What does the Indo-Iran Chabahar port deal mean for Armenia? |

armenian weekly

byYeghia Tashjian

On May 13, 2024, Iran and India signed Historic Transactions Under the agreement, New Delhi was awarded the right to develop and operate Chabahar Port, Iran Gwadar Port on the Gulf of Oman is a must-go for India, which has coveted the port for the past 20 years, hoping to use it to export goods to Iran, Afghanistan and Central Asian countries, thereby bypassing the Chinese-developed ports of Gwadar and Karachi in Pakistan.

What does this deal mean for India and Iran?

Commenting on the agreement after the signing ceremony in Tehran, Indian Shipping Minister Sarbananda Sonowal said: “The importance of Chabahar Port goes beyond its role as a gateway between India and Iran; it is a vital trade artery connecting India with Afghanistan and Central Asian countries.” Under the agreement, Indian Ports Global Limited (IPGL) will invest $120 million in the port and raise an additional $250 million in financing. In this context, Indian External Affairs Minister Jaishankar The deal will open the way for new and larger investments at the port, he told reporters in Mumbai.

At the same time, Iranian scholar Foad Izadi believes industry The agreement “holds great promise as it exploits Iran’s strategic position as India’s gateway to Central Asia and Russia through the North-South Corridor.” Izadi went on to say that with China’s growing interest in the region, India’s active involvement is a “strategic countermeasure” aimed at safeguarding its interests and consolidating its economic and political influence. The Iranian scholar added that the agreement is a calculated move by India to “establish its presence in the region, take advantage of booming economic opportunities, and strategically counterbalance China’s influence.”

Izadi believes that for India, developing diplomatic and economic relations will maintain its economic growth. In addition, India’s defense exports have increased significantly due to increased demand, and Izadi believes that the Chabahar Port can help expand New Delhi’s defense exports. Finally, the deal also reflects India’s autonomous foreign policy, which aims to establish new partnerships with emerging global powers and consolidate its position “as a discerning and influential player in international affairs.” Of course, the deal may still face challenges. U.S. State Department Deputy Spokesperson Vedant Patel has already stated that Washington will continue to impose sanctions on anyone who considers “doing business with Iran.”

It is not surprising that Iran is slowly but significantly returning to the South Caucasus and Central Asia through its integration into regional economic and transportation projects. The agreement could further consolidate Iran’s position in the South Caucasus and Central Asia, strengthen its role as a regional transit country, and enhance its economic ties with Russia. At the same time, by bringing India closer to Russia, Iran would benefit from escaping economic isolation and increasing its geo-economic and geopolitical presence in the region. Finally, Iran could use this opportunity to counter US influence in the Persian Gulf and surrounding regions. Notably, the project was announced just weeks after Turkey, Iraq, Qatar, and the UAE announced ambitious Belt and Road projects. Development Road Project Connecting the Persian Gulf to Türkiye via Iraq, bypassing Iran.

Why is the Chabahar port deal important to Armenia?

Armenia will also benefit from the agreement. Iran allowed entry Armenia operates the ports of Chabahar and Bandar Abbas to boost trade with India. After the 2020 Artsakh war, Armenia aims to diversify its security partners and has turned to India for defense cooperation and arms purchases. Tehran and New Delhi have been supportive of Yerevan’s desire to assist in the development and use of Iranian ports. Trilateral Cooperation It will significantly improve Armenia’s transit infrastructure and increase the geo-economic importance of each country in the South Caucasus within the Black Sea-Persian Gulf corridor. In 2023, Mnatsakan Safaryan, former Deputy Foreign Minister of Armenia, said that the Port of Chabahar is an integral component of Armenia’s quest to gain access to Indian and Asian markets through the International North-South Transport Corridor (INSTC). As Yerevan positions itself as a transit country for Iran and India to enter the Eurasian Economic Union (EAEU) and European markets, its economy will grow significantly due to international trade.

Commenting on the agreement, Yerevan-based Armenia-India Business Council The Indian All-Iran Chamber of Commerce (AIBC) said: “This strategic alliance not only highlights the deepening economic cooperation between India and Iran, but also highlights India’s strategic vision to enhance connectivity and trade facilitation in the region.” The council also said that the agreement also opens up new opportunities for Armenian importers and businesses and will promote trade between Yerevan and New Delhi.

at the same time Reaching an Agreement The remaining section of the railway connecting Azerbaijan and Iran is being built between Moscow and Tehran, and Tehran is eager to bring Armenia on board. In October 2023, Yerevan and Tehran signed a protocol Under the agreement, Iranian construction companies will build a 32-kilometer-long road in the southern part of Armenia’s North-South Transport Road Corridor. Kajalan Town to Agarak Village The Abu Dhabi Bridge in Syunik will be built in 1960 and will include a 920-meter-long tunnel, five flyovers, six overpasses and 17 bridges. The project is expected to be completed in 2026, and the Armenian government will borrow $254 million from the European Bank for Reconstruction and Development and award a $215 million contract to a consortium of two Iranian companies. About two-thirds of the road will be expanded and renovated, and the remaining 11 kilometers will be built within three years.

This move will reduce travel time between the two countries and is part of Armenia’s ambitious project to become a bridge between Iran and Georgia, connecting Black Sea ports with ports on the Persian Gulf. This road is of strategic importance to Armenia as it can consolidate Armenia’s security and bring stability to the region. Finally, Armenia’s participation in this transit project will increase the country’s geo-economic importance on regional transit routes, ease its isolation, and balance the Turkey-Azerbaijan axis by benefiting from the active role and involvement of Iran and India in the South Caucasus.