India is set to invest nearly Rs 4,000 crore to expand operations at Iran’s Chabahar Port, aiming for a five-fold increase in capacity to 500,000 TEUs (twenty-foot equivalent units) over the next decade.
To support this expansion, orders for five mobile harbour cranes have been placed. A second berth is also under consideration for expanded operations. Chabahar Port, funded by India, is projected to handle 100,000 TEUs by FY26, reaching near-full capacity. In FY25, the port is expected to handle around 75,000 TEUs, having already crossed 65,000 TEUs by January-end—matching FY24 levels.
Over the 10-year concession period, India Ports Global Ltd (IPGL), the Indian operator of Chabahar, plans to modernize the port and attract Indian shipping lines. Marketing efforts are underway to boost operational viability.
India’s Economic Survey 2024-25 highlighted Chabahar’s strategic role in connecting Mumbai to Eurasia via the International North-South Transport Corridor (INSTC), cutting transport costs and time. This has led to a 43% rise in vessel traffic and a 34% increase in container traffic for FY24.
In May 2023, IPGL signed a 10-year contract with Iran’s Ports and Maritime Organisation to equip and operate Chabahar’s Shahid Beheshti Terminal. India has increased grant assistance for port equipment to $120 million and committed a $250 million Line of Credit. Equipment worth $24 million has already been supplied, with further procurement ongoing.
India previously secured a US sanctions waiver for Chabahar due to its role in humanitarian aid to Afghanistan and regional trade connectivity. However, uncertainties remain over future waivers amid shifting US policies.
Beyond Chabahar, India is strengthening regional maritime influence. IPGL has taken control of operations at Myanmar’s Sittwe Port, a key component of the Kaladan Multimodal Transit Transport Project linking Bangladesh, Thailand, and Kolkata. Additionally, India is developing Sri Lanka’s Kankesanthurai Port, with plans for a ferry service between Nagapattinam and Kankesanthurai to enhance trade and passenger connectivity.