India to participate in upgradation of Chahbahar port in Iran

ON BOARD SPECIAL AIRCRAFT: India will participate in the upgradation of strategically crucial Chahbahar port in Iran, that gives access to Afghanistan, and the issue will be discussed when External Affairs Minister Salman Khurshid holds talks with his counterpart Ali Akbar Salehi.

"We have taken a decision. We will collaborate for development of the port," Khurshid told reporters accompanying him on a three-day visit to Iran.

He said the Cabinet had given in-principal clearance for Indian participation in the project and negotiations will begin soon to work out cost and other issues.

The upgradation process is expected to take two or more years, Khurshid said.

Chahbahar port is strategically crucial as it gives access route to Afghanistan.

Chahbahar port, which is surrounded by a free trade zone, is crucial particularly since Pakistan does not allow transit facility from India to Afghanistan.

India will also discuss ways to increase trade with Iran as it is concerned over the "grave" imbalance. The two-way trade is around USD 15 billion, out of which Indian exports account only for around USD 2.5 billion.

Oil is the biggest item of Indian import from Iran but India feels there is a lot of scope for increasing Indian exports to the Persian country particularly in pharmaceuticals and food.

However, efforts to enhance trade have been facing hurdles because of sanctions imposed by the UN and European Union, which make payment difficult.

There are also problems like re-insurance of oil refineries and transportation of consignment from Iran because of the sanctions