The Chabahar port in Sistan-Balochistan province is accessible from India's western coast.
India is hopeful to fully operationalise the strategic Chabahar port in the Sistan-Balochistan province of Iran soon, and the government has allowed an Iranian bank to open a branch in Mumbai for related transactions, Union Minister Nitin Gadkari said today.
Mr Gadkari, after Iran's Minister of Foreign Affairs Mohammad Javad Zarif met him, said the meeting was "fruitful" and both the sides resolved several issues.
"Chabahar port is very important for us. We are working very hard on it… Some problems were there, but the Iranian government and their minister… are also in the process to resolve all the issues as early as possible. I am confident that we will be in a position to start full function of Chabahar Port at the earliest," he said.
The Chabahar port in the Sistan-Balochistan province is easily accessible from India's western coast and is increasingly seen as a counter to Pakistan's Gwadar port located around 80 km from Chabahar.
Shipping and Road Transport and Highways Minister Gadkari said the Reserve Bank of India (RBI) has given all clearances to an Iranian bank to open a branch in Mumbai within three months.
"The government of India has given permission to an Iranian bank to open its branch in Mumbai. It is going to open within three months, and will be used for transactions (related to Chabahar port)," the minister said.
Mr Zarif said: "We are very happy that both UCO Bank from India and Pasargad Bank from Iran are getting started with the business."
The two banks will facilitate transactions relating to operation of berths at Chabahar port. India has placed $85 million machinery order for Chabahar, Mr Gadkari said.
He said India has taken over partial operations at Chabahar, and the first ship from Brazil was received at the Iranian port.
Mr Gadkari said the Iranian Minister has given many proposals including those on a barter system between the two nations.
"They need steel, particularly rail steel and locomotive engines in large quantities, and they are ready to supply urea," he said.
India can provide steel rails to Iran and the Persian gulf nation can provide urea to India, he added.
Iraninan Minister Zarif said: "We had very good discussions on both Chabahar as well as other areas of cooperation between Iran and India. The two countries complement each other and we can cooperate in whole range of areas… We hope that in spite of the illegal US sanctions, Iran and India can cooperate further for the benefit of the people of the two countries and for the region."
The first phase of the Chabahar port was inaugurated in December 2017 by Iranian President Hassan Rouhani, opening a new strategic route connecting Iran, India and Afghanistan bypassing Pakistan.