India, Iran, Afghanistan sign the historic agreement

(160524) — TEHRAN, May 24, 2016 (Xinhua) — (From L to R) Indian Prime Minister Narendra Modi, Iranian President Hassan Rouhani and Afghan President Ashraf Ghani shake hands after their meeting at Saadabad Palace in Tehran, Iran, on May 23, 2016. Iran, India and Afghanistan signed a trilateral deal here on Monday to boost their regional trade and economic cooperation. The agreement, signed in the presence of Iranian President Hassan Rouhani, Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani, is to develop Iran’s Chabahar port, which would serve as a transit route connecting the three countries. (Xinhua/Ahmad Halabisaz)

An important agreement was signed by India, Iran and Afghanistan in Tehran on May 23.

The agreement includes a strategic transport corridor for creating a new route to Afghanistan via the Iran’s port of Chabahar, bypassing Pakistan.

After the signing agreement, Iranian President Hassan Rouhani, Indian Prime Minister Narendra Modi, and Afghan President Ashraf Ghani explained the details of the project.

Modi said, “The bilateral agreement to develop the Chabahar port and related infrastructure, and availability of about $500m from India for this purpose, is an important milestone. This major effort would boost economic growth in the region,” BBC reports.

“Considering all the credit lines that are going to come from India into the Chabahar port, it can very well turn into a very big symbol of cooperation between the two great countries of Iran and India,” Rouhani said.

Modi told this project will change the history of the region and create good relations between these three countries.

Chabahar will be used to ship crude oil and urea, saving India transportation costs. India intends to lease two berths at Chabahar for 10 years, Press TV reports.

Rivalry between India and China

The agreement might upset China and Pakistan. Chabahar is close to the Pakistani port city of Gwadar, which is being developed by China. The initiatives of India and China are accepted as a new type of rivalry in the region although some argue that India tries to keep balance.

The Wall Street Journal wrote, “The agreements come as Beijing is building a $46 billion economic corridor with Gwadar as its focal point, potentially redrawing the region’s geopolitical map. India opposes construction of part of that corridor in an area of the disputed Kashmir region that is governed by Pakistan but claimed by India.”

The trade volume between Iran and India in the past 11 months reached US$9 billion, according to Iran’s official IRNA news agency.