India & Iran Set to Make INSTC Bigger Economic Corridor

Date: 21 February 2018 - 21:37

News ID: ۵۰۳۲۷

NEW DELHI (Dispatches) - India and Iran are moving slowly and steadily to overcome all hurdles to convert the International North-South Transport Corridor (INSTC) into a bigger economic corridor.
President Rouhani, on his first state visit to New Delhi after assuming office in 2013, held talks with PM Modi, and the two sides moved forward on several contentious issues stuck for decades due to sanctions and now because of pressure from Washington.
Among the agreements signed, the most important was the lease contract for one berth, multipurpose and container terminal at Shahid Beheshti Port-Phase 1 of Chabahar for 18 months, between Port and Maritime Organization (PMO) of Iran and India Ports Global Limited (IPGL). IPGL will now begin full operations immediately, using one existing spare berth after installing additional equipment at terminal one, four more berths will be also constructed at terminal 1 and 2 in phases with an investment of US $150 million after taking them on lease for ten years.
India has built the 215 km-long strategic Delaram-Zaranj highway at a cost of Rs 600- crore, completing the road link from Chabahar to Kabul. Strategists in New Delhi want Chabahar port to become the major point for an economic corridor from India-Oman sea-Iran-Afghanistan-Central Asia to Europe.
To clear the way for an economic corridor "two sides have agreed to hold a meeting in Tehran at the earliest to include Chabahar in the INSTC framework”, an India official said on condition of anonymity.
He confirmed that "negotiations between the Indian and Iranian companies are on for financing the railways in Iran,” to complete the missing rail link from Chabahar to Europe. A high-level delegation led by SK Choudhary, CMD of IRCON, an Indian government organization, is now in Iran to finalize various contracts worth U.S. $1.6 billion, for a 663-km railway line from Chabahar to Zahedan. IRCON has signed a MOU with Construction, Development of Transport and Infrastructure Company of Iran (CDTIC), after doing a pre-feasibility study for this route.
IRCON is in the process of finalizing various funding options, including loans from EXIM Bank. India's recent accession to United Nations TIR (Transports Internationaux Routiers) Convention on international customs and transports to facilitate smooth movement of goods across international borders, and the Ashgabat Agreement which envisages setting up of an international transport and transit corridor linking central Asia with the Persian Gulf, are additional steps at enhancing regional connectivity and linking regional centers of economic growth from India-Iran-Central Asia-Europe.