India Confirms 6-Month Exemption From US Sanctions On Iran's Chabahar Port

American sanctions will not apply to India's Chabahar Port in Iran effective retrospectively from October 29, the Ministry of External Affairs (MEA) said today. The government last year signed a 10-year contract with Iran in which the state-run India Ports Global Ltd (IPGL) promised $370 million of investments in Chabahar - a strategic port for India.

Chabahar is seen as a gateway to the Indian Ocean, and is also critical for India's humanitarian aid for the people of Afghanistan.

The MEA's announcement comes amid India and the US' hectic negotiations in finalising a major trade deal.

"We continue to remain engaged with the US side on finalising the trade deal. Both sides are continuing to hold discussions. For any further update, I would refer you to the Ministry of Commerce," MEA spokesperson Randhir Jaiswal said.

In 2018 too, the first Trump administration issued a rare exemption to allow Indian companies to keep developing Chabahar, even when the US imposed sweeping unilateral sanctions on Iran, whose main port at Bandar Abbas was overcapacity.

Last month's US action on Chabahar Port came as part of wider UN sanctions that kicked in on Iran over its nuclear programme.

The MEA said India is also analysing any implications of US sanctions on Russian oil companies.

"We are studying the implications of the recent US sanctions on Russian oil companies. Our decisions naturally take into account the evolving dynamics of the global market," the MEA said.

"Our position on the larger question of energy sourcing is well-known. In this endeavour, we are guided by the imperative to secure affordable energy from diverse sources to meet the energy security needs of our 1.4 billion people," the spokesperson said.

External Affairs Minister S Jaishankar's retort to the West in April 2022 on criticism over India's oil purchase from Russia is well-known. He had said India's total purchase of oil from Russia in a month was probably less than what Europe does in an afternoon.

"...If you are looking at energy purchases from Russia, I would suggest that your attention should be focused on Europe. We do buy some energy, which is necessary for our energy security. But I suspect looking at the figures, probably our total purchases for the month would be less than what Europe does in an afternoon," Mr Jaishankar had told reporters.

Chabahar Port is located in Sistan-Balochistan province in Iran's southern coast. India is operating the Shahid Beheshti terminal at the port. Neighbouring Afghanistan also values the Chabahar Port highly as it offers the landlocked country a direct link to the Arabian Sea and beyond, bypassing Pakistan.

India and the US are "very near" to finalising the bilateral trade deal. However, Commerce and Industry Minister Piyush Goyal has said India will not do any deal in a hurry or with a "gun to our head".

Goyal on Thursday said India-US trade talks are progressing, and expressed hope that both sides would work towards a fair and equitable agreement in the near future.