Chabahar Port: The 10-year contract signed by India and Iran on Monday with respect to the Chabahar Port can come under American sanctions – and will not be exempt like before, as was the case under the erstwhile Donald Trump administration – because the United States is viewing the new agreement as a “new deal”, multiple sources have told ABPLIVE.
India and Iran have signed a 10-year agreement to operate and manage the Chabahar Port, and also to develop the next phase of the project by way of mega connectivity plans, even as New Delhi plans to integrate it with the International North South Transport Corridor (INSTC), thereby creating a seamless trading route from India to Russia through Iran.
The US is thus viewing the contract as a “new deal” that can invite sanctions, top-level sources said. There is “no more” exemption on this particular deal, they added.
The US, under the Joe Biden administration, has imposed more than 600 sanctions on Iran-related individuals and entities, and also on those that conduct business with Tehran, the US President said last month. Biden added that fresh sanctions were being imposed on Iran in light of its missile and drone attacks on Israel, which he described as the “largest… the world has ever seen”. Iran had claimed the attack was its response to an April 1 Israeli airstrike on its mission in Syria that had killed senior military personnel.
According to a source, India had suspended all work under the Chabahar agreement owing to the US sanctions. But, explaining the fresh agreement, the source noted that China has been increasing its footprints in the Persian Gulf country at a blistering pace under the Belt and Road Initiative (BRI).
Beijing has also now become one of the top buyers of crude oil from Iran after India’s purchases went down to nil in May 2019, also due to American sanctions.
In 2023, Beijing bought 90% of Iran’s oil, amounting to 10% of China’s total imported oil. Due to China, Iran’s oil exports grew by 50% in 2023, reaching a five-year of 1.29 million barrels per day.
Dhananjay Tripathi, Associate Professor and Chairperson of the Department of International Relations at South Asian University, said, “India is a sovereign country and this deal is important and crucial for both India as well as Iran. It will facilitate India’s access to Central Asia and beyond, and that can only be achieved through the Chabahar project. We have a Pakistan that creates issues for us so we need to access that region for trade.”
Tripathi denied that the agreement is “new”, adding that it is only a continuation of the previous programme.
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Trump Exempted India, China, Turkey From Iran Sanctions in 2018
During the erstwhile Donald Trump administration, the US had given a few exemptions to India for developing the strategically important Chabahar Port in Iran even as Washington was focussing on the port of Gulf of Oman as it was key to its presence in war-torn Afghanistan, said another official, who refused to be identified.
The exemption allowed India to beat sanctions imposed by the US under the Iran Freedom and Counter-Proliferation Act of 2012. Besides India, temporary exemptions were granted to China, Italy, Greece, Japan, South Korea, Taiwan and Turkey, and they were allowed to do business with the Persian Gulf country.
However, on Monday, within hours of the agreement being signed between New Delhi and Tehran, the US State Department 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”.
“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,” State Department Deputy Spokesperson Vedant Patel said in Washington DC during a press conference.
