 "India-Iran Chabahar deal: How Jaishankar responded to US sanctions warning")
External Affairs Minister (EAM) S Jaishankar on Tuesday said that the Chabahar Port project in Iran will benefit the entire region and people should not take a "narrow view" of it, a day after the United States (US) warned of "potential risk of sanctions" after India inked a 10-year agreement for running the port.
The EAM pointed out that the US itself had appreciated Chabahar's larger relevance in the past. The EAM's remarks, made during an interaction after the launch of the Bangla edition of his book 'Why Bharat Matters' in Kolkata, were reported by a news agency.
India Ports Global Ltd (IPGL) and the Ports and Maritime Organisation (PMO) of Iran on Monday signed the Long-Term Bilateral Contract on Chabahar Port, enabling the operation of the Shahid Beheshti Port terminal in the Chabahar Port Development Project for a period of 10 years.
India's 10-year bilateral contract with Iran for operating the Chabahar Port is likely to bring in an investment of approximately $370 million, comprising a direct investment of $120 million from India for infrastructure development and a $250 million line of credit to Iran, Business Standard reported on Monday. Moreover, the agreement can be extended by mutual consent.
'Don't take a narrow view'
On being asked about the US' remarks, Jaishankar said, "I did see some of the remarks which were made, but I think it's a question of communicating, convincing and getting people to understand that this is actually for everyone's benefit."
The EAM added, "I don't think people should take a narrow view of it."
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"They (US) have not done so in the past. So, if you look at the US' own attitude towards the port in Chabahar, the US has been appreciative of the fact that Chabahar has a larger relevance... we will work at it," said Jaishankar.
Jaishankar pointed out that despite India having a long association with the Chabahar project, New Delhi was still not able to sign a long-term pact in the past.
"We have had a long association with the Chabahar Port, but we could never sign a long-term agreement. The reason was... there were various problems on the Iranian end... the joint-venture partner changes, the condition changed," the EAM said.
He added that New Delhi was able to sort out the issues and finally sign the long-term agreement, which would benefit the entire region.
"The long-term agreement is necessary, because without it you cannot really improve the port operation. And the port operation we believe will benefit the entire region," said the EAM.
In 2018, IPGL took over a part of the operations at Shahid Beheshti. But, India was operating the port on a short-term agreement, which had to be renewed periodically. The short-term agreement and Iran's geopolitical tensions had kept shipping companies and investors at bay when it came to investing in Chabahar.
In the works for years, the long-term agreement for the operation and management of Chabahar Port had been stalled for various reasons. Negotiations between India and Iran had faced a deadlock after Tehran refused to agree to an international arbitration framework, citing the need for a constitutional amendment. However, most of the clauses, including arbitration, that had been a point of contention have been agreed on now.
'Potential risk of sanctions'
The US warned on Monday that any country having business dealings with Iran runs the "potential risk of sanctions", noting that it was aware that Tehran and New Delhi had signed a deal concerning the Chabahar port. The warning came despite the Chabahar port being previously exempt from US sanctions.
"We're aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its bilateral relationship with Iran," US State Department Deputy Spokesperson Vedant Patel told reporters at his daily news conference on Monday.
In response to a question on the Chabahar port deal, Patel added: "I will just say, as it relates to the United States, US sanctions on Iran remain in place and we'll continue to enforce them."
When asked whether these sanctions would apply against Indian firms, Patel said, "You've heard us say this in a number of instances, that any entity, anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions."
When asked whether there was any specific exemption for the latest agreement between India and Iran on Chabahar, Patel gave a single word answer: "No."
US' narrow exception for Chabahar
India has invested in the Chabahar port's infrastructure and has been involved in upgrading its facilities to make it a viable transit route for Indian goods bound for Afghanistan and Central Asia. While India has been a key player in Chabahar's development since 2003, US sanctions on Iran over its nuclear programme have slowed the development of the port.
In November 2018, the US had exempted India from certain sanctions for the development of the Chabahar port and the construction of a railway line connecting it with Afghanistan.
The decision to give an exemption by then US President Donald Trump's administration, which had just imposed tough sanctions on Iran, was seen as a recognition by Washington of India's role in the development of the Chabahar port, which was considered to be of strategic importance for the development of Afghanistan.
In its statement, the US State Department had said that after extensive consideration, in November 2018, the administration had granted a narrow exception under section 1244 of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) to allow a limited number of activities that supported the reconstruction and development of Afghanistan, a key US national security interest.
According to the statement, the exception provided for Afghanistan's development and reconstruction and allowed for the operation of the Chabahar port in support of those goals.
Back then, the State Department had said that the US president's South Asia strategy underscored the US' support of Afghanistan's economic growth and development, as well as its close partnership with India.
Circumstances became favourable for Chabahar after Iran, the European Union, and the five permanent members of the United Nations Security Council plus Germany (P5+1) signed the Joint Comprehensive Plan of Action (JCPOA).
Under the deal, a control and monitoring regime was imposed on Iran's uranium enrichment levels to prevent the weaponisation of its nuclear programme.
In return, some of the sanctions imposed on Iran were lifted, making it possible for India to push investments in the country.
However, President Trump's administration ceased US participation in the JCPOA in 2018 and reimposed all US sanctions that had been eased pursuant to the JCPOA.
Then, in August 2021, the US officially ended its military presence in Afghanistan after two decades of American involvement triggered by the September 11 terrorist attacks.
Why Chabahar matters
An India-Iran flagship project located at the mouth of the Gulf of Oman, the Chabahar Port offers India an alternative route for trade with landlocked Afghanistan and Central Asia -- with Pakistan denying India land access to these regions.
It is also considered a gateway for unlocking India's trade potential with European countries, since Chabahar is part of the proposed International North-South Transport Corridor (INSTC).
(With inputs from Dhruvaksh Saha & agencies)