US Warns of Sanctions after India, Iran Sign Landmark Chabahar Port Deal

Hours after Iran inked a landmark deal with India to develop and operate its southern port city of Chabahar, the United States warned New Delhi that "anyone" considering business deals with Tehran needs to be aware of the "potential risk of sanctions," once again highlighting Washington's addiction to sanctions.

At a US State Department briefing on Monday, US spokesperson Vedant Patel while answering questions over India’s latest deal with Iran, cautioned of a retaliatory punishment from Washington if it made "business deals" with Tehran.

"We are aware of these reports that Iran and India have signed a deal concerning the Chabahar Port," Patel was quoted as saying. "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," he added.

In reaction to the US threat, Jaishankar said 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 deal.

"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," Jaishankar, 69, was quoted as saying.

"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."

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 Port & Maritime Organization (PMO) of Iran.

Iran and India have signed a 10-year deal for operation and equipment of the southern Iranian port city of Chabahar. This contract allows for the operation of Shahid-Beheshti port within the Chabahar Port Development Project for a duration of 10 years.

During the duration of this decade-long lease agreement, IPGL committed to investing approximately US$120 million to enhance the port's facilities. Additionally, India has extended a credit window of US$250 million for collaborative projects that focus on enhancing the infrastructure associated with Chabahar.

Patel confirmed that the sanctions imposed by the Washington on Tehran are still in effect and will be upheld, and refused for exempting New Delhi for this deal. "US sanctions on Iran remain in place and we will continue to enforce them," he said.

The spokesperson also noted that it would let the Indian government speak on its foreign policy goals. "I will let the government of India speak to its own foreign policy goals vis-à-vis the Chabahar port as well as its own bilateral relationship with Iran," Patel said in the press briefing.

New Delhi has long considered the importance of developing a port in West Asia, and Chabahar acts as a gateway to landlocked Afghanistan and Central Asia for India, bypassing the port of Karachi and Gwadar in its rival Pakistan.

Being an India-Iran joint venture, the port also plays a crucial role with larger connectivity projects of the International North South Transport Corridor (INSTC). The INSTC, established by Iran, India, and Russia, serves as a multi-modal transportation network designed to connect the Indian Ocean and Persian Gulf to the Caspian Sea through Iran, and further extend to northern Europe via St Petersburg in Russia.

To date, New Delhi has furnished the port with six mobile harbor cranes and additional equipment valued at US$25 million. Moreover, a cumulative total of 2.5 million tons of wheat and 2,000 tons of pulses have been successfully transported from India to Afghanistan through Chabahar.

India sees the progress of Chabahar as a venture that has the potential to compete with China's investment in Pakistan's Gwadar region. Meanwhile, ever since the joint project turned into reality in 2003, the US has interfered into India's dreams of operating the port located in Iran's Sistan and Baluchistan province.

India agreed in 2016 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 threat of sanction come in continuation of US sanction policy against Iran as Tehran says Washington is "addicted" to imposing sanctions. Various Iranian institutes and individuals have been targeted by sanctions since the victory of the Islamic Revolution 44 years ago under various pretexts. - Press TV