Iran may be faced with US sanctions but that did not come in the way of India looking to further ramp up its economic ties with Tehran, with focus on connectivity, energy, trade and investment when PM Narendra Modi met Iranian President Hassan Rouhani on Saturday. The two countries signed nine agreements, including a lease contract which will allow an Indian company to take over operational control of facilities at Shahid Beheshti Port in Chabahar for 18 months.
Thanking Rouhani for Chabahar port development, Modi said India will support construction of the Chabahar-Zahedan rail link to allow Chabahar gateway’s potential to be fully utilised. “We want to expand connectivity, cooperation in the energy sector and the bilateral relationship,” said Modi.
The port project is important for India, as it will allow it to bypass Pakistan in accessing not just Afghanistan but also central Asian countries. The agreement is also a message to the US that India remains committed to Chabahar, located just 65 miles from China’s Gwadar port in Pakistan, despite the US threat to tighten sanctions on Iran.
Security cooperation was also on top of the agenda, with both countries coming down heavily on terrorism. Without naming Pakistan, Modi and Rouhani urged an immediate end to all support enjoyed by terrorists. They called for action against states that “aid and abet” terror.
India and Iran also signed an agreement for avoidance of double taxation and prevention of fiscal evasion “with respect to taxes on income”. “They agreed to undertake text-based negotiations on a preferential trade agreement as well as conclusion of a bilateral investment treaty,” said a joint statement.
India is now hoping Rouhani’s visit and Modi’s recent visit to Palestine will help dispel the notion that its West Asia policy is no longer on an even keel. For trade and investment, the two leaders recognised the need of an effective banking channel for business transactions. “It was noted that permission for Iranian Pasargadbank to open a branch in India was under consideration,” said the joint statement.
The government is looking to facilitate investment in Iran, which could aid Iran offset international sanctions. There was also focus on enhancing maritime cooperation.