Chabahar port set for major upgrade with rail link

An Indian state-run company’s operations at Iran’s Chabahar port are set to get a boost when the facility’s capacity is substantially expanded and connected to the Iranian railway network by mid-2026.

India and Iran have continued their efforts to further develop Chabahar port despite the potential threat from the US administration of ending waivers to sanctions that benefited the facility on the Gulf of Oman.

Work is underway to expand the Chabahar port’s capacity from 100,000 TEUs (twenty-foot equivalent units) to 500,000 TEUs and to connect the port to the Iranian railway network by completing 700-km of tracks to connect Chabahar and Zahedan. Both projects are expected to be complete by the middle of next year, the people said.

The completion of the rail link will allow India and Iran to use the port as a gateway to the International North-South Transport Corridor (INSTC) and increase access to markets in Central Asian and Eurasian countries, the people said. Efforts to realise the port’s full potential also figured in discussions during Iranian foreign minister Abbas Araghchi’s visit to New Delhi earlier this month.

In May last year, India and Iran signed a 10-year agreement for operations at Shahid Beheshti terminal of Chabahar port. Besides a commitment to invest $120 million to acquire equipment for port operations, India offered a credit window of $250 million for developing infrastructure around the deep-sea port.

While the US administration announced in February this year that it could potentially end waivers to sanctions on Iran that had benefited Chabahar, the people said no action had been taken in this regard by Washington so far.

A national security presidential memorandum signed by US President Donald Trump in February directed secretary of state Marco Rubio to “modify or rescind sanction waivers”, including those related to Chabahar port. Since then, the Trump administration has launched talks with Iran on its nuclear programme, raising hopes that there wouldn’t be any immediate action related to sanctions. Iran and the US held their fifth round of negotiations on the nuclear issue last week.

The developments have come at a time when there has been a steady increase in the handling of cargo by Chabahar port in recent years. According to figures provided by the government in Parliament, the volume of goods moved through Chabahar port in Iran has increased from 1.2 million tonnes in FY21 to 2.84 million tonnes in FY24.

In December 2018, state-run India Ports Global Limited took over operations at Shahid Beheshti terminal at Chabahar port through its wholly owned subsidiary, India Ports Global Chabahar Free Zone.

Since 2018, the port has handled more than 450 vessels, 134,082 TEUs of container cargo and more than 8.7 million tonnes of bulk and general cargo, external affairs minister S Jaishankar told Rajya Sabha last November. India has supplied port equipment worth $24 million so far and the process for procuring the remaining equipment is underway.