- The government in its Budget has allocated ₹45 crore for India’s building activities in the port of Chabahar Iran.This is a reduction from the previous year’s allocation of ₹150 crore.
- Experts have said that this reduction will affect the India-Afghan trade, which is already hit by (a)Pakistan’s decision to ban airspace rights to most flights to and from India and (b)U.S. sanctions on Iran.
- Earlier,the U.S. had issued India a waiver to develop Chabahar port to promote trade with Afghanistan as a part of its South Asia strategy.But the cancellation of all waivers for oil and economic sanctions imposed by the US administration have halted trade.
- However,Afghan officials have said that flights including commercial passenger airlines had carried cargo between the two countries since June 2017 under an arrangement where the Afghan government subsidies about 80% of the transport costs to promote India-Afghan trade.
- Chabahar port which was inaugurated in 2017 has been built largely by India.It provides a key supply route for Afghanistan while allowing India to bypass rival Pakistan to trade with Central Asia.
