Page 47 - IRANRptMay21

Suez Canal
India expects full-scale operations at Iran’s Chabahar oceanic port by end of May
container ship Ever Given that went aground in March.
Though still in the early stages of development, INSTC can already be sold as a 7,200-kilometre-long (4,475-mile) ship, rail and road transportation network that links the Indian Ocean to the Caspian Sea via the Persian Gulf, with routes running via Iran and Azerbaijan into Russia and Northern Europe. Shipments that have traversed the Indian Ocean can be unloaded at Iran’s sole oceanic port, Chabahar, which Iran and India are jointly developing. Rail and road links running north from Chabahar are subject to ongoing construction or expansion and Moscow and Tehran have even talked about building a canal through Iran to the Caspian Sea.
Russian Foreign Minister Sergey Lavrov during a visit to Iran in mid-April said the Russian government is interested in further committing to INSTC development, noting that the disruption of shipping in the Suez Canal—through which 12% of global trade volume passes—has prompted serious consideration of alternative routes.
Yury Trutnev, one of Russia's deputy prime ministers, told the media in late March that the Russian “northern sea route”, as INSTC is sometimes called, could be an important backup option for global trade in case shipping was blocked again in Egypt’s Suez Canal.
Iran's ambassador to Russia, Kazem Jalali, made similar comments when he spoke to the press on March 28.
But INSTC was first proposed as long ago as 2002 by Russia, Iran and India, thus there remains plenty of scepticism as to how committed to its rapid development the various countries involved in it will become, even given the new ‘marketing opportunity’ offered by the brief crisis caused by the blocking of the Suez.
Egyptian officials, meanwhile, have pointed out that INSTC is only operational part of the year because of freezing weather.
India expects that full-scale operations will start at Iran’s sole oceanic port, Chabahar, by the end of May, according to the Indian ports and shipping minister.
Iran and India are jointly developing Chabahar, located on the Gulf of Oman and offering unhindered access to the Indian Ocean, given its potential for facilitating trade with Afghanistan and central Asian countries, including Kazakhstan and Uzbekistan, with the avoidance of New Delhi’s arch-rival Pakistan. Pakistan and China are jointly developing Gwadar on the Arabian Sea, a short distance from Chabahar across the border from Iran in Pakistan, as a rival port.
The US maintains a sanctions waiver on the development of the port, taking into account its importance to the development of the conflict-torn Afghan economy, but local reports suggest that indirect effects of American sanctions have slowed down the emergence of Chabahar as a fully-fledged cargo hub. Indian officials are now counting on a thaw in relations between Washington and Tehran under US President Joe Biden before moving forward with $500mn of investments centred on Chabahar, Indian press reports indicate. “I am expecting to visit Iran in April or May for the inauguration of full operations,” Mansukh Mandaviya, India’s ports and shipping minister, told Reuters.
India is developing the Shahid Beheshti complex and one other terminal at the port under an agreement signed with Iran. Under the deal, it will operate the terminals for 10 years.
Mandaviya said the port had already commenced operations in a limited way and the growth potential was evident.
Chabahar port handled 123 vessels and 1.8mn tonnes of bulk and general
47 IRAN Country Report May 2021 www.intellinews.com