India has proposed an investment of US$ 20 billion (Rs 132,900 crore) in Iran’s Chabahar port, either through joint venture between Indian and Iranian public sector companies or with private sector partners.

The investment is with regards to Indian companies’ interest in setting up petrochemical and fertilizer plants in the region. The intent was conveyed during India’s Minister of State (I/C) for Petroleum and Natural Gas, Dharmendra Pradhan’s recent visit to Iran from April 9-10, 2016.

“Pradhan requested Iran to allocate appropriate and adequate land in the Chabahar SEZ. He also requested the Iranian side for favourable treatment in the pricing of gas for India and also supply of rich gas at competitive price and on long term basis for the life of the joint venture projects that Indian companies are interested in setting up. He said that competitive gas pricing was crucial in making the projects attractive for the prospective investors. He also expressed India’s interest in setting up a LNG plant and a gas cracker in the Chabahar port,” said the Petroleum Ministry’s official statement. 

Pradhan had meetings with Iran’s minister of petroleum Bijan Namdar Zanganeh; senior advisor to the President of Iran on free trade zones, Akbar Torkan and governor of Iranian Central Bank, Valliolah Seif. Both sides discussed the developments regarding Farzab-B gas fields and expressed confidence on concluding an agreement at the earliest. The issues relating to payment of dues by Indian refineries to Iran towards purchase of crude oil were also discussed. Pradhan conveyed that India was committed towards making payments as and when banking channels, acceptable to both sides, were available. 

The minister further urged the Iranian side that “both countries must expand the basket of oil and gas trade.” He expressed India’s interest in importing LPG from Iran and said that companies from both sides could discuss setting up an extraction plant in Chabahar, if required. Both sides agreed to continue examining various means of evacuation of gas such as LNG, including through the proposed Iran-Pakistan-India pipeline. 

On the final day of his visit, Pradhan also visited the Chabahar free trade zone and port for a site visit and discussed the facilities and incentives which could be offered to Indian companies.