Iran late past year inaugurated the port on the Indian Ocean, which is being built largely by India and is expected to provide a key supply route for Afghanistan while allowing India to bypass rival Pakistan to trade with Central Asia and Africa.
In October-November 2017, India successfully despatched an inaugural consignment of around 15,000 tons of wheat from the Indian port of Kandla in Gujarat to Afghanistan via Chabahar, in line with its commitment to provide 1.1 million tons of wheat to Afghanistan on a grant basis.
US President Donald Trump's administration in May reinstated all sanctions lifted under the 2015 nuclear deal, targeting both Iran and countries that trade with it in oil, financial transactions with its Central Bank and the country's port sector.
The U.S. State Department says it is exempting Iran's big port project in Chabahar from sanctions in recognition of its importance to landlocked Afghanistan.
"After extensive consideration, the United States has provided an exception under the Iran Freedom and Counter-Proliferation Act to allow #Afghanistan to continue to import petroleum products from Iran and for shipment of non-sanctionable goods through #Chabahar Port for Afg", tweeted Bass.
"The president's [Donald Trump's] South Asia strategy underscores our ongoing support of Afghanistan's economic growth and development as well as our close partnership with India", said the official.
With Pakistan denying India land transit through to reach Afghanistan, New Delhi developed an alternate route through Chabahar port in Iran, which it helped develop partly and also operates now. Steven Mnuchin, US Treasury Secretary, said Washington aimed to bring Iranian oil exports to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. "These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief".
"Trump administration made the right move by exempting India for the development of the Chabahar port", Jeff Smith of the Heritage Foundation told PTI.
Since South Korea's currency has low convertibility, . the official said, the negotiating team assured the US that this method of transaction will not allow USA dollars or other foreign currencies to flow into Iran.
India, Smith argued, "made a convincing case" that its principal interest in the port was to develop alternative infrastructure links to Afghanistan that bypass Pakistan, which also serves the U.S. national security interests.
"This exception relates to reconstruction assistance and economic development for Afghanistan".