Trump throws a wrench in India's Iran port plans

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Last year had seen a major shift from the US on its relations with Iran after the then President Barack Obama's administration along with other western powers lifted sanctions imposed on the country.

US President Donald Trump

But like many other Obama-era initiatives that have been under direct attack from the current President, Donald Trump, the major one on the international front has been the undoing of the stance taken on Iran by the previous regime now being undone with the public criticism of the country by Trump.

And though this would be a major problem for Iran, it is turning out to be quite a problem for India as well. With the fear that fresh sanctions might be imposed on the country by the US, throwing a wrench in India's plan to develop the Iranian Port of Chabahar.

While India is keen to go with the project, reluctance on the part of manufacturing companies from the western world to provide supplies such as equipment is being seen as a blow to the country's strategic ambitions.

The port is seen by India as an important part of its hopes to form a transport corridor which would be able to bypass Pakistan and connect directly to Central Asia and Afghanistan.

India has made a major push for the development of the port as a hub for its trade links to the resource-rich countries of the area, as the route to them is complicated due to India's volatile relationship with Pakistan.

And following China's Gwadar port project in Pakistan, close to Chabahar on the Pakistani coast, the BJP government unveiled investment plans centred around the Iranian port and also offered to help build railways, roads and fertiliser plants that could eventually amount to 15 billion dollars.

Such plans picked up speed last year after the sanctions on Iran were lifted, with India committing 500 million dollars soon after it, in order to speed up the development of the port.

This though has not been able to get the development of the port, seen as India's biggest infrastructure project overseas, to get going as till now the state-owned Indian firm working on the project has not been able to give even a single tender for the supply of equipment such as cranes and forklifts, according to Reuters news agency.

While India has been inviting bids for the project, major companies have not been able to take part following the public criticism of Iran by Trump on the campaign trail, which has gotten even stronger after he assumed office.

World's leading Engineering companies such as Liebherr and Finland's Konecranes and Cargotec have reportedly told India Ports Global Pvt Ltd, the Indian company developing the port, that they would not be able to bid as banks are not prepared to facilitate transactions which involve Iran due to uncertainty over US policy, Reuter reported two officials familiar with the matter as having said.

According to reports the first tenders related to the project were floated in September but was unable to attract major bidders due to fear of fresh sanctions. And such concerns have just increased since Trump took over as President in January.

This led to some tenders being even floated as many as three times since September, and a Chinese firm has finally come forward to supply some of the equipment, as per the same report.

This is not the first time that India's transactions related to Iran have been hit by sanctions or their threat, to the country. Earlier following imposition of a set of sanctions India's oil trade with the country was hit hard as it became difficult to make payments for imports from it.

Such sanctions have also hit Iran hard which was one of the reasons that it agreed to follow the restrictions that Western powers wanted on its nuclear programme. And the lifting of sanctions following this helped the country connect with the world's financial system.

But now with Trump raising the rhetoric against it once more, as he called the deal struck between the US and other countries with Iran the "the worst deal ever negotiated," is set to hurt Iran economically again.
As this and wait for clarity of the US policy related to the country continue to delay contracts that Iran wants to sign with international firms in areas such as its oil fields and airlines.

This is happening as banks, which are essential for international business transactions, but have considerable links to the US are not ready to back deals involving Iran as they fear running afoul of sanctions still in place or fresh sanctions that may be imposed.

And its concerns such as these which have hit India's plans related to the Chabahar port. But, as per the report, India's ambassador to Iran has said the situation related to the banking situation is slowly improving and procuring of equipment related to the project was under way.

"Tenders are re-floated for a variety of reasons including technical specifications not being met, etc. Banking channels, in recent months, have in fact somewhat eased," Saurabh Kumar, Indian ambassador to Iran is reported to have said by the news agency. "If some companies do not participate, it really is their business."

Meena Singh Roy, head of the West Asia Centre at the Institute for Defence Studies and Analyses, is reported to have said though the project is of strategic significance for India, the increase in tension between US and Iran would have an impact on the port project.

OneIndia News

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