https://sputniknews.in/20230705/irans-sco-membership-to-attract-investments-to-chabahar-experts-say-2846273.html
Iran’s SCO Membership to Attract Investments to Chabahar, Experts Say
Iran’s SCO Membership to Attract Investments to Chabahar, Experts Say
Sputnik India
The formalization of Iran’s membership in the Shanghai Cooperation Organization (SCO) will lead to more private investment in Chabahar port and lead to its full activation.
2023-07-05T16:32+0530
2023-07-05T16:32+0530
2023-07-05T16:32+0530
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The formalization of Iran’s membership in the Shanghai Cooperation Organization (SCO) will lead to more private investment in Chabahar port and lead to its full activation, experts have told a video bridge on ‘Results of the SCO Summit: A View from Moscow and Delhi’ organized by Sputnik.Chenoy suggested that a possible remedy to lack of private investments in Chabahar could be the utilization by Moscow of billions of Indian rupees which have been lying unused in Russian bank accounts since last year.The veteran Indian academic also proposed the use of currency swap transactions as means to expedite investments to Chabahar as well as the INSTC.Ashwani Mahajan, the co-convenor of Indian advocacy group Swadeshi Jagran Manch (SJM), also expressed confidence that the SCO membership of Iran would “pave the way for development of Chabahar”.Anil Trigunayat, a former Indian Ambassador, told Sputnik that Iran was “critical” in boosting connectivity to land-locked central Asia and was also an “an energy-rich country”.New Delhi has said that its “vision” is to link the Chabahar port to the Russia-backed INSTC, a 7,200-kilometre multimodal corridor linking Russia to India through Central Asia and Iran.The proposal to develop the INSTC was first floated by Russia, India and Iran in 2000. However, it was only in last July that the first train carrying cargo destined for India arrived in Iran through the INSTC. The India-bound cargo was transported from Iran to India through the Bandar Abbas Port.Another cargo train arrived in Iran last September through the INSTC route.In May, Moscow committed an investment of $1.74 billion to develop the Rasht-Astara Railroad linking Azerbaijan and Iran. The railway route is deemed as being critical for further development of the INSTC.‘Lot of Interest from Russia, India and Iran’Vladimir Evseev, the head of Department of Eurasian Integration and Department of the SCO of the Institute of CIS Countries, said that the that the “value of the corridor” has increased manifold since it was first announced several decades back.Evseev recalled that the INSTC was launched in order to get Indian goods to the European market but that prospect has become difficult in the wake of Moscow’s special military operation in Ukraine.He also said that the Chabahar port must be “fully developed” to deepen the regional integration process.Chenoy said that the “geopolitical situation” has changed in recent years and that there was a “lot of interest” from Russia, India and Iran in fully activating the corridor.At the SCO Council of Heads of State meeting hosted under the Indian presidency in virtual mode, Prime Minister Narendra Modi said that the INSTC could "secure and efficient route for landlocked countries in Central Asia to access the Indian Ocean",Raisi said that Tehran was “determined” to complete the transit route.Is Chabahar Port Project Facing Any Issues?Prime Minister Modi earmarked $500 million for developing the Chabahar port’s Shahid Beheshti terminal during his visit to Tehran in 2016.From New Delhi’s perspective, the port is crucial since it provides it connectivity to markets of central Asia and beyond and bypasses Pakistan.India, Afghanistan and Iran have signed a “Establishment of International Transport and Transit Corridors” pact to facilitate movement of goods through Chabahar to central Asia states.However, former US President Donald Trump’s decision to pull out of Joint Comprehensive Plan of Action (JCPOA), or the 'Iran Nuclear Deal’, triggered fears of “secondary” US sanctions among private Indian companies despite the fact that the port of Chabahar were exempted from Washington’s sanctions.New Delhi-backed India Ports Global Limited (IPGL), which has been running Chabahar’s operations since 2018, has said that the tender for acquiring cranes have found no bidders, prompting the company to extend the deadline on multiple occasions.
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Iran’s SCO Membership to Attract Investments to Chabahar, Experts Say
Addressing the SCO leaders' summit, Indian Prime Minister Narendra Modi called for realizing the “full potential” of the Chabahar port and INSTC as Tehran became grouping’s ninth member.
