India and Iran signed this deal back in May in order to develop the Chabahar port in southeast Iran.
There is already plenty of speculation that the country may be moving toward imports of Liquefied Natural Gas (LNG) from Iran in the future. These imports could potentially be made through Iran’s Chabahar port.
Experts said that the port can be used to ship crude oil and urea, saving transportation costs and reducing freight time from India to Central Asia and the Gulf by about a third.
Before the trade sanctions were put in place, India had been one of the major importers of oil from Iran enjoying concessional rates of payment. But the amount of oil imported from Iran has been progressively declining over the years, mainly due to the sanctions.
Iran meanwhile had previously shelved its LNG plans, mainly as a result of US sanctions prohibiting investments of liquefaction companies in the country.
Chabahar Port is located in Chah Bahar in southeastern Iran. Its location lies in the Gulf of Oman and it is the only Iranian port with direct access to ocean.