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.