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Eye on China, rush to seal Iran port deal

India is rushing to conclude a $80-billion deal with Iran to build two berths at the strategic Chabahar port as Tehran edges closer to ridding itself of crippling economic sanctions and woos New Delhi's rivals like Beijing.

By CHARU SUDAN KASTURI
  • Published 29.12.15
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Tayyebnia with Sushma at a meeting in New Delhi over the weekend. (PTI)

New Delhi, Dec. 28: India is rushing to conclude a $80-billion deal with Iran to build two berths at the strategic Chabahar port as Tehran edges closer to ridding itself of crippling economic sanctions and woos New Delhi's rivals like Beijing.

Iran's influential minister of economic affairs and finance, Ali Tayyebnia, visited New Delhi last weekend for the first ever meeting of a new trade-cum-diplomatic mechanism set up by the two countries in a bid to inject speed in long-stuck projects like Chabahar.

Tayyebnia's visit was overshadowed by Prime Minister Narendra Modi's trips to Russia and Afghanistan, and his surprise stopover at Lahore to meet his Pakistan counterpart Nawaz Sharif.

But the Iranian minister's visit was a key part of a fresh thrust by the Modi government to ensure it corrects a perception in Tehran that New Delhi remains slow and non-committal on key strategic and infrastructure projects, senior officials told this newspaper.

Transport minister Nitin Gadkari had visited Iran in April to ink a memorandum of understanding (MoU) on the Chabahar project, weeks before Russia, China and the West reached a breakthrough agreement with Tehran over its nuclear programme. The US and the European Union, which had imposed a series of sanctions against Iran over suspicions that Tehran was developing a nuclear bomb, are now set to withdraw many of the sanctions in January.

But India needs to conclude a contract with Iran, based on the MoU, to seal the deal. The lifting of sanctions against Iran would make it easier for a slew of countries to do business with the country, and India is worried China could step in if it sits on its commitment to Tehran.

"Had comprehensive discussions with Dr. Ali Tayyebnia," Modi tweeted after their meeting on Saturday, also attended by national security adviser Ajit Doval and foreign secretary S. Jaishankar.

The Chabahar port is a potential gateway to land-locked Afghanistan and Central Asia, and India is exploring the possibility of also using the port as a base for its military ships to stop by. The two berths at the port will allow India to counter China's influence in the region through the Gwadar port in Pakistan that Beijing built.

Economically, the port would open up a trade-and-transit route connecting up with an International North South Transport Corridor piloted by Russia, impacting New Delhi's trade with not just Tehran but also with Moscow.

The berths at Chabahar would also allow India a route to trade with Afghanistan bypassing Pakistan. India has asked Pakistan and Afghanistan to extend their trade-and-transit agreement to India, but Islamabad remains reluctant.