US threatens India with sanctions over Iran trade deal

A day after New Delhi and Tehran signed a 10-year deal to develop Chabahar port, the US warned of a "potential risk of sanctions" against India.

The contract signed between New Delhi-backed India Port Global Limited (IPGL) and Iran's Ports and Maritime Organization (PMO) on Monday replaces a 2016 agreement that had to be renewed every year.

 The new pact, which has been negotiated for the past three years, provides for renewal every 10 years.

Under the terms of the agreement, IPGL will invest approximately $120 million in equipment at Chabahar Port's Shahid Beheshti Terminal.

External Affairs Minister Jaishankar (EAM) has informed Iran's Foreign Minister Hossein Amirabdollahian in a letter that New Delhi will provide a $250 million "loan window" for port development in the Gulf of Oman.

The letter was delivered to Amirabdollahian by Indian Minister of Ports, Shipping and Waterways Sarbanand Sonwal.
 
Threat of US sanctions

Hours after signing the long-awaited contract, a spokesperson for the US State Department told a regular press briefing that the US would continue to apply sanctions against entities involved in business dealings with Iran.
 
“I will allow the Indian government to speak about its own foreign policy objectives regarding the Chabahar port as well as its bilateral relations with Iran.

 I will just say that as far as the United States is concerned, U.S. sanctions against Iran remain in effect and we will continue to enforce them,” State Department Principal Deputy Press Secretary Vedant Patel said.

 “Any entity, anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions,” Patel said, ruling out any exemptions for India.

 According to a Congressional Research Service (CRS) report, the United States' broad sanctions against Iran target the energy, banking, shipping, construction, mining, manufacturing, and defense sectors.

 However, humanitarian aid transiting through Chabahar port was exempted from US sanctions.

 To date, India has used the Chabahar port to transport approximately 2.5 million tons of wheat to Afghanistan to help overcome food shortages in Kabul.