Uzbekistan steps up interest in using Iran’s oceanic Chabahar port as trade gateway

By Alisher Kalandarov in Tashkent December 15, 2020

Doubly landlocked Uzbekistan is increasingly expressing an interest in using Iran’s sole oceanic port, Chabahar, as a trade gateway that could help it expand to new overseas markets. The issue was on the agenda of a Trilateral Working Group Meeting held by India, Iran and Uzbekistan on December 14.

All three sides noted the significant role played by the port, under joint development by Iran and India, in the delivery of humanitarian assistance during the coronavirus (COVID-19) pandemic. Chabahar is unusual in that the US has refrained applying sanctions to its development given the important role it could play in the economic development of war-torn Afghanistan. Iran last week announced its first cross-border railway connection with Afghanistan.
“All sides welcomed India's proposal to hold a ‘Chabahar Day’ on the sidelines of the International Maritime Summit scheduled to be hosted by India in January 2021,” the Indian Ministry of External Affairs said in a statement.

The trilateral meeting was jointly chaired by Sanjeev Ranjan, secretary (shipping) for the government of India, Uzbek deputy transport minister D. Dehkanov and Iranian deputy transport minister Shahram Adamnejad.

In 2018, Iran and India signed an agreement worth $85mn to develop Chabahar Port in southeastern Iran. The port is located on the Gulf of Oman, offering direct routes across the Indian Ocean.

Uzbekistan is Central Asia’s most populous nation and has ample reserves of uranium, gold, coal and oil. Some such resources and value-added goods from industries including cotton and plastic could be exported from Chabahar.

The Asian Development Bank (ADB) in November this year approved a $121mn loan to help Uzbekistan improve its regional connectivity.

India, meanwhile, which has struggled to trade with Iran while under pressure from the sanctions threat wielded by the Trump administration, is making it clear that it hopes to revive import and export channels—including a channel that would restart Iranian oil deliveries—with the Islamic Republic in the Joe Biden ear.

India has already developed the first phase of the Chabahar port project, touted as New Delhi's answer to Gwadar in Pakistan, which has been developed by China and aims to access Central Asia through Pakistan’s extensive railway network.

On August 10, Iran, Uzbekistan and Afghanistan opened up the first direct transit corridor connecting with Oman.

The volume of trade between Iran and Uzbekistan remains modest as things stand, with just a few thousand tonnes of imports and exports annually.

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