The formalization of
Iran’s membership in the
Shanghai Cooperation Organization (SCO) will lead to more private investment in
Chabahar port and lead to its full activation, experts have told a video bridge on
‘Results of the SCO Summit: A View from Moscow and Delhi’ organized by Sputnik.“There is a lot of economic potential in developing both the Chabahar Port and the International North South Transport Corridor (INSTC). The INSTC links not only India and Russia, but also the markets in central Asia… More private investments into the Chabahar port should be coming with Iran’s membership,” Anuradha Chenoy, the former dean of School of International Studies (SIS) at New Delhi-based Jawaharal Nehru University (JNU), said in response to a question from Sputnik.
Chenoy suggested that a possible remedy to
lack of private investments in Chabahar could be the utilization by Moscow of billions of Indian rupees which have been lying unused in Russian bank accounts since last year.
The veteran Indian academic also proposed the use of currency swap transactions as means to expedite investments to Chabahar as well as the INSTC.
Ashwani Mahajan, the co-convenor of Indian advocacy group Swadeshi Jagran Manch (SJM), also expressed confidence that the SCO membership of Iran would “pave the way for development of Chabahar”.
“We would welcome the use of domestic currencies in trade settlements in the SCO,” Mahajan stated.
Anil Trigunayat, a former Indian Ambassador, told Sputnik that Iran was “critical” in boosting connectivity to land-locked central Asia and was also an “an energy-rich country”.
“India has already enhanced the capacity at the Shahid Beheshti terminal at Chabahar port from 2.5 million tonnes to 8.5 million tonnes,” Trigunayat underlined.
New Delhi has said that its “vision” is to link the Chabahar port to the Russia-backed INSTC, a 7,200-kilometre multimodal corridor linking Russia to India through Central Asia and Iran.
The proposal to develop the INSTC was first floated by Russia, India and Iran in 2000. However, it was only in last July that the first train carrying cargo destined for India arrived in Iran through the INSTC. The India-bound cargo was transported from Iran to India through the Bandar Abbas Port.
Another cargo train arrived in Iran last September through the INSTC route.
In May, Moscow committed an investment of $1.74 billion to develop the Rasht-Astara Railroad linking Azerbaijan and Iran. The railway route is deemed as being critical for further development of the INSTC.
‘Lot of Interest from Russia, India and Iran’
Vladimir Evseev, the head of Department of Eurasian Integration and Department of the SCO of the Institute of CIS Countries, said that the that the “value of the corridor” has increased manifold since it was first announced several decades back.
Evseev recalled that the INSTC was launched in order to get Indian goods to the European market but that prospect has become difficult in the wake of Moscow’s special military operation in Ukraine.
He said that the “profitability of the corridor” must be taken into account, since a majority of India-Russia bilateral trade last year comprised Russian crude transported to India through the sea route. “However, the trade corridor will become more relevant if one factors in potential trade among other countries lying on the route of INSTC and not just India.”
He also said that the Chabahar port must be “fully developed” to deepen the regional integration process.
Chenoy said that the “geopolitical situation”
has changed in recent years and that there was a “lot of interest” from Russia, India and Iran in fully activating the corridor.
At the SCO Council of Heads of State meeting hosted under the Indian presidency in virtual mode, Prime Minister Narendra Modi said that the INSTC could "secure and efficient route for landlocked countries in Central Asia to access the Indian Ocean",
Similarly, Iranian President Ebrahim Raisi underlined in his speech that the Chabahar Port “plays an “irreplaceable role” in connecting the landlocked nations of central Asia to the Indian Ocean.
Raisi said that Tehran was “determined” to complete the transit route.
Is Chabahar Port Project Facing Any Issues?
Prime Minister Modi earmarked $500 million for developing the Chabahar port’s Shahid Beheshti terminal during his visit to Tehran in 2016.
From New Delhi’s perspective, the port is crucial since it provides it connectivity to markets of central Asia and beyond and bypasses Pakistan.
India, Afghanistan and Iran have signed a “Establishment of International Transport and Transit Corridors” pact to facilitate movement of goods through Chabahar to central Asia states.
However, former
US President Donald Trump’s decision to pull out of
Joint Comprehensive Plan of Action (JCPOA), or the
'Iran Nuclear Deal’, triggered fears of “secondary” US sanctions among private Indian companies despite the fact that the port of Chabahar were exempted from Washington’s sanctions.
New Delhi-backed India Ports Global Limited (IPGL), which has been running Chabahar’s operations since 2018, has said that the tender for acquiring cranes have found no bidders, prompting the company to extend the deadline on multiple occasions.
Chenoy underlined that New Delhi’s “concerns” on secondary sanctions should be taken into account as the countries move ahead on developing the crucial port as well intensify engagement on INSTC.
