The Chabahar Port is a major seaport located in southeastern Iran, on the Gulf of Oman, and is Iran's only oceanic port with direct access to the Indian Ocean. It is a strategic infrastructure project for India, consisting of two main ports: Shahid Kalantari and Shahid Beheshti. The port's development was first proposed in 1973 by the Shah of Iran, but India's involvement began with discussions in 2002 and a roadmap of strategic cooperation signed in 2003. The primary problem it solves is providing India with an alternative, reliable sea-land route to Afghanistan and Central Asia, bypassing Pakistan, which does not allow India land access for trade.
The mechanism for India's involvement is a long-term contract for the operation of the Shahid Beheshti terminal. A trilateral agreement was signed by India, Iran, and Afghanistan in May 2016 to establish the International Transport and Transit Corridor, also known as the Chabahar Agreement. The most recent and significant change occurred on May 13, 2024, when India and Iran signed a 10-year long-term contract, replacing the previous annual agreements. This agreement was signed between Indian Ports Global Limited (IPGL) and Iran's Port and Maritime Organisation (PMO). Under this contract, India committed to investing $120 million for the procurement of port equipment and extending a $250 million credit line to Iran. The port is a key gateway for the proposed International North-South Transport Corridor (INSTC), a multi-modal route connecting India, Iran, Russia, and Central Asia to Northern Europe. The project's viability is consistently challenged by the threat of US sanctions against Iran, which has historically slowed down its progress.