Expect more Iranian petchem imports to India
For most of the world, Iran is a pariah state, but not in India.
Davoud Rezaei Eskandari, Iran's acting consul general in Mumbai, tells this report Tehran is eagerly awaiting a boost to its petchem exports to India. On May 13 (2024), the Indian government announced a 10-year deal with Tehran to develop Chabahar port in southern Iran for $370m.
According to Reuters, shipping ministry-controlled India Ports Global (IPGL) signed the contract with its Iranian counterpart, the Port & Maritime Organisation of Iran. When contacted, Eskandari said the long-awaited agreement would primarily lead to the realisation of the International North-South Corridor (INSTC) project, designed to shorten the time to transport goods between India, Central Asia, Iran, Russia and Europe.
"Chabahar port capacity utilisation is currently less than 20m t/y," said Eskandari. "Iran, India and Russia have agreed that capacity utilisation should be 50m t/y by 2030 when the INSTC is fully operational."
INSTC includes 7200-km of road, rail and ship routes to transport goods. Eskandari sees petrochemicals as a major export item from Iran to India, where demand is expected to grow by 7% in 2024-25, reflecting India's economic growth.
Iran's petrochemical production and export is growing annually at 6%, according to Eskandari. He stressed India is Iran's third largest petchem market after China and Turkey.
"China accounts for 45%, Turkey for 13% and India 6%," said Eskandari. He added that polymers, oil drilling chemicals, fertilisers, paints, resins, and bitumen make up a significant percentage of Iran's exports to India.
Eskandari added Iran has identified four development phases in Chabahar. "Phase-1 is done," he adds.
"The other phases will see the development of LNG, CNG and other gas-based projects for which we are inviting investments from foreign and domestic investors." Delhi and Tehran signed a short-term agreement in 2018 under which IPGL took over port operations.
India invested approximately $22m in mobile gantry cranes and other equipment. Following the recent deal, India is believed to have begun ordering more equipment.
"India has to set the milestones for the overall duration of the Chabahar port development," he said.