India is helping develop the Chabahar Port, which will give it access to the oil and gas resources in Iran and the Central Asian states. By doing so, India hopes to compete with the Chinese, who are building Gwadar Port, in Pakistani Baluchistan. In 2014, Indian government sanctioned an initial amount USD 85 million for the development of Chabahar port.

Iran plans to use Chabahar for transshipment to Afghanistan and Central Asia, while keeping the port of Bandar Abbas as a major hub mainly for trade with Russia and Europe.

India, Iran and Afghanistan have signed an agreement to give Indian goods, heading for Central Asia and Afghanistan, preferential treatment and tariff reductions at Chabahar.

Work on the Chabahar-Milak-Zaranj-Dilaram route from Iran to Afghanistan is in progress. Iran is, with Indian aid, upgrading the Chabahar-Milak road and constructing a bridge on the route to Zaranj. India's BRO is laying the 213-kilometer Zaranj-Dilaram road. It is a part of India's USD 750 million aid package to Afghanistan.

The Chabahar port project is Iran's chance to end its US-sponsored economic isolation and benefit from the resurgent Indian economy. Along with Bandar Abbas, Chabahar is the Iranian entrepot on the North-South corridor. A strategic partnership between India, Iran and Russia is intended to establish a multi-modal transport link connecting Mumbai with St. Petersburg, providing Europe and the former Soviet republics of Central Asia access to Asia and vice versa.

India and Iran are discussing building a gas pipeline between the two countries along the bed of the Arabian Sea to bypass Pakistan, using the Chabahar port. Both the countries are pondering the delivery of natural gas produced in Turkmenistan with Indian assistance to north Iran while the Islamic Republic will send natural gas from its southern deposits to Indian consumers. This pipeline is conceived by India to replace the proposed Iran-Pakistan-India gas pipeline, the negotiations for which have dragged on due to the worsening of relations between India and Pakistan.

Chabahar Port
Chabahar Port
Chabahar Port