Two months after India inked a 10-year agreement to develop and operate Iran’s Chabahar Port, concerns have emerged regarding the deal’s compliance with U.S. sanctions on Iran. Ali Akbar Safaei, Head of Iran’s Ports and Maritime Organization, revealed in a recent interview that certain aspects of the agreement are being kept confidential to avoid potential U.S. sanctions. This disclosure has intensified scrutiny over the deal’s implications.
Safaei, when asked about the future activities of the Indian operator in Chabahar, refrained from divulging all details, citing confidentiality clauses. He noted, “The contract with the Indian operator is public but some of its aspects have been made confidential. There may be the possibility of India coming under U.S. pressure in the event all details of the contract are made public to the media.”
India views the Chabahar port as a strategic asset to enhance trade with landlocked Afghanistan and Central Asian nations. The port plays a pivotal role in the International North-South Transport Corridor (INSTC), a multi-modal network designed to connect the Indian Ocean and the Persian Gulf to the Caspian Sea through Iran. Other INSTC members include Russia and several Central Asian countries. Notably, Chabahar competes directly with the Chinese-backed Gwadar Port in Pakistan, located just 100 miles away and targeting similar hinterland regions.
India’s involvement in Chabahar has been contentious, given Iran’s ongoing economic sanctions from the U.S. The U.S. State Department has warned that any entity engaging in business with Iran risks facing sanctions. This has led to speculation about how the U.S. might respond to the India-Iran port agreement.
India initially signed a short-term deal for Chabahar in 2018 and has since followed up with several agreements, culminating in a 10-year deal signed in May 2024. When announcing the latest deal, India’s Foreign Ministry attempted to ease tensions by emphasizing that New Delhi would “communicate the benefits” of the Chabahar deal to the U.S. and urged countries not to view the agreement narrowly.
During the Trump administration, the U.S. adopted a stringent stance against Iran but issued a sanctions waiver to India for the Chabahar port deal in December 2018. Then-Secretary of State Mike Pompeo justified the waiver, stating the port was intended to support Afghanistan economically.
Confidential Clauses Spark Worries About Potential Sanction Violations
The Chabahar port deal underscores the delicate balance in the India-U.S. relationship, particularly as India navigates its national interests, occasionally in ways that appear to sidestep U.S.-led sanctions. India, currently one of the largest buyers of Russian seaborne crude since Western sanctions against Moscow, recently agreed to purchase oil from Russia in rubles. This follows severe sanctions by the EU and the U.S. on Russia’s financial sector, restricting trade in dollars and euros.
India’s strategic investments in Chabahar are designed to bolster regional trade and connectivity, enhancing its geopolitical leverage. However, these investments are fraught with risks, particularly concerning the potential fallout from U.S. sanctions on Iran. The confidentiality surrounding certain clauses of the Chabahar agreement reflects the complexities and sensitivities involved in navigating international sanctions while pursuing national strategic goals.
The evolving dynamics of the Chabahar port deal illustrate the intricate interplay between global trade ambitions and geopolitical constraints. As India continues to strengthen its infrastructure and trade routes through strategic partnerships, it must also carefully manage the potential repercussions of international sanctions, particularly those imposed by the U.S. The coming months will likely reveal more about how this balance will be achieved and whether the confidential aspects of the deal will shield India from potential punitive measures.
