into Afghanistan and Central Asia," she said. "It needs access that it doesn't have."