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Why Iran’s Chabahar Port is so important for Trade?

Opening up first Afghan-Iran-India Transport Route with TIR

Why Iran’s Chabahar Port is so important for Trade?
First consignment opening ceremony at Zaranj in Nimroz, Afghanistan, attended by President Ashraf Ghani and Ambassadors from Iran and India and representatives from other countries.
Jorge Cachinero el

 

Afghanistan-Iran-India trade corridor

Last February 24th, a successful pilot TIR operation from Nemroz in Afghanistan via Iran to India established a new, reliable intermodal access route for trade across the region.

It took only 2 days for 23 containers (containing 570 tonnes of goods including moth beans and talc stones) to be shipped under the TIR system from Afghanistan to Chabahar Port.

After this, they continued their journey towards the Indian ports at Mumbai and Mundra.

Chabahar Port is a seaport in Chabahar, located in south eastern Iran, on the Gulf of Oman.

It is Iran’s only oceanic port and comprises two separate ports named Shahid Kalantari and Shahid Beheshti – each of which has five berths.

As of this week, Chabahar Port is now a critical TIR trade gateway to and from India, linking the country to Afghanistan, Central Asia, Russia and eventually Europe.

It is the only Iranian port with direct access to the Indian Ocean.

The port is so important that the US has confirmed that Chabahar is exempt from its sanctions, with the aim to help Afghanistan’s economic development and facilitate India’s investment in the port.

The port is 90kms closer than Bandar Abbas, and reduces the sea and land transport time to Afghanistan, and according to the Afghan Ministry of Transport, Afghan goods will arrive 20% faster.

Also, since India is one of the main sources of Afghanistan’s imports, Chabahar reduces transport costs by up to a third for Afghan businesses.

India is one of the main sources of Afghan imports and exports.

In 2017, imports to Afghanistan from India were at 353,389 tonnes, and exports to India were at 356,139 tonnes.

Chabahar could also be a key port for another important corridor called the International North-South Transport Corridor (INSTC).

INSTC is a 7,200km-long multimodal network of ship, rail, and road route for moving freight between India, Iran, Armenia, Azerbaijan, Russia, Central Asia and Europe.

Given its location, Chabahar Port is of great significance, and India and Iran have a long-standing agreement, signed in 2002, to develop the port into a full deep sea port. Now, the port can handle 100,000 tonne cargo ships.

During the first week of March, reinforcing the importance of trade routes in the region, Tehran hosted the 7th meeting of the INSTC’s Coordination Council.

The Iranian Transport Minister, Mohammad Eslami, along with senior officials and delegations from the member nations attended the opening ceremony of the two-day summit.

On the Council’s agenda, the fourteen member countries plan to find new ways of facilitating cooperation among the member states, and deep dive new approaches on how to increase trade volumes through raising the economic attractiveness of the corridor.

The good news is that following India’s accession to the TIR system in 2017, Oman also acceded to TIR in 2018 and now all member states of both the Chabahar and INSTC agreements are TIR contracting parties.

Thanks to the close cooperation between the three countries, in particular the Customs and Chambers of Commerce of Afghanistan, India and Iran –Afghanistan Chamber of Commerce and Industries (ACCI), Federation of Indian Chambers of Commerce and Industry (FICCI) and Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA)-, this intermodal corridor is now active under the TIR system.

The news highlights the implementation of the Chabahar Agreement under TIR and also shows the potential for promoting intermodal TIR for India.

This is the first time that a TIR transport has been terminated in India, and follows an agreement between Afghanistan, India and Iran on 24 December 2018 which committed to activating the corridor under TIR.

To further facilitate activation of Chabahar and the INSTC corridors, digital TIR is key.

Iran has taken several positive steps towards digitalisation and intermodal TIR in the region. They carried out the first eTIR pilot project with Turkey – which was successfully implemented in 2016-2017, and now both countries are discussing expanding the project fully to all customs offices and transport operators.

Iran has also started discussions with Azerbaijan on digital TIR and it seems both countries will soon start implementation.

In addition, Iran made a big step towards intermodal TIR and for the first time they conducted TIR transports from Europe to Iran by road, sea and rail in 2017.

In the region, Pakistan Customs has also announced its readiness to join eTIR and now is the time for Chabahar and INSTC corridors parties to take the necessary steps towards TIR digitalisation to make these corridors more efficient and secure.

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Photo: First consignment was marked at a ceremony at Zaranj in Nimroz, Afghanistan, attended by President Ashraf Ghani and Ambassadors from Iran and India and representatives from other countries.

With the contribution of Janet Waring and Kazem Asayesh.

 

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