Muscat (Agencies): A senior government official revealed on Tuesday that India and Iran have agreed to refer any arbitration cases related to the operation of the strategically significant Chabahar port to a three-member arbitration panel based in Muscat. This decision comes in the wake of India signing a 10-year contract on Monday to manage the crucial Iranian port of Chabahar.

The official stated, “Major concerns, including lack of consensus on an arbitral framework, have been addressed. As per the agreement signed on Monday, matters requiring arbitration with regard to operation of the Chabahar port, will be referred to a three-member arbitration tribunal based in Muscat in accordance with the Singapore International Arbitration Centre (SIAC).”

The International North-South Transport Corridor road and rail project, bypassing Pakistan, will enable Indian commodities to reach landlocked Afghanistan and Central Asia through the Chabahar port on the Gulf of Oman. This project was initiated by India back in 2003.

The official further added that plans are now underway to build a railway line that would link Afghanistan with Chabahar port. The construction of the port had been hampered due to Iran’s previous refusal to accept an international arbitration system, citing the necessity for a constitutional amendment, and US sanctions on Iran over its alleged nuclear program.

The Port & Maritime Organization of Iran, an official body, and Indian Ports Global Limited (IPGL) signed the long-term deal. IPGL will invest about USD 120 million, and an additional USD 250 million will be raised in debt.

The agreement was signed in Tehran, witnessed by Iranian Minister of Transportation and Urban Development Mehrdad Bazrpash and Indian Minister of Ports, Shipping, and Waterways Sarbananda Sonowal. This new agreement replaces the original 2016 agreement, which covered India’s operations at the Shahid Beheshti terminal in the port of Chabahar and was annually renewed.

India used the Chabahar port last year to ship 20,000 tons of wheat supplies to Afghanistan and in 2021 to provide Iran with environmentally acceptable herbicides. This marks the first time India is taking over the operation of an overseas port in an attempt to directly tap into the potential in Central Asia without going through neighboring Pakistan. This will also have a multiplier impact on trade among India, Iran, and Afghanistan.

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