Why Iranian envoy thinks US won’t impose sanctions on India over Chabahar port
Iranian ambassador Iraj Elahi also said any possible sanctions by the US would harm the trade of many countries, not just India or Iran
NEW DELHI: After India and Iran signed a long-term agreement for expanding Indian operations at Chabahar port, the US warned that all entities engaging in business deals with Iran face the “potential risk of sanctions”.
Responding to the position adopted by the US, Iranian ambassador Iraj Elahi said on Tuesday that the “importance of India” will prevent any country from imposing sanctions on India over its cooperation with Iran. Elahi told HT that any US sanctions would harm the trade interests of numerous countries that are looking at Chabahar as a transit hub.
The 10-year agreement signed by India and Iran on Monday will facilitate the long-term development of Shahid Beheshti terminal at Chabahar port, where operations are run by a subsidiary of state-run India Global Ports Limited (IGPL). The firm plans to invest $120 million on equipping the terminal and India has also offered a credit window of $250 million to improve infrastructure around Chabahar.
The US had granted a carve-out for Chabahar from its sanctions regime for Iran when New Delhi, Tehran and Kabul signed a tripartite agreement for developing the port in 2016. At that time, the US decision was influenced by the port’s potential to facilitate trade and development in Afghanistan and lobbying by the Indian side.
Asked at a regular media briefing at the US state department about the India-Iran agreement on Chabahar, deputy spokesperson Vedant Patel said American sanctions on Iran “remain in place and we’ll continue to enforce them”.
Patel added that the US has maintained that “any entity, anyone considering business deals with Iran...need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions”.
He responded to a specific question on whether there was an exemption for the new India-Iran agreement by saying: “No.”
Iranian ambassador Elahi responded to Patel’s remarks: “I think the importance of India prevents any side from imposing sanctions on India regarding the cooperation between India and Iran on Chabahar.”
Elahi added, “Besides this, the Chabahar project is not just for the benefit of Iran or India. Chabahar will facilitate the transit of goods from Southeast Asia to Europe, Russia and Central Asia. If the US imposes any sanctions on this project, it means that the US is going to harm the trade of many countries, not just India or Iran.”
There was no immediate reaction from the Indian side to the remarks by the US state department’s deputy spokesperson.
Even when the US withdrew from the Joint Comprehensive Plan of Action (JCPOA) or Iran nuclear deal in 2018 and announced fresh sanctions against Iran that resulted in India completely halting the purchase of Iranian crude, Washington retained the carve-out for Chabahar port.
The US had provided an exception from sanctions under the Iran Freedom and Counter-Proliferation Act of 2012 for the development of Chabahar port, the construction of an associated railway, the shipment of non-sanctionable goods through the port to Afghanistan, and Afghanistan’s continued imports of Iranian petroleum products.
The US state department had said at the time that this strategy underscored support for Afghanistan’s economic development and the “close partnership” with India.
Both India and Iran see Chabahar, a deep-water port in Sistan-Baluchistan province, as a hub for the International North–South Transport Corridor (INSTC), which will allow shipping companies to use an alternative route that bypasses the sensitive and busy Persian Gulf and Strait of Hormuz. The port is also key to India’s ambitious plans to forge greater connectivity and trade ties with Iran, Afghanistan and the landlocked Central Asian states.
Ports and shipping minister Sarbananda Sonowal, who travelled to Tehran on Monday to witness the signing of the long-term agreement, said the project is about encouraging Indian entrepreneurs to venture into the region from a long-term perspective.
“The port’s integration with a special free zone augments its appeal, while India’s incentives, such as concessions on vessel-related charges and cargo charges, bolster trade flows through Chabahar, fostering economic growth and cooperation,” he said.
The port also provides an opportunity for Indian business entities to expand their footprint in the Central Asian region, Sonowal said.
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