India says US has granted 6-month exemption from sanctions on Chabahar port

The move came more than a month after the US revoked a long-standing sanctions waiver that allowed India to establish a presence at the strategic Iranian port

New Delhi: India said on Thursday that the US administration has granted a six-month exemption for American sanctions applicable to Iran’s Chabahar port, which has been developed by New Delhi over the past decade as a crucial gateway for expanding trade and transit with the region.

People familiar with the matter said that the US administration initially granted an exemption of about a month after the Indian side approached it for discussions on the matter.

The move came more than a month after the Trump administration revoked a long-standing sanctions waiver that allowed India to establish a presence at the strategic Iranian port on the Gulf of Oman.

“I can confirm that we have been granted exemption for a six-month period on the American sanctions that were applicable on Chabahar,” external affairs ministry spokesperson Randhir Jaiswal told a weekly media briefing. The waiver became effective on Wednesday.

People familiar with the matter said that the US administration initially granted an exemption of about a month after the Indian side approached it for discussions on the matter. This was followed by the six-month exemption that was formally conveyed by the US side this week.

The US state department had earlier announced a sanctions waiver granted in 2018 for Chahbahar port would be revoked on September 29. That waiver, granted during US President Donald Trump’s first term, was linked to building alternative connectivity to Afghanistan that bypassed Pakistan at a time when US forces were still engaged in combating the Afghan Taliban. At the time, both India and the US were backing the erstwhile civilian government in Kabul.

The US state department said the revocation of the waiver was in line with President Donald Trump’s “maximum pressure policy to isolate the Iranian regime”. Noting that the exception was made for Afghanistan’s reconstruction and economic development, the state department said “persons who operate the Chabahar Port or engage in other activities” could be exposed to sanctions under the Iran Freedom and Counter-Proliferation Act (IFCA).

India has developed the Shahid Beheshti terminal at Chabahar port, where operations were taken over by state-owned India Ports Global Limited (IPGL) in 2018. Last year, India and Iran signed a long-term agreement covering IGPL’s operations at Chabahar for 10 years.

Under this agreement, IGPL plans to invest about $120 million on equipping Shahid Beheshti terminal, including procuring equipment such as mobile harbour cranes, rail mounted quay cranes, forklifts and pneumatic unloaders. India also offered a credit window of $250 million for projects aimed at improving Chabahar-related infrastructure.

However, US sanctions on Iran over its nuclear programme have for long hampered India’s efforts to acquire equipment for the port, seen by New Delhi as vital for improving connectivity with Afghanistan and the Central Asian states.