India announced on Thursday that the US administration had lifted the restrictions imposed on Iran’s Chabahar port, which New Delhi has built over the last ten years as a vital entry point for growing trade and transit with the area. The exemption will last for six months.
A long-standing sanctions waiver that permitted India to establish a presence at the strategically important Iranian port on the Gulf of Oman was rescinded by the Trump administration more than a month ago. Randhir Jaiswal, a spokesman for the external affairs ministry, told a weekly media conference, “I can confirm that we have been granted exemption for a six-month period on the American sanctions that were applicable on Chabahar.” On October 29, the waiver went into effect.
A month or so after the Indian side approached the US administration for talks on the issue, the US administration first offered an exemption, according to people familiar with the situation. The six-month exemption that the US side formally communicated this week came next. The US State Department had previously declared that on September 29, the sanctions waiver for Chahbahar port that had been granted in 2018 will be withdrawn.
At a period when US forces were still fighting the Afghan Taliban, the waiver was given during the first term of US President Donald Trump in exchange for developing alternate connectivity to Afghanistan that avoided Pakistan. The US and India supported Kabul’s former civilian government at the time.
The waiver was revoked in accordance with President Donald Trump’s “maximum pressure policy to isolate the Iranian regime,” according to the US State Department. The state department stated that sanctions under the Iran Freedom and Counter-Proliferation Act (IFCA) might be imposed on “persons who operate the Chabahar Port or engage in other activities,” adding that the exception was granted for Afghanistan’s economic growth and rehabilitation.
In 2018, state-owned India Ports Global Limited (IPGL) assumed control of the Shahid Beheshti terminal, which India had constructed at Chabahar port. A long-term deal that covers IGPL’s operations at Chabahar for ten years was reached by Iran and India last year.
In accordance with this deal, IGPL intends to spend over $120 million on the Shahid Beheshti terminal’s equipment, including the purchase of forklifts, pneumatic unloaders, rail-mounted quay cranes, and mobile harbor cranes. India has granted a credit window of $250 million for projects targeted at enhancing Chabahar-related infrastructure.
However, India’s attempts to purchase equipment for the port—which New Delhi views as essential for enhancing connection with Afghanistan and the Central Asian states—have long been impeded by US sanctions on Iran due to its nuclear program.