Chabahar port: India rush to clear $150 million Iran credit line

To combat China for the Chabahar Port upgrade, India is pumping in a $150-million credit line for Iran to fast-track bilateral negotiations to improve business alliance between the two countries.

Following insistence from the Prime Minister’s Office the approval for the Line of Credit (LOC) was taken up on December 4 last year. Within a week, Ministry of Shipping rushed a Cabinet proposal recommending that the Export Development Fund (EDF) be enabled to raise and provide the $150-million buyers’ credit facility denominated in Indian rupees to Iran. It is learnt that the proposal has been approved by all concerned departments and would be cleared by the cabinet this week.

LoC is the highlight of a Joint Commission Meeting (JCM) between India and Iran on December 28. The payment of outstanding dues owed to Iran for crude oil purchases is on top of the JCM agenda.

The $150-million credit, over and above the $85.21 million to be given by MEA for equipping two berths at Chabahar, which Iran sought to fund its 630-km rail project from Chabahar port to Zahedan.

According to sources, the LoC had gained urgency due to the fact that a number of project contracts covering steel rails, railway rolling stock and steel pellets exports by Indian companies were already in place but didn’t have financing support to achieve realisation. Steel exports have also been listed on the JCM agenda following approval by a committee of secretaries, also on December 4, for “provision of credit for exports to Iran” for the rail project.

India’s hurry to engage with Tehran comes on the heels of a mid-November visit by a Chinese economic delegation, shepherded by its ambassador in Iran, to Chabahar port to study grounds for business cooperation expansion. New Delhi is already delayed in concluding the commercial contract for the port — considered both a strategic and an economic asset — by November 5 as India and Iran inked an inter-governmental MoU in May setting a deadline for signing the detailed contract within six months. The port development project is also listed for JCM, sources revealed.

Along with Chabahar port, India is keen on developing a port-based urea fertiliser plant for which natural gas would be locally sourced.

https://www.hellenicshippingnews.com/chabahar-port-india-rush-to-clear-150-million-iran-credit-line/