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Updated: May 13, 2016 11:44 IST

Afghanistan is hopeful an agreement with India and Iran on the Chabahar port will be inked by June, boosting Kabul’s plans to use the harbour to drive economic development despite security concerns.

The three countries have engaged in protracted negotiations on the Chabahar Agreement since 2003 but the venture was helped by recent developments, including India’s renewed focus on the port in southeast Iran and the lifting of nuclear-related sanctions on Tehran in January.

“After years of negotiations, we can definitely say it’s a done deal. This is a project not just for the development and prosperity of Afghanistan, but the whole region,” Afghan ambassador Shaida Mohammad Abdali told Hindustan Times.

Abdali said Afghanistan is hopeful the agreement will be signed at the “highest level possible”, possibly in May but not later than June.

He acknowledged the lifting of sanctions had helped because companies that wanted to invest in Chabahar would no longer fear about being blacklisted. “It was a big issue and it has made the atmosphere conducive,” he said.

During a meeting in New Delhi last month, representatives of Afghanistan, India and Iran finalised and initialled the text of the agreement for establishing a transit-transport corridor with Chabahar port in Iran’s Sistan-Baluchistan province at its heart. They also agreed to set up a sub-committee to frame transit, port, customs and consular protocols within six months.

Sources said efforts are underway to arrange a ceremony in Iran for the signing of the agreement, possibly in Chabahar.

Prime Minister Narendra Modi’s planned visit to Iran from May 21 has given rise to speculation the Chabahar Agreement could be inked during the trip, though sources said this would also require the presence of a senior Afghan leader.

At the recent tripartite meeting, sources said the Afghan side warned India and Iran to be prepared for a possible attack on the Zaranj-Delaram highway – a crucial road built with Indian assistance to serve as a link to Chabahar – to send out a message that the project is not viable.

The sources said they feared elements backed by Pakistan, which is opposed to India’s presence in Afghanistan, could carry out such an attack. Pakistan also perceives the Chabahar project as a challenge to its efforts to develop the Gwadar port in Balochistan with Chinese assistance.

However, Abdali said Afghan security forces are “fully prepared” to secure the 218-km two-lane highway that runs from Delaram in Farah province to Zaranj in Nimruz province that borders Iran.

The Chabahar port, which will have special economic zones for India and Afghanistan, is being seen as a cheaper route that will give Indian goods direct access to Afghanistan while bypassing Pakistan. The new route could give a fillip to India-Afghanistan trade, which has stagnated in the range of $680 million in the last two fiscal years.

Under the Afghanistan-Pakistan Transit Trade Agreement, Pakistan allows Afghan goods to be transported to India via the Wagah-Attari land border. However, Afghan trucks are barred from carrying back Indian goods via Pakistan – a condition that has become a sore point in ties between Islamabad and Kabul.

Besides extending a $150 million line of credit for making jetties and berths at Chabahar, India has outlined several measures during recent visits to Iran by petroleum minister Dharmendra Pradhan and external affairs minister Sushma Swaraj for developing the port.

This includes the supply of steel rails worth $400 million and technical assistance for building a railway line connecting Chabahar and Zahedan, located near the Afghan border. Pradhan said India is prepared to invest up to $20 billion in the Chabahar port and economic zone.

Abdali said the Chabahar Agreement would also allow Afghanistan and India to access other markets in Central Asia. “Afghanistan is going to witness major milestones in the months ahead,” he said.