May 24, 2016 (LBO) – India, Iran and Afghanistan have signed a tripartite agreement to turn the Iranian Chabahar port into a transit hub bypassing Pakistan, foreign media reported.
The agreement will significantly increase the use of Chabahar port and connect India to Central Asia through Afghanistan and also provide Afghanistan access to India through the sea.
Indian government said the corridor would spur unhindered flow of commerce throughout the region with the Inflow of capital and technology could lead to new industrial infrastructure in Chabahar.
This would include gas based fertilizer plants, petrochemicals, pharmaceuticals and IT and the key arteries of the corridor would pass through the Chabahar port of Iran.
During the same ceremony, Indian Prime Minister Narendra Modi said the world is witnessing a historic event not only for the three countries, but also for the nations of the region.
“When linked with the International North South Transport Corridor, it would touch South Asia at one end and Europe at another,” Modi said.
“Studies show that as compared to the traditional sea routes, it could bring down the cost and time of the cargo trade to Europe by about 50 percent.”
Indian Prime Minister and Iranian President headed the signing of the memorandum of understanding for the provision of a line of credit of 500 million US dollars.
“By joint investment and activity, we can connect India to Afghanistan, Central Asia and the Caucasus through a safe path,” Iranian President Hassan Rouhani said.
“This agreement is not only against any country, but also beneficial to the peace and stability of the region”.
The agreement however is crucial for Afghanistan, as it can reduce the dependency on Pakistan while changing the geopolitics of the region.
“Some countries in the region export terrorism and our three countries’ export is belief, joint cooperation and using regional opportunities for people’s welfare and stability for the region” Afghanistan President Ashraf Ghani said.
The deal will also have impacts for China as it will change the transit route from Afghanistan to the Indian Ocean.
The volume of trade between Iran and India in the past 11 months reached 9 billion US dollars and Iran was New Delhi’s second largest oil supplier until the sanctions.