India To Face Impact As US Revokes Sanctions Exception For Iran's Chabahar Port

India was involved in the making of a terminal at Iran's Chabahar port and will likely face implications after the US government's revocation of the sanctions exception for the port. The waiver will come into effect from Sept 29 onwards.

The revocation comes as US President Donald Trump doubles down on his maximum pressure policy to isolate the Iranian regime. The sanctions exception was issued in 2018 under the Iran Freedom and Counter-Proliferation Act for reconstruction assistance and economic development of Afghanistan.

"Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions under IFCA," the statement said.

India will face implications of this decision due to its involvement in development of a terminal at the Chabahar port on the Gulf of Oman. On May 13, 2024, India signed a 10-year contract to operate the port that will help it expand trade with Central Asia.

This was the first time India will take over the management of an overseas port. New Delhi had proposed to develop Chabahar port way back in 2003 to provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor, bypassing Pakistan.

US sanctions on Iran over its suspected nuclear programme had slowed the development of the port. The long-term agreement was signed by Indian Ports Global Ltd and the Port & Maritime Organisation of Iran.

It replaces an initial 2016 pact, which covered India's operations at Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.

In 2023, Chabahar port was used by India to send 20,000 tonnes of wheat aid to Afghanistan. In 2021, the same was used to supply environmentally friendly pesticides to Iran.

(With PTI Inputs)