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Prime Minister Narendra Modi's Iran visit: Four key things to watch out for

Prime Minister Narendra Modi's Iran visit: Four key things to watch out for

On Monday, PM Narendra Modi was accorded a ceremonial welcome as he met Iranian President Hassan Rouhani for talks to deepen trade, investment and energy ties.

Photo: PMO India Photo: PMO India

PM Narendra Modi's two-day visit to Iran - the first by a Indian Prime Minister in 15 years - comes four months after the international sanctions on Iran were lifted and the global community is re-engaging with the nation.

PM Modi arrived in Iran on Sunday to further cement Indo-Iranian ties and explore avenues to bolster trade in a big way. On Monday, he was accorded a ceremonial welcome as he met Iranian President Hassan Rouhani for talks to deepen trade, investment and energy ties. Here are four key issues around which his Iran visit will be watched out for:

1) Chabahar agreement

The long due Chabahar port agreement, which stalled on account of international sanction on Iran in 2006, has finally seen the light of the day after more than a decade of being on the table.

After signing a pact to operate a strategic port on the Iran's southern coast, Road Transport, Highways and Shipping Minister Nitin Gadkari said the inking of commercial contract to build and run the strategic port of Chabahar will help India gain a foothold in Iran and win access to Afghanistan, Russia and Europe, thus circumventing Pakistan.

"Over Rs 1 lakh crore investment can happen in Chabahar free trade zone," he added.

2) Gas field development

Sources told PTI that bilateral talks will also be held on state-run firms securing rights to develop the offshore Farzad-B gas field, which was discovered by ONGC Videsh (OVL).

OVL, along with Oil India and Indian Oil Corporation, had earlier invested about $100 million in the Farzad B gas field, but production could not be started as companies found it difficult to stay engaged in the hydrocarbon sector due to sanctions imposed by the US and the European Union.

Sources added that no definitive contract for the development of the field would be signed during Modi s visit as Iran is yet to agree to $4.3 billion master development plan submitted by OVL. Also, it is yet to agree on the price at which OVL can take all of the gas produced from the field.

3) Boosting oil trade

India had to reduce its oil imports from Iran due to UN sanctions on the Islamic nation. PM Modi may discuss ways to increase its oil supplies from Iran.

Iran was India's second largest supplier of oil until 2011-12, when economic sanctions against Tehran over its nuclear programme forced New Delhi to reduce its dependence on Iranian oil. PM Modi may seek a proposal to double imports of Iranian oil.

4) Other issues

Modi and the Iranian President are also likely to review peace and stability in the region which faces several challenges, including terrorism and violent extremism, besides cyber crime and maritime security.