Thursday, 22 November, 2018

USA exempts India-backed port in Iran from sanctions

Iranian Foreign Minister Mohammad Javad Zarif Iranian Foreign Minister Mohammad Javad Zarif
Melinda Barton | 08 November, 2018, 18:14

Futures in NY gained 0.6 per cent. Ministers from the Organization of Petroleum Exporting Countries gathering in Abu Dhabi this weekend will discuss options for 2019 including the scenario of supply curbs, delegates said.

This exemption is in addition to "temporary allotments" - Significant Reduction Exemptions -from sanctions that the United States announced for India and seven major importers of Iranian crude oil on Monday, when the second and final round of sanctions went into effect fully.

On Tuesday, the State Department clarified that Chabahar and an Afghanistan specific railway project (under INSTC) would be kept out of the sanctions for the goal of "development" of Afghanistan.

"These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief", the spokesman said in a statement emailed to Reuters.

Since Monday, the United States has aimed to end all of Iran's sales of oil, its crucial export, in a bid to curtail the influence of the Shiite cleric-led state.

India has invested $500 million (approximately Rs 3,600 crore at current exchange rate) in the Chabahar project, which will connect the country with Afghanistan and Central Asia, bypassing Pakistan.

The port in the Sistan-Balochistan province in the energy-rich nation's southern coast is easily accessible from India's western coast and is increasingly seen as a counter to Pakistan's Gwadar Port, which is being developed with Chinese investment and is located at distance of around 80 kms from Chabahar.

One member of the cartel, which has been cutting production involuntarily due to USA sanctions, appeared to welcome the prospect of other nations doing the same.

"We are making it abundantly clear to the Iranian regime that they will face mounting financial isolation until they fundamentally change their destabilizing behavior". Reacting to the Trump administration's decision, U.S. experts said it was a "right move".

"The U.S. administration will come to regret taking these ridiculous measures", Anadolu News Agency quoted Zarif, as saying.

"Combined with the importance, this administration places on developing good ties with India, there was a compelling geopolitical case to be made for a waiver", he said.

The sanctions exception granted to the Chabahar project aims to further USA ties with Afghanistan and India "as we execute a policy of maximum pressure to change the Iranian regime's destabilizing policies in the region and beyond", the State Department spokesman said. It understands India's national security interests.

Chabahar and INSTC are important strategic projects for India and Afghanistan.

The move by the Donald Trump administration is considered as an endorsement by Washington of India's major role in the development of the port on the Gulf of Oman, which is of enormous strategic importance for the reconstruction of war-torn Afghanistan. "So this waiver is squarely aligned with the United States interests", he said.