Speed-up assistance or lose Chabahar, hints Iran

On Chabahar port, the Shipping Ministry moved a Cabinet note for providing $150 million as line of credit but that got held up as India wanted that the draft contract retain a reference to India content.

 

Chabahar port is located in Sistan-Balochistan Province on Iran’s southeastern coast and is of great strategic utility for India which will get sea-land access route to Afghanistan bypassing Pakistan.

 

 

Now out of the harsh Western sanctions, Iran has hinted to India that it could lose out on Chabahar port and the associated railway line to Zahedan if there was further delay by New Delhi in providing monetary support for them.

 

“A number of economic projects with Iran are required to be implemented at the earliest. The Iranian government has stressed to us at high levels the urgency to extend the necessary financial support for these projects without further delay,” India’s foreign ministry informed the linked ministries last week.

 

While scheduling an inter-ministerial meeting — to be chaired by Foreign Secretary — later this week, the Ministry of External Affairs told the ministries to consider expediting the lines of credit under consideration as well as altering the existing payment mechanism for crude oil imports.

 

“Separately, the lifting of sanctions will require modifications in the existing arrangements for payment for 

India’s oil imports from Iran,” it wrote. The agreement would need to be amended to allow Iranians to collect their entire payment in dollars as the existing one allows 45 per cent of the dues to be paid in rupees.

 

India’s urgency to arrive at a favourable response follows the planned visit of Iran’s Deputy Foreign Minister for Asia & Pacific Ebrahim Rahimpour on February 4 to hold Foreign Office Consultations with the MEA.

 

Just days after the US lifted the sanctions, Iranian envoy Gholamreza Ansari said that India’s Iran policy was marked by unnecessary caution and that New Delhi could not follow the policy of patient waiting any more in the changed circumstances.

 

“I feel private companies in India are keen to move ahead in the Chabahar port project but the government has not shown the same level of enthusiasm in the past,” he said.

 

Since last August, Iran has been asking for $345 million as credit for the steel/railway project and $150 million for equipment purchases for Chabahar port. 

However, these loans got delayed following India’s Exim Bank’s refusal to get directly involved during the tenure of western sanctions.

 

India, in principle, agreed to provide buyer’s credit under the National Export Insurance Account (NEIA) for the steel/rail projects but that got stalled as Finance Ministry wanted more clarity on its “strategic importance” as well as the “Indian content” to make available concessional finance to Indian firms.

 

On Chabahar port, the Shipping Ministry moved a Cabinet note for providing $150 million as line of credit but that got held up as India wanted that the draft contract retain a reference to India content.

 

New Delhi has already delayed concluding the commercial contract for the port — considered both a strategic and an economic asset — set for November 5 last year as both governments signed an MoU last May setting a deadline for signing the detailed contract within six months.