India, Iran sign pact during Rouhani visit on leasing port

NEW DELHI (Reuters): India and Iran on Saturday signed agreements including Tehran leasing to New Delhi operational control of part of the Iranian east coast port of Chabahar for 18 months.

The $85 million project, just 90 km from the China-sponsored Gwadar port in Pakistan, creates a transit route between India, Iran and Afghanistan, bypassing Pakistan.

India is trying to develop Chabahar as a way to gain access to the markets of central Asia as well as Afghanistan.

But progress is slow because of concern that U.S. President Donald Trump’s administration in Washington may eventually scrap the Iran nuclear deal.

A leasing agreement giving operational control to India of Shahid Beheshti port - phase one of the Chabahar port - was signed in the presence of Prime Minister Narendra Modi and Iranian President Hassan Rouhani.

Later, addressing a joint press conference with the Iranian president, Modi said both countries wanted to expand bilateral ties and cooperation in economic development. “We will support the construction of the Chabahar-Zahedan rail link so that Chabahar gateway’s potential could be fully utilised,” Modi said.

 “We want to expand connectivity, cooperation in the energy sector and the centuries-old bilateral relationship.”

Other agreements included a double taxation avoidance treaty, extradition, and cooperation in the farm sector.

Rouhani, who arrived in Hyderabad on Thursday, will later address industrialists.