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'Potential risks' of sanctions imposed on any trade deals with Iran, US warns over Chabahar port agreement

'Potential risks' of sanctions imposed on any trade deals with Iran, US warns over Chabahar port agreement

The United States warned that any country that does business with Iran faces the “potential risk of sanctions,” noting that it is aware that Tehran and New Delhi have signed an agreement regarding the port of Chabahar.

India on Monday signed a ten-year contract to operate Iran's strategic Chabahar port that will help New Delhi expand trade with Central Asia.

Located on the Gulf of Oman in Sistan-Baluchestan province on Iran's energy-rich southern coast, the Chabahar port, which New Delhi proposed developing in 2003, would provide Indian goods with a gateway to landlocked Afghanistan and Pakistan. Central Asia uses a road and railway project called the International North-South Transport Corridor (INSTC), bypassing Pakistan.

US sanctions on Iran over its suspected nuclear program have slowed the development of the port.

He said: “We are aware of these reports that Iran and India have signed an agreement regarding the Chabahar port. I will allow the government of India to speak about its foreign policy objectives regarding the Chabahar port as well as its bilateral relationship with Iran.”

  • Read also: India signs long-term bilateral contract on Chabahar port with Iran

“I will just say, with regard to the United States, that the American sanctions on Iran are still in place and we will continue to implement them,” Patel said in response to a question about the Chabahar port deal.

“You've heard us say this on several occasions, that any entity, anyone considering doing business with Iran, should be aware of the potential risks they are exposing themselves to and the potential risks of sanctions,” Patel said.

India and Iran have envisioned the port as a major hub for the 7,200-kilometre-long INSTC – a multimodal transport project to transport goods between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.

An official statement said that the long-term agreement was signed by the Indian Ports Global Limited (IPGL) and the Iranian Ports and Maritime Organization.

IPGL will invest about $120 million while another $250 million will be raised as debt.

The agreement replaces an initial agreement concluded in 2016, which covered India's operations at the Shahid Beheshti terminal in Chabahar Port and was renewed on an annual basis.

India used Chabahar port last year to send 20,000 tons of wheat aid to Afghanistan. In 2021, the same was used to supply Iran with environmentally friendly pesticides.

The port of Kandla in the state of Gujarat is considered the closest to the port of Chabahar, at a distance of 550 nautical miles, while the distance between Chabahar and Mumbai is 786 nautical miles.

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