Chabahar Port Expansion and Rail Link Progress

Chabahar Port Expansion and Rail Link Progress

Why in the News ?

India and Iran are accelerating efforts to expand Chabahar Port and connect it to Iran’s railway network by mid-2026. This move aims to enhance regional connectivity under the International North-South Transport Corridor (INSTC) and boost access to Central Asia and Eurasia.

Infrastructure Expansion and Strategic Goals:

• India Ports Global Limited (IPGL), an Indian state-run firm, operates Iran’s Chabahar Port.
• Expansion is underway to increase capacity from 100,000 TEUs to 500,000 TEUs.
• Simultaneously, 710 km of railway tracks connecting Chabahar to Zahedan are being developed to link the port to Iran’s national rail network.
• Completion of both the port and railway projects is targeted for mid-2026.

Geopolitical and Economic Implications

• The port will act as a gateway to the International North-South Transport Corridor (INSTC), providing India access to Central Asian and Eurasian markets.
• Pressure on India to cut tariffs and relax non-tariff barriers.
• These FTAs could affect domestic producers and widen the trade deficit in agriculture.

India-Iran Cooperation and Investment

• A 10-year bilateral agreement was signed last year for operations at Shahid Beheshti terminal of the port.
• India has committed $120 million investment for equipment and offered $250 million in credit for development-related activities.
• Recent discussions during Iranian Deputy Foreign Minister Abbas Araghchi’s visit to Delhi reaffirmed mutual commitment to the port’s full development.