NEW DELHI : India and Iran are expected to sign a long-term deal for the development of Iran’s Chabahar Port by September before the Global Maritime India Summit 2023 scheduled in New Delhi in October, two people familiar with the matter said.

After years of negotiations, Delhi and Tehran are expected to sign a multi-year deal, allowing India to develop the Shahid Beheshti Terminal in the Chabahar port. In 2016, India Ports Global Ltd (IPGL) and Arya Banader of Iran had signed a contract to develop the port.

However, an official of the Ports Ministry said the contours of the long-term deal will be finalized next month, and an agreement will likely be signed in September.

Currently, India and Iran sign one-year contract extensions for developing and running the terminal at Chabahar Port. However, India has been urging Tehran to commit to a longer-term pact, providing certainty for investment and development plans for the port designed by India. A long-term contract for 10 years may also provide for automatic renewal.

Negotiations on the long-term contract were earlier held up due to disagreements over the arbitration clause in the deal. Iran was earlier uncomfortable with clauses on international arbitration, given constitutional restrictions on taking disputes to foreign courts. However, both sides are set to reach a compromise solution allowing cases to be taken to international arbitration courts in neutral locations such as Singapore and Dubai. India had earlier suggested arbitration matters be taken up either in Dubai or Mumbai.

Differences of opinion over other clauses, such as a guarantee of minimum traffic sought by Iran, will also be resolved, paving the way for fast-tracking infrastructure development at the port to ensure bringing shipping traffic to this strategic location.