US President Donald Trump’s decision to reimpose tough sanctions on Iran has cast a long shadow over India’s ambitious investment in Chabahar port, a key trade gateway in the south of the Middle Eastern country.
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With Prime Minister Narendra Modi scheduled to meet Trump in Washington from Wednesday, the fate of India’s US$370 million project hangs in the balance.
On February 6, Trump signed a national-security memorandum aiming to clamp down on Iran’s financial lifelines, including its oil exports and port operations. The directive orders US envoy to the United Nations, Dorothy Shea, to “work with key allies to complete the snapback of international sanctions and restrictions on Iran” and hold it accountable for “its breach of the nuclear non-proliferation treaty”.
India previously secured a waiver on US sanctions for Chabahar, in recognition of its role in delivering humanitarian aid to Afghanistan and creating an alternative Central Asian trade route to bypass Pakistan. However, Trump’s renewed hardline stance raises doubts about the waiver’s future – putting at risk India’s strategic and financial investments in the port.
“Any cancellation of the US sanctions waiver on Chabahar is certainly going to seriously impact the port project,” said Harsh Pant, professor of international relations at King’s College London. “India has invested considerably, and it is seen as very important for India’s connectivity.”
The indirect threat of US sanctions during Trump’s first term forced India to stop buying crude oil from Iran, which until then had been among the top three suppliers to the South Asian nation.