Italian media: Sanctions on Iran by the United States also bring challenges to India, while opening the door for China

India is weighing the consequences of the US revoking its exemption for Iran's Chabahar port. India has invested hundreds of millions of dollars in the port, building it into a strategic hub to Central Asia, balancing China's presence in Gwadar port. New sanctions could stall the project and further strain India's relations with Washington. Previously, the two countries' relations had been troubled by tariffs and new visa restrictions. Analysts warn that in the long run, China may be the real winner of this crisis.

New Delhi (Asia News) – India is considering how to respond to the US sanctions imposed on Iran this week – which also affect the Chabahar port that India has invested in developing, and India-US relations are becoming increasingly tense. The decision regarding Iran not only threatens India's ambitions, but could also benefit China in the long run.

India's Foreign Ministry spokesperson Randhir Jaiswal confirmed that the government "is currently reviewing the impact of this withdrawal on India." He was referring to an exemption policy implemented since 2018 for Indian projects, which was announced on September 16 and took effect on September 29. Sanctions could hinder investment, significantly delay port construction, and force relevant companies, including state-owned Indian Ports Global Limited (IPGL), to exit the project within a specified time frame to avoid potential secondary sanctions, such as freezing their assets in the US and prohibiting transactions.

Chabahar port holds significant strategic value for Delhi. India took over the operation of the port in December 2018 and pledged to advance modernization of facilities, positioning it as a key hub for the International North-South Transport Corridor (INSTC). The core advantage of the port lies in providing direct access to Afghanistan and energy-rich Central Asia, thus bypassing historical rival Pakistan. Analysts point out that the project is also a strategic countermeasure against China's major initiative under the Belt and Road Initiative – Gwadar port in Balochistan province. The two ports are only 200 kilometers apart.

Despite changes in the geopolitical landscape (especially the Taliban's takeover of Kabul in 2021), India has recently reaffirmed its commitment to the port infrastructure. In May 2024, India signed a ten-year, $370 million contract with Iran for the operation and development of the port. The agreement envisages India investing about $120 million for equipment construction and providing Iran with $250 million in loans for related infrastructure development.

The decision to revoke the sanction exemption aligns with the Trump administration's renewed "maximum pressure" policy on Iran. However, this move comes at a time when US-India relations are increasingly tense. The initial exemption in 2018 aimed to support the reconstruction and economic stability of Afghanistan.

Some analysts believe that Washington is taking every opportunity to pressure New Delhi. Recent punitive measures by the US include imposing a 50% tariff on Indian imported products and charging up to $100,000 new fees for H1-B visas (which many Indian professionals benefit from). Some experts believe that lifting the sanctions on Chabahar port is part of an ongoing trade negotiation strategy, as the Trump administration attempts to extract as much benefit as possible from the currently struggling India.

Delhi can take a wait-and-see approach, hoping that the US government will understand the importance of maintaining a solid relationship with China. During its first term, India complied with US sanctions regulations, halting the import of Iranian crude oil (now Trump is asking New Delhi to stop purchasing Russian crude oil), which made China the sole buyer of discounted oil from Tehran. Alternatively, India can choose to maintain the sanctions as part of a broader effort to align with non-Western powers such as Russia and China. These countries aim to reduce dependence on the US economy and stay away from the US-dominated financial network.

Currently, India's trade with Central Asia is limited (slightly over $2 billion annually), so the impact of reimposing sanctions on Iran will not be immediate. However, in the long run, Beijing seems inevitable to (again) benefit.

Source: Asia News

Original: www.toutiao.com/article/1845094625274888/

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