How important is Chabahar Port for India?:Indian company risks ₹1,155 crore investment as US repeatedly strikes Iran

The United States has carried out multiple military strikes in Iran. During these attacks, a large surveillance tower at Iran’s Chabahar Port had collapsed. This is causing a lot of worry for India. For a long time, the conflict around the Strait of Hormuz has been a massive problem for global trade. Now, the attacks on Chabahar Port are becoming a new headache for the Indian government. Why India invested in the Chabahar Port? India has been very ambitious about the Chabahar Port, which lies to the south of war-hit Iran. Currently, Pakistan does not allow India to send trucks carrying commodities across its land to reach countries like Afghanistan and Central Asia. To solve this, India helped build the Chabahar Port in Iran. This port allowed India to bypass Pakistan entirely and ship goods directly to those countries by sea and land. India even signed a 10-year agreement to run a part of this port. How much money has India invested? India has already spent a large amount of money on this project. The Minister of State in the Ministry of External Affairs Kirti Vardhan Singh had said in Rajya Sabha said that the government of India recently finished making its full promised investment of about ₹1,155 crore for the procurement of port equipment in the Chabahar Port. The main Indian company that invested in the Chabahar Port is India Ports Global Limited (IPGL). This is a government-owned company set up specifically to run ports outside of India. A total of ₹400 crore has been allocated from FY 2016-17 to FY 2023-24, said a PIB release. However, because the US has put strict sanctions on Iran and threatened heavy taxes on countries doing business with it, India has recently had to step back and lower its operations at the port to protect its multi-billion dollar trade with the US. India-Iran Chabahar Port deal India had on May 13 2024, signed a 10-year contract to operate the strategic Iranian port of Chabahar that would help it expand trade with Central Asia. The signing of the Chabahar Port deal was a ‘landmark’ in India-Iran economic relations, news agency PTI had quoted a top Iranian diplomat as saying. What India imports and exports via Iran? India and Iran buy and sell many everyday goods through their trade routes. India’s imports from Iran have shifted significantly in recent years. What India sells (exports) to Iran: Mostly farming goods, especially high-quality Basmati rice. India also exports sugar, tea, fresh onions, and garlic. What India buys (imports) from Iran: A lot of dry fruits like almonds and dates, fresh apples, and special chemicals used in factories like methanol. India’s exports to Iran more than halved after Trump imposed sanctions in 2018-19 India’s exports to war-torn Iran more than halved from 2018-19 to 2024-25. The US President Donald Trump imposed sanctions on Iran during his first presidential term in 2018-19. During this 7-year period exports fell 57% to ₹10,497.54 crore in FY25 from ₹24,460.96 crore in FY19. Iranian imports have fallen 25 times since FY19 While, imports reduced even more drastically by a massive 25 times from ₹94,112.97 crore in 2018-19 to ₹3,747.32 crore in 2024-25. Transit of which goods may face supply disruptions? Basmati Rice: Iran is the biggest buyer of Indian Basmati rice. Because of the current fighting, millions of tonnes of rice are already stuck at ports, and farmers are losing money. Dry Fruits and Apples: It will become harder to bring almonds, dates, and fresh apples from Iran. Because there will be less supply, the prices of these items in Indian markets could go up quickly. Cars and Factory Chemicals: The cost to ship cars and chemicals is rising due to the danger at sea. This makes things more expensive for Indian companies. Total India-Iran trade size The total business done between India and Iran is worth around ₹14,244 crore every year. While this is a small part of India’s total global trade, losing the safety of Chabahar Port hurts India’s long-term plan to connect easily with the rest of Asia.