Chabahar Free Trade-Industrial Zone

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Chabahar Free Trade–Industrial Zone (CFZ) (Persian: منطقه آزاد تجاری صنعتی چابهار ‎‎) is an Iranian free trade zone formed according to the law on the establishment and administration of free trade–industrial zones .

Chabahar free trade–industrial zone was established in 1992 along with the two other free trade zones Qeshm and Kish Island to use global expertise (mostly from South East Asia) as a tool for the development of the country, accelerating the accomplishment of infrastructure, creation of employment, and representation in global markets.[1]

The Chabahar free trade–industrial zone achieved its importance mainly from its geographical location as the shortest and the most secure route connecting central Asian independent states (CIS) and Afghanistan to warm waters and its proximity to one of the largest oil, gas and mineral resources of the world and as the only ocean port of the country.

Main activities[edit]

Chabahar free trade-industrial zone started its activities in 1995 focusing on five major areas: transit of merchandized goods, investment attraction and related services, tourism, construction & urban development and education under the administration of public controlled Chabahar free trade-industrial zone organization.

In 2002, Chabahar free trade-industrial zone organization established five specialized subsidiary bodies with the permission of the secretariat of the high council of Iran free trade-industrial zones (In 2007 Iranian president Mahmood Ahmadinejad turned the high council of Iran free trade-industrial zone into an advisory body)[1], including four holding companies and one education center that is listed below:

  1. holding company of Transit & development of trading
  2. holding company of Investment and industrial development
  3. holding company of Social welfare and tourism development
  4. holding company of professional civil and civic development
  5. International University of Chabahar

The organizational structure of the Chabahar free zone has not been stable since its establishment. In 2007, Chabahar free zone canceled some of the subsidiary bodies and turned them into sections of Chabahar free zone organization.

May 2016 agreements between Iran and India[edit]

After overseeing a series of agreements intending to develop the Port of Chabahar, India's Highways and Shipping Minister, Nitin Gadkari suggested that the Chabahar Free Trade-Industrial Zone had the potential to attract upwards of $15 billion worth of investment in the future,[2] although he stated that such investments are predicated upon Iran offering India natural gas at a rate of $1.50 per million British Thermal Units,[3] which is substantially lower than the rate of $2.95 per million British Thermal Units offered by Iran.[4] The two countries also signed a memorandum of understanding to explore the possibility of setting up an aluminum smelter at a cost of $2 billion,[5] as well as establishing a urea processing facility in Chahbahar,[6] although these investments are also contingent upon Iran supplying low-cost natural gas for operation of those facilities.[7]

See also[edit]

References[edit]

  1. ^ Article 1 of law on the establishment and administration of free trade-industrial zone
  2. ^ "India commits huge investment in Chabahar". The Hindu. 23 May 2016. Retrieved 24 May 2016. 
  3. ^ "India may invest Rs 2 lakh crore at Chabahar port in Iran: Nitin Gadkari". Economic Times. 8 October 2015. Retrieved 24 May 2016. "India is ready to invest Rs 2 lakh crore at Chabahar SEZ in Iran but the investments would depend on gas prices as India wants it to be lowered," Gadkari said... On talks on supply of natural gas, Gadkari said that Iran has offered gas to India at $2.95 per million British thermal unit to set up urea plant at the Chabahar port but India is negotiating the gas price, demanding lowering the same... India, which imports around 8-9 million tonnes of the nitrogenous fertiliser, is negotiating for a price of $1.5 per mmBtu with the Persian Gulf nation in a move which if successful will see a significant decline in the country's Rs 80,000 crore subsidy for the soil nutrient. 
  4. ^ "India may invest Rs 2 lakh crore at Chabahar port in Iran: Nitin Gadkari". Economic Times. 8 October 2015. Retrieved 24 May 2016. 
  5. ^ "Iran proposes JV to India's NALCO". Press TV. 24 May 2016. Retrieved 25 May 2016. 
  6. ^ "India, Iran ink pact to develop Chabahar port, aluminium plant". Business Standard. 23 May 2016. Retrieved 24 May 2016. 
  7. ^ "India, Iran ink pact to develop Chabahar port, aluminium plant". Business Standard. 23 May 2016. Retrieved 25 May 2016. state-owned Nalco signed an MoU to look at possibility of setting up a 0.5 million tonne aluminium smelter at Chabahar free trade zone provided Iran gives cheap natural gas. 

Further reading[edit]

  • * Roy, Meena Singh, "Iran: India's Gateway to Central Asia", Strategic Analysis, 36 (6): 957–975, doi:10.1080/09700161.2012.728862, (subscription required (help)) 

Coordinates: 25°19′23″N 60°37′44″E / 25.323°N 60.629°E / 25.323; 60.629