Robert Harneis –TDO- (FRANCE) Iranian President Hassan Rouhani has signed a series of agreements with Indian President Narendra Modi, the most important of which is the leasing to India of part of the port of Chabahar. The development will provide much-needed relief to the Iranians port of Bandar Abbas which currently handles 85% of Iran’s sea-borne trade.
India will also invest in the Iranian railway system with the line moving north from Chabahar through Zahedan to Masshad near the Turkmenistan frontier. There will be a branch line running to Zaranj in Afghanistan. India will also provide engines and rolling stock for the new railway.
The new line will provide India with a secure route to the central Asian republics and ultimately to Russia and is part of the north-south corridor originally planned with Russia in 2002. The troubled relations with China and Pakistan have meant that India has not wished to be part of the One Belt One Road initiative. China is currently developing the Pakistani port of Gwadar to the east, on the other side of the Iran Pakistani border.
To avoid falling foul of possible United States sanctions, India will pay Iran directly in rupees thus avoiding any transactions in dollars. During the worst of the sanctions against Iran, India purchased oil from Iran, paying for it in trade goods such as washing machines and gold. The transactions were conducted with the assistance of Turkish banks.
It would seem that the two leaders have also come to an agreement on a joint development of the Farzad-B gas field in the Persian Gulf, after difficult negotiations.
The North-South corridor, when built, is expected to significantly reduce the time of cargo transport from India to Central Asia and Russia. At present, it takes about 40 days to ship goods from Mumbai in India to Moscow. The new route will be able to cut this time to 14 days. The corridor will also bypass the overloaded and expensive Suez Canal.
The most dramatic project under consideration as part of the corridor is the proposal for a canal, known as Inranrud (river of Iran) linking the Caspian Sea with the Persian Gulf across Iran.