India is making big plans to expand its presence at Iran’s Chabahar Port. The government has decided to invest nearly INR 4,000 crore to improve the port’s capacity and modernise its operations. According to officials from the Ministry of Shipping, the aim is to increase
container handling at the port to 500,000 TEUs (twenty-foot equivalent units) over the next ten years. To make this happen, India Ports Global Ltd (IPGL) has already ordered five mobile harbour cranes, which will be delivered over the next three to five years.
At the moment, Chabahar Port’s Shahid Beheshti terminal, operated by IPGL, is expected to handle about 75,000 TEUs of container traffic this financial year. By the end of January, the port had already handled over 65,000 TEUs, which was equal to the total handled last year. In comparison, it had managed just over 64,000 TEUs in the previous financial year and only around 9,000 TEUs the year before that.
Officials explained that during the 10-year concession period, the goal is to reach 500,000 TEUs. The government plans to spend INR 4,000 crore on equipment and other improvements, and efforts are being made to attract Indian shipping companies to use the port.
Marketing activities are also underway to ensure that the port becomes successful and profitable.
India’s Economic Survey for 2024-25 mentioned that Chabahar Port has already improved trade links between Mumbai and Eurasia through the International North-South Transport Corridor (INSTC). Thanks to this connection, vessel traffic at the port went up by 43%, and container traffic increased by 34% during the last financial year.
Earlier, in May, IPGL signed a 10-year contract with Iran’s Ports and Maritime Organisation to operate the Shahid Beheshti terminal.
India also increased its grant assistance to USD 120 million for supplying equipment and committed a Line of Credit of USD 250 million in rupee equivalent to help develop the port further. So far, India has supplied port equipment worth about USD 24 million, and more
equipment is on the way.
There are concerns about potential changes in US sanctions. India had earlier received a waiver from US sanctions on Chabahar Port because of its importance in providing humanitarian aid to Afghanistan and offering new trade routes to Central Asia. However, earlier this month, former US President Donald Trump signed an executive order asking for a review of these waivers, which could affect India’s future plans at the port.
A senior official mentioned that the situation is still uncertain, but India has already placed orders for equipment, and discussions are ongoing between the Shipping Ministry and the Ministry of External Affairs. During the contract negotiations, India had asked not to include a minimum guaranteed traffic (MGT) clause, which means there are no penalties if traffic targets are not met. However, the agreement does include traffic targets that will be reviewed after five years, depending on market conditions.
Chabahar Port is an important project for India as it provides a gateway to Central Asia and Russia through the INSTC. Under the agreement, IPGL expects to handle 30,000 TEUs in the first year, growing to 140,000 TEUs by year five and 300,000 TEUs by year ten.
Revenue from exports will be shared equally between IPGL and Iran, while Iran will get 60 per cent of the revenue from imports.
In addition to Chabahar, India is strengthening its presence at other regional ports. In Myanmar, IPGL has taken control of Sittwe Port, which is part of the Kaladan Multimodal Transit Transport Project. This project aims to link India with Bangladesh, Thailand, and Kolkata, helping to improve trade routes in South-East Asia as part of India’s Act East Policy.
Further south, India is working on developing Kankesanthurai Port in Sri Lanka. This project will increase trade between the two countries and bring back passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka.
Despite the uncertainty in global trade and changing geopolitical conditions, India is pushing ahead with its plans to expand regional ports. Officials said that the ongoing investments will help modernise these ports, increase capacity, and strengthen India’s trade connections across the region.
