The US State Department has warned India about the potential risk of economic sanctions that any entity considering a business deal with Iran faced after New Delhi signed a 10-year deal with Tehran to operate the Chabahar port. It also emphasised that no exemptions would apply. 

“So, we’re aware of these reports that Iran and India have signed a deal concerning the Chabahar port…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,” said US Department of State Principal Deputy Spokesperson Vedant Patel at a press briefing on Monday.

India signed a 10-year agreement on Monday with Iran to operate and manage the Chabahar Port, located close to Iran’s southeastern border with Pakistan. India and Iran have projected the port as a key hub for the 7,200-km-long International North South Transport Corridor for moving freight between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe, bypassing Pakistan.

Risk of sanctions

Answering questions on the implications of the latest India-Iran deal, Patel stated that anyone considering business deals with Iran, needed to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions.

He also indicated that the exemptions from sanctions granted in 2018 by the Donald Trump administration to allow India to construct and develop the Chabahar port would not apply. When asked if an exemption could be given specifically for the Chabahar port deal, Patel unambiguously responded in the negative.

“Given Iran’s increased role in the crisis in the Middle East and the fact that it is a new agreement signed between India and Iran, the US seems to have hardened its position on sanctions,” a source told businessline. Last year, India sent 20,000 tonnes of wheat as aid to Afghanistan through the Chabahar port.

The long-term agreement was signed by Indian Ports Global Ltd (IPGL) and the Port and Maritime Organisation of Iran, per an official statement said. IPGL will invest about $120 million while another $250 million will be raised as debt. The agreement replaces an initial 2016 pact, which covered India’s operations at the Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.