Amid US-sanction fears, can India, Iran move ahead with $370M port deal?

KARACHI, Pakistan — Having signed a long-term bilateral deal in May, New Delhi and Tehran felt that they could finally make meaningful progress on Chabahar, Iran’s only port with direct access to the Indian Ocean. Though India had another agreement with Iran for the port signed in 2016, their earlier plans never took off, even though New Delhi obtained a sanctions waiver from Washington in 2018 in order to proceed with the work. 

Under the new agreement, the India Ports Global company will be allowed to operate and develop the Shahid Beheshti port within Chabahar — which consists of two separate ports, the other one being Shahid Kalantari — for 10 years. 

But just hours after New Delhi finalized the second deal in May, the United States warned of potential sanctions on any country that has business deal with Tehran. In a May 14 press briefing, State Department deputy spokesman Vedant Patel emphasized that “all Iran sanctions” are still in place, adding, “We advise anyone considering business deals with Iran to be aware of the potential risks.”

Though the Trump administration had exempted the Chabahar project from sanctions because of the role India played in Afghanistan’s reconstruction, US-Iran ties have only worsened since last October due to Iran’s support for Hamas in the Gaza war. In fact, over the past three years, the United States has imposed more than 600 sanctions on Iran-related entities.