Published: Wed, November 07, 2018
Finance | By Loren Pratt

U.S. exempts India-backed port in Iran from sanctions

U.S. exempts India-backed port in Iran from sanctions

Meanwhile, US ambassador to Afghanistan John Bass said the US has, after extensive consideration, provided an exception under the Iran Freedom and Counter-Proliferation Act.

India has invested $500 million (approximately Rs 3,600 crore at current exchange rate) in the Chabahar project, which will connect the country with Afghanistan and Central Asia, bypassing Pakistan.

Early on Monday the U.S. imposed its "toughest ever" sanctions on Iran that it had earlier lifted after the signing of the nuclear agreement in July, 2015 between Tehran and Russia, China, the UK, France, Germany and the US.

On November 5, the Trump administration had imposed the "toughest-ever" sanctions on Iran's banking, energy and shipping industries, in a move aimed at altering the "behaviour" of the country's regime.

In May 2016, India, Iran and Afghanistan inked a pact which entailed establishment of Transit and Transport Corridor among the three countries using Chabahar Port as one of the regional hubs for sea transportation in Iran, besides multi-modal transport of goods and passengers across the three nations. "These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief", said the US State Department Spokesperson.

US waivers for Iranian oil purchases are likely to be more extensive than the market expects, with the combined range seen at 1.2 million to 1.7 million barrels a day, FGE Chairman Fereidun Fesharaki said in a note.


Pompeo's decision to give India exemption from imposition of certain sanctions for the development of the port is driven by the South Asian strategy, which was announced by President Donald Trump in August.

And the U.S., the official said, seeks to "build on our close relationships with both countries as we execute a policy of maximum pressure to change the Iranian regime's destabilising policies in the region and beyond".

The foreign minister further stated that while previous US Presidents have also displayed "disrespectful attitudes" towards Iran, they have eventually changed their stance, and said the Trump administration will have to do the same.

New Delhi has poured $2 billion into development in Afghanistan since the 2001 USA -led overthrow of the Taliban government. This administration doesn't consider its own national interests; it only serves a small group. It sees the Chabahar port as a key way of both sending supplies to Afghanistan and stepping up trade with Central Asia and Africa.

Chabahar and INSTC are important strategic projects for India and Afghanistan. Further drop in Iranian production is expected but the extent will depend on negotiations between the US and countries potentially seeking waivers, Fatih Birol, IEA Executive Director, said in an interview.

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