Syllabus:

GS2: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. 

Context: The United States has recently withdrawn the sanctions waiver for Iran’s Chabahar port, developed by India, thereby ending the exemption first granted in 2018 during the Trump administration’s initial term (2017–2021).

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• The waiver issued under the Iran Freedom and Counter-Proliferation Act (IFCA) had allowed India and other countries to continue work on the port without facing US penalties. 

Reasons Behind Withdrawal

• In line with President Trump’s maximum pressure policy aimed at isolating the Iranian regime, the Secretary of State has revoked the sanctions waiver. 

• The United States contends that circumstances have changed, citing the Taliban’s takeover of Afghanistan in 2021 and concerns that Iran may be diverting revenues toward activities deemed objectionable by Washington.

Implications on India 

• Strategic Access to Afghanistan and Central Asia: The port is India’s primary gateway to Afghanistan and Central Asia, bypassing Pakistan. Losing or risking access could undermine India's influence and connectivity to these regions.

• Economic and Investment Risks: India’s substantial investments in the port’s infrastructure face jeopardy, with potential losses from halted operations or sanctions.

• Counterbalance to China’s Influence: Chabahar counters China's Gwadar port in Pakistan. US actions that weaken India’s role may enhance Chinese dominance in the region.

• Impact on International Trade Connectivity: The International North-South Transport Corridor  (INSTC), vital for India-Europe trade, relies on Chabahar. Sanctions could disrupt this corridor, affecting broader economic ambitions.

• Diplomatic Strain: The move puts India in a difficult position balancing its strategic partnership with the US and maintaining cordial ties with Iran.

Chabahar Port

• It is a seaport located in Chabahar in southeastern Iran, on the Gulf of Oman. 

• It serves as Iran's only oceanic port, and consists of two separate ports named Shahid Kalantari and Shahid Beheshti, each of which has five berths. 

• It is often referred to as the Golden Gate as it grants access to landlocked Afghanistan and other Central Asian countries through the sea. 

• It is only about 170 kilometres west of the Pakistani port of Gwadar.

Sources:
FirstPost
The Hindu
NEWSONAIR