Following lifting of sanctions against Iran in January, India has been eyeing deeper energy ties and has already lined up $20 billion as investment in oil and gas as well as petrochemical and fertiliser projects there. So the centrepiece of prime minister Narendra Modi’s two-day visit will be the contract for commissioning the first phase of the strategic Chabahar port.
Chabahar in South-East Iran will help India skip Pakistan and open up a route to land-locked Afghanistan with which New Delhi has developed close security ties and economic interests.
From Chabahar port, the existing Iranian road network can link up to Zaranj in Afghanistan, from there the Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan’s Garland highway. This would give India road access to four major cities; Afghanistan-Herat, Kandahar, Kabul and Mazar-e-Sharif.
Indian investment in phase-1 will be in excess of $200 million, including $150 million line of credit from Exim Bank, an agreement for which would also be signed during the visit.
Besides signing of commercial contract for Chabahar Phase-1, Modi will witness signing of a trilateral agreement on transport and transit corridor among India, Afghanistan and Iran.
Sources said business talks will also feature securing rights for ONGC Videsh to develop the offshore Farzad-B gas field, in Iran.
Bilateral talks began today morning as Modi meets President Hassan Rouhani. On the agenda are regional connectivity, infrastructure and energy as well as terrorism and extremism in the region.
Discussions will also feature the pending payment of $6.4 billion that Indian refiners Essar Oil and MRPL owe Iran for past oil dues. As a goodwill gesture ahead of prime minister Narendra Modi’s visit to the Persian Gulf country, India has agreed to pay 1.5% interest on the dues and the refiners have cleared a payment of $1.2 billion.