India is stepping up its game and presence in the Middle East as it signed a ten-year contract with Iran to manage the Chabahar port on Monday.

The signing of this pact will give India greater leverage in the Middle East and also cut out Pakistan and China strategically. In terms of power play, this latest development is a diplomatic win for India.

The Indian embassy in Iran tweeted, “The signature of this contract will have a multiplier effect on the viability and visibility of Chabahar port.”

Indian company India Ports Global Ltd (IPGL) will also invest approximately 120 million USD in Chabahar Port. India has also offered an INR credit window equivalent to USD 250 million, for mutually identified projects aimed at improving Chabahar- related infrastructure.

India has been developing part of the port in Chabahar on Iran’s southeastern coast along the Gulf of Oman as a means to transport goods to Iran, Afghanistan and central Asian countries. The significance of Chabahar is that it allows India to effectively bypass the port of Karachi and Gwadar in Pakistan. The sanctions placed by the United States on Iran, however, slowed progress on the port.

It had been reliably learnt that there are plans to connect Chabahar with the International North South Transport Corridor (INSTC), which links India with Russia via Iran. This will ultimately allow India to bypass Pakistan and access Afghanistan and ultimately Central Asia. This agreement between New Delhi and Iran will also be a setback to China’s ambitious Belt Road Initiative (BRI).

It is also significant to note here that India, which has maintained its ties with Iran, despite pressures by the US, has again displayed confidence in pursuing a foreign policy that suits its national interests. It’s an interesting play of diplomacy where India today shares a partnership with the US but also manages its ties with US foes like Iran.

The fact that the Shipping Minister made this trip while India is in a critical phase of elections underlines the significance the country attaches to this agreement. India has pledged it would invest 85 million USD in the terminal and has so far supplied cranes and some other equipment worth some 24 million USD. – The writer is Executive Editor of Nrifocus.com