India downplays US sanction threat over Iran’s port contract

Hours after India and Iran inked a 10-year deal to develop and operate the strategic Iranian port of Chabahar, the US warned any entity considering business deals with Iran of potential sanctions.

“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,” the US State Department Principal deputy spokesperson, Vedant Patel, said at a press briefing on Monday.

In reaction to the US threat, Jaishankar stated on Tuesday that people should not take a “narrow view” of the initiative, noting that the US has been appreciative of the larger relevance of the port and is well aware of the significance of the agreement.

“I did see some of the remarks that were made, but I think it’s a question of communicating, convincing, and getting people to understand that this is actually for everyone’s benefit. I don’t think people should take a narrow view of it,” Jaishankar said while speaking at a book launch in Kolkata, India.

“They (US) have not done so in the past. So, if you look at the US’s own attitude towards the port in Chabahar, the US has been appreciative of the fact that Chabahar has a larger relevance …we will work at it,” he added.

He emphasized India’s longstanding involvement in the project, but said a long-term agreement could not previously be concluded due to a number of issues. He said that successful resolution of issues led to the signing of a beneficial long-term pact for the region.

“We have had a long association with the Chabahar Port, but we could never sign a long-term agreement. The reason was …there were various problems … the joint-venture partner changes, the condition changed.”

“Finally, we were able to sort this out and we were able to get the long-term agreement done. The long-term agreement is necessary, because without it you cannot really improve the port operation. And the port operation we believe will benefit the entire region,” he continued.

Back in 2016, India agreed to finance the development of the Iranian port but the process was stalled two years later due to the US sanctions reimposed after Washington’s unilateral withdrawal from the 2015 nuclear deal with Iran.

The agreement for the Long-Term Bilateral Contract regarding the operation of Chabahar Port, Iran’s sole ocean port, was officially executed on Monday between Indian Ports Global Limited (IPGL) from India and the Ports and Maritime Organization (PMO) of Iran.

For India, the Chabahar Port is considered a significant transit port for trade with landlocked Afghanistan and Central Asian countries.

The Indian government has made significant investments in the port’s infrastructure and has actively participated in enhancing its facilities to establish it as a feasible transit route for Indian goods destined for Afghanistan and Central Asia.