On cue: Iran asks India to invest $8 billion

BY ASIA UNHEDGED 

Iran isn’t wasting any time.

Even before the US Congress approves the recent nuclear arms treaty with Iran, its president, Hassan Rouhani, is asking India to invest in infrastructure projects worth $8 billion. The proposal includes an expanded role in developing Chabahar, a strategic port that will open up access to Central Asia, Iran’s envoy to New Delhi said on Friday, according to Reuters.

Rouhani met with India’s Prime Minister Narendra Modi at the emerging markets economic summits in Russia this month. This occurred before the historic nuclear deal between Iran and six world powers was finalized, Iran’s ambassador to India told Reuters. If approved, the nuclear deal would end most economic sanctions on Iran.

Iran’s Chabahar port

India’s foreign ministry didn’t respond to a request for comment, so Modi’s response to the offer remains unknown.

Expecting that the sanctions will be lifted soon,Tehran is making up for lost time. It’s trying to find investment opportunities and launch projects that have been stalled for years because of the sanctions.

In particular, Iran wants to improve transport links in Central Asia. The port of Chabahar on the Gulf of Oman near Iran’s border with Pakistan has been one of these dormant projects. India and Iran agreed to develop the port in 2003.

The move not only helps kick-start the Iranian economy — it helps India economically outflank  archrival Pakistan. Chabahar allows India to circumvent Pakistan as an entry point into landlocked Afghanistan, where Delhi has developed close security ties and economic interests. It also provides a strategic hub for China’s New Silk Road project.

“The potential between Iran and India is great but we were just facing such a wall of sanctions, wall of American pressure,” ambassador Gholamreza Ansari told Reuters. “Connectivity is the main policy of Modi that coincides with Iran’s government policy. We have offered them, in connectivity, $8 billion of projects.”

In May, India’s Shipping Minister Nitin Gadkari and his Iranian counterpart, Abbas Ahmad Akhoundi, signed an $85 million deal for India to lease two existing berths at the port and use them as multi-purpose cargo terminals, said Reuters. Under the new proposal India could help build second and third terminals at the port, as well as railway connections into the rest of Iran, Ansari said.