New Delhi: India and Iran may soon revive plans to expand the strategic Chabahar Port and restore normal operations at the facility as geopolitical conditions in the region begin to stabilize, according to two people aware of the matter. This would reopen a key trade gateway that is seen key for India to boost connectivity with Afghanistan and Central Asia while bypassing Pakistan.
While there’s no timeline yet, the upcoming talks are expected to focus on the future of operations at the Shahid Beheshti terminal, which was being run by India Ports Global Ltd IPGL under a 10-year agreement signed in May 2024, as well as long-pending proposals to expand the port’s cargo handling capacity and strengthen its connectivity with Central Asia, said the first person quoted above.
The discussions will come after months of uncertainty surrounding the project amid US sanctions-related concerns and disruptions caused by .
“With the security situation showing signs of improvement, both sides are expected to revisit the roadmap for normalizing operations and enhancing capacity at Chabahar,” said the second person cited above.
India has already fulfilled its commitment of investing $120 million towards procurement of port equipment under the long-term contract signed with Iran’s Ports and Maritime Organisation (PMO).
The first person said the discussions could also cover future expansion of the Shahid Beheshti terminal, including increasing container handling capacity, developing additional cargo berths and integrating the port more closely with regional transport corridors, such as the International North-South Transport Corridor (INSTC).
Capacity expansion
Earlier plans envisaged expanding the port’s capacity from around 100,000 twenty-foot equivalent units (TEUs) now to 500,000 TEUs over next few years and linking the facility with Iran’s rail network through the 700 km Chabahar-Zahedan railway project. India had proposed to invest ($400-500 million over next few years to expand capacity of the port and support development of the railway line to link the port to Afghanistan and other Central Asian countries.
The port has long been viewed as a cornerstone of India’s connectivity strategy in Eurasia and a key component of efforts to boost trade with Afghanistan, Central Asia and Russia. The project is also regarded as an important counterweight to in the region through Pakistan’s Gwadar Port.
The renewed engagement is expected to include consultations on the sanctions environment and mechanisms to allow uninterrupted commercial operations at the terminal. New Delhi has remained engaged with stakeholders, including the US, on issues arising from sanctions-related developments affecting the project.
The first person said India is expected to use diplomatic channels to ensure that operations at Chabahar do not come under any form of , as had been a concern earlier. The US had extended a sanctions waiver for the port before the start of the Iran-Israel conflict, but the waiver lapsed in April, adding to uncertainty over future operations.
This person added that both India and Iran are keen to ensure that Chabahar regains momentum as a regional trade and logistics hub, with expansion plans likely to be taken up once operational normalcy is restored.
Experts see the renewed push on Chabahar operations as a significant development for trade. “The possibility of India resuming a more active role at the Shahid Beheshti terminal after a stable US-Iran understanding would be significant from both a trade and logistics perspective. For the shipping and logistics sector, continuity and infrastructure development are critical,” said Pushpank Kaushik, chief executive officer & head of business development (subcontinent, Middle East, and Southeast Asia) at Jassper Shipping. “If conditions become favourable, expanding Chabahar’s capacity can improve cargo movement, reduce transit bottlenecks, and create an additional gateway for regional trade.”
“However, the focus should not be only on regaining operational control. The larger opportunity lies in strengthening supporting infrastructure, enhancing multimodal connectivity, and improving cargo handling capabilities so that the port can operate at scale,” he added.
“Modern world needs several trade corridors for supply chain resilience. A multi-modal trade corridor via the Port of Chabahar is beneficial for India as well Central Asia and Europe. The INSTC that is part of this multi modal route will be a game changer when fully implemented. Opening of Port of Chabahar will be good for global shipping and logistics,” said Rajiv Jalota, former chairman of the Mumbai Port Authority and Indian Ports Association and a maritime sector expert.
Queries on the development emailed to the ministries of ports, shipping and waterways and external affairs, as well as the Iranian Embassy, remained unanswered until press time.
The port has a current capacity of 100,000 TEU, which will be raised to 500,000 TEUs over next few years. The facility comprises container terminal and a multi cargo berth. It has a deep draft that can handle larger vessels and vessels calling at Chabahar and avoids traffic congestion and waiting time at anchorage, being outside the Strait of Hormuz.
The port handles a diverse range of products, including automobile spare parts, agricultural products, iron ore, clinkers, etc. Efforts are on to widen this basket.