India is developing two berths at the Shahid Beheshti port of Chabahar.

A new direct shipping route between Iran’s southeastern port of Chabahar and Indian ports of Nhava Sheva and Kandla will open next month with the arrival of a container service at Shahid Beheshti port, an Iranian official says.

India launched shipping lines between Iran’s Chabahar and the Indian ports of Mumbai and Mundra in 2017. It set up the second direct shipping route passing through Mumbai, Mundra, Kandla, Chabahar and finally Bandar Abbas in southern Iran in January 2019.

According to deputy head of Iran’s Ports and Maritime Organization (PMO) Jalil Eslami, a new container ship will arrive in Chabahar on February, marking the establishment of a new route.

He said the PMO will offer necessary tariff incentives and facilities on tolls and transportation costs to support the traders that use the lines.

The Islamic Republic of Iran Shipping Lines (IRISL), Eslami said, performs regular container service with a traffic schedule of 10 to 15 days.

In November, Iran’s ambassador to India said Tehran expected New Delhi to resume oil imports from the Islamic Republic and move on the next phase of developing the Chabahar port project.

According to Ali Chegeni, trade between India and Iran exceeded $17 billion in 2018-19 and had the potential to reach $30-35 billion this year had New Delhi not stopped Iranian oil imports.

He also complained that there was not enough activity from its side to complete the Chabahar project.

Chabahar, on paper, is not covered by the US’ illegal sanctions, he said, but India is probably still scared of third parties to invest and work in Chabahar.

Under a trilateral contract signed with Iran and Afghanistan in May 2016, India is developing two berths at the Shahid Beheshti port of Chabahar with a total capital investment of $85 million and will operate them on a 10-year lease.

Operations at the terminals have somehow started, but New Delhi has not moved on the next phase of the project, which involves building a rail-link from Chabahar to the Iranian city of Zahedan, near the Afghanistan border.

India was also expected to invest in setting up fertilizer, petrochemical and metallurgical plants in the Chabahar Free Trade Zone, but it abandoned them lest they might invoke the US ire.

Iran decided to develop the rail link on its own last year. Chegeni said the project is more than 70 percent complete, but India can still join it for signaling and other infra development.

Chabahar is a very big area for investments and there is a free trade zone area. There are a lot of opportunities for India to come and invest. Unfortunately, the private sector from India is still hesitant because of some fear regarding the sanctions. I am sure the Indian government wants that, but the speed is not there, he was quoted as saying.

Iran’s President Ebrahim Raisi has appointed a special representative for India for the first time in the history of the two countries’ relations.