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US warns of 'sanctions' after India-Iran Chabahar Port deal: 'Anyone considering business deals with Iran…'

The deal was signed in the presence of Indian delegation led by Union Shipping Minister Sarbananda Sonowal and Iran's Minister of Roads and Urban Development Mehrdad Bazrpash. The deal seeks to foster close cooperation between India and Iran to make Chabahar port a regional trade transit hub.

Edited By: Ashesh Mallick @asheshmallick07 Washington Published on: May 14, 2024 7:25 IST
US, India Iran, Chabahar Port deal
Image Source : ANI US State Department Principal Deputy Spokesperson, Vedant Patel

Reacting to India signing an agreement to operate the Chabahar Port in Iran for 10 years, the United States warned that “anyone” considering business deals with Tehran needs to be aware of the “potential risk of sanctions”. The US State Department Principal Deputy Spokesperson, Vedant Patel, however, also added that it will let the government of India speak on its foreign policy goals. The remarks came hours after India and Iran signed a 10-year deal that would give India management control over a section of the crucial Chabahar Port, which opens up trade routes between India and land-locked Afghanistan, Iran and other Eurasian countries. India will take control of operations at the Shahid-Beheshti Port Terminal.

What did the US say on India-Iran Chabahar Port deal?

"We are aware of these reports that Iran and India have signed a deal concerning the Chabahar Port, I would 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," Vedant Patel said in the press briefing on Monday (local time).

“I would just say...US sanctions on Iran remain in place and we will continue to enforce them. Any entity, anyone considering business deals with Iran, they need to be aware of the potential risk they are opening themselves up to, potential risk of sanctions,” he added.

India-Iran Chabahar Port deal

Indian Ports Global Limited (IPGL) has committed to further equipping and operating the port for the duration of the contract. At the end of the 10-year period, both sides would further extend their cooperation in Chabahar.  IPGL will invest nearly USD 120 million in equipping the port. India has also offered an in-credit window equivalent to USD 250 million, for mutually identified projects aimed at improving Chabahar-related infrastructure. This 10-year long-term lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust among trading communities in the region.

Significance of the Chabahar Port

The Chabahar port, on which India invests heavily, has strategic and economic significance for New Delhi. It allows India to bypass Pakistan's ports in Karachi and Gwadar and reach land-locked Afghanistan and Central Asian countries. Besides, the Port is also considered a counter-response to China's most touted Belt and Road Initiative.

It also opens up a new vista of economic opportunities for business communities to explore an alternative transit route from the sensitive and busy Persian Gulf and Strait of Hormuz. However, US sanctions on Iran have slowed the development of the port. Chabahar is a key component of India's growing connectivity initiatives.

India aims to make Chabahar Port a transit hub under the International North-South Transport Corridor (INSTC) to reach out to CIS (Commonwealth of Independent States) countries. INSTC is India's vision to economise the movement of cargo between India and Central Asia, and the Chabahar Port would act as a commercial transit centre for the region.

India-Iran agreement

The first pact on Chabahar was signed in 2016 when PM Modi visited Iran, when both sides agreed that India would refurbish one of the berths at Shahid Beheshti Port Terminal. In 2017, the first phase of Chabahar Port was developed and launched by then-President Hassan Rouhani.

In January, India and Iran had signed an agreement on further development of Chabahar port after Jaishankar held wide-ranging talks with Iran's Minister of Roads and Urban Development, Mehrdad Bazrpash, during his visit to Tehran. The two sides agreed to finalise the deal inked between Iran and India on the development of the port.

"It will see more connectivity linkages coming out of that port. And we believe today that connectivity is a very big issue in that part. International north-south transport corridor, which we're doing with Iran-Russia, Chabahar will connect us to that, also to Central Asia," said Jaishankar on Monday.

(With ANI inputs)

ALSO READ | India signs 10-year-deal with Iran to manage Chabahar Port: What is its significance?


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