Indian strategic ambitions in the region get a blow by US Sanctions

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Indian strategic ambitions in the region get a blow by US Sanctions

Western manufacturers are shying away from supplying equipment for an Iranian port that India is developing for fear the United States may reimpose sanctions on Tehran, Indian officials say, dealing a blow to New Delhi's strategic ambitions in the region.

Lying on the Gulf of Oman along the approaches to the Straits of Hormuz, the port of Chabahar is central to India's hopes to crack open a transport corridor to Central Asia and Afghanistan that bypasses arch-rival Pakistan.

Graphic on Silk Road: bit.ly/2rdsFDt

India committed $500 million to speed development of the port after sanctions on Iran were lifted following a deal struck between major powers and Tehran to curb its nuclear program in 2015.

But the state-owned Indian firm that is developing Chabahar is yet to award a single tender for supplying equipment such as cranes and forklifts, according to two government sources tracking India's biggest overseas infrastructure push.

U.S. President Donald Trump denounced the nuclear agreement on the campaign trail, and since taking office in January has accused Iran of being a threat to countries across the Middle East.

Swiss engineering group Liebherr and Finland's Konecranes and Cargotec have told India Ports Global Pvt Ltd, which is developing the deep water port, they were unable to take part in the bids as their banks were not ready to facilitate transactions involving Iran due to the uncertainty over U.S. policy, the two officials said in separate conversations with Reuters.

These firms dominate the market for customized equipment to develop jetties and container terminals. One official said the first tender was floated in September, but attracted few bidders because of the fear of renewed sanctions. That fear has intensified since January.

"Now the situation is that we are running after suppliers," one official said, speaking on condition of anonymity because of the sensitivity of matter.

A Konecranes spokeswoman declined to comment beyond confirming the company was not involved in the project.