US warns India of sanctions over Chabahar port deal

Hours after India and Iran inked a historic agreement, allowing New Delhi to manage Chabahar Port for 10 years, the United States issued a word of caution, saying that "anyone considering business deals with Iran needs to be aware of the potential risk of sanctions."

Responding to a question on India signing the deal, deputy spokesperson of the US State Department, Vedant Patel said, "We're aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its own bilateral relationship with Iran."

"I will just say, as it relates to the United States, US sanctions on Iran remain in place and we'll continue to enforce them," he added.

When asked if Indian firms are also at risk of being sanctioned by the US, Patel said, "Any entity, anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions."

The Chabahar port on the Gulf of Oman - which New Delhi had proposed to develop way back in 2003 - will provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor, bypassing Pakistan.

US sanctions on Iran over its suspected nuclear programme had slowed the development of the port.

The long-term agreement was signed by Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran, an official statement said.

IPGL will invest about USD 120 million while another USD 250 million will be raised as debt.

The pact was signed in a ceremony attended by India's Ports, Shipping and Waterways Minister Sarbananda Sonowal and Iranian Transport and Urban Development Minister Mehrdad Bazrpash in Tehran.

It replaces an initial 2016 pact, which covered India's operations at Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.

Chabahar port was last year used by India to send 20,000 tonnes of wheat aid to Afghanistan. In 2021, the same was used to supply environmentally friendly pesticides to Iran.

This is the first time India will take over the management of an overseas port that will also have a multiplier effect on trade among India, Iran and Afghanistan as efforts continue to directly tap the potential in Central Asia, bypassing neighbouring Pakistan.

According to an official statement, the contract was signed by India Ports Global Ltd (IPGL) and Iran's Port & Maritime Organisation (PMO), in the presence of Ports, Shipping and Waterways Minister Sarbananda Sonowal.

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