US warns of 'sanction risks' after India, Iran sign Chabahar Port deal

The port of Chabahar is located in southeastern Iranian province of Sistan-Baluchestan in the Gulf of Oman. (Image: Reuters)

The US issued a warning statement a few hours after India signed a major agreement to run the Chabahar Port in Iran for 10 years, informing "anyone" who may be considering doing business with Tehran of the "potential risk of sanctions".

Foreign Minister S Jaishankar, India's foreign minister, lauded the agreement and stated that the US has no concerns about it. “The US has no issues with Chabahar,” he said in Mumbai. “And frankly, if something's between me and Iran, it's between me and Iran.”

Principal Deputy Spokesman for the US State Department Vedant Patel talked to the media and confirmed the rumoured agreement between India and Iran on the Chabahar Port.

While the agreement was a bilateral matter between New Delhi and Tehran and that India was free to run its foreign policy as it saw fit, Patel told reporters on Monday that "any entity (or) anyone considering business deals with Iran... need to be aware of the potential risks that they're opening themselves up to the term risk of sanctions".

"We are aware of these reports that Iran and India have signed a deal concerning the Chabahar Port, I would let the Government of India speak to its own foreign policy goals, vis-à-vis the Chabahar Port as well as its own bilateral relationship with Iran," he added in the press briefing on May 13.

"US sanctions on Iran remain in place, and we will continue to enforce them," Patel said, emphasizing the importance of entities considering business dealings with Iran to be cognizant of the associated risks.

Also read: India signs 10-year Chabahar Port pact with Iran

The deal will allow India to lease the Chabahar port, on Iranian coast in the Gulf of Oman, for an extended period of time.

This calculated move would avoid Karachi and the Pakistani ports of Gwadar and create a new commercial route through Iran between South and Central Asia.

Additionally, it gives business communities the chance to investigate alternate transit routes away from the crowded and delicate Persian Gulf and Strait of Hormuz.

Following the opening of Sittwe Port in Myanmar, the contract for Chabahar Port operations will represent yet another significant accomplishment for India's expanding maritime reach in the area, both of which were intended to counteract the increasing influence of China in the area. Sittwe Port was opened by Sarbananda Sonowal in Myanmar.