Home / Politics / Policy /  Souring US-Iran ties may spell trouble for Chabahar port

New Delhi: India is keeping a wary eye on the strains developing in US-Iran relations after the Trump administration slapped sanctions on the West Asian country over its missile programme.

Deterioration in US-Iran ties could spell trouble for India’s plans to develop the Chabahar port, which New Delhi sees as key to gaining access to landlocked Afghanistan and Central Asia. The project first found mention in an India-Iran joint statement issued in 2003. Fourteen years later, the venture is far from fruition—thanks mainly to India being caught up in US-Iran tensions.

In the annual budget unveiled on 1 February, the Narendra Modi government has allocated some $21 million for the project. With New Delhi trying to establish rapport with the Trump administration, it could be constrained to go slow on Chabahar if US-Iran ties nosedive further. Connectivity apart, Iran is also a key source of energy for India.

ALSO READ | US imposes new sanctions on Iran as Trump seeks to punish missile tests

The sanctions announced by the US on Iran on Friday seem to be the opening salvo by President Donald Trump who has threatened a more aggressive policy toward Iran than the one followed by his predecessor Barack Obama.

Iran’s ballistic missile programme has been a thorny issue with countries like the US, since the nuclear deal took effect last January. The deal—clinched in Vienna in July 2015—commits Iran to providing the International Atomic Energy Agency (IAEA) with greater access and information on its nuclear programme. As a presidential candidate, Trump had criticized the Iran deal. He had also labelled Iran the “biggest sponsor of terrorism around the world."

For India, the current state of events seems to present a dilemma as it looks to establish a working relationship with Washington. Three people familiar with the matter in the Indian government described the situation as “challenging but not unmanageable."

“Iran has been under sanctions in the past. India accepts UN sanctions, not unilateral sanctions," said one of the people cited above.

In May, India and Iran signed a pact to develop the Chabahar port on the Gulf of Oman. The Chabahar port is less than 100km from Pakistan’s Chinese-constructed port of Gwadar, part of a project to open up an energy and trade corridor from the Gulf to western China.

India, Iran and Afghanistan have also signed a trilateral connectivity pact to open an alternative route for Afghanistan, to access markets like India.

ALSO READ | Iran tests missile and radar systems, defying US sanctions

Analysts and Indian government officials agree clinching the Iran nuclear deal allowed India the diplomatic space to move ahead with Iran on these pacts.

India’s view seems to be that US sanctions on Iran are unlikely to affect Chabahar as similar past strictures had not targeted Iranian infrastructure projects. “It is also to be seen how the European nations that negotiated the nuclear deal with the US react to the sanctions or any pullout from the deal," a second person familiar with the matter said.

In the past, India had worked out alternatives to US sanctions, the second person said. India worked out a rupee payment deal with Iran to pay for oil purchases after the Obama administration imposed crippling sanctions on financial institutions dealing with Iran in 2012—in a bid to choke Iran oil sales.

But some analysts say moving against US policy on Iran would put New Delhi at odds with the Trump administration. “The Trump administration will be a difficult partner to deal with on this issue," said Harsh V. Pant, professor of International Relations at King’s College in London.

With the Gwadar port in Pakistan, open for business and China and Pakistan pushing full steam ahead with the $51 billion China-Pakistan Economic Corridor, any delay on Chabahar port “will be a very serious setback," Pant added.

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