With international banking channels frozen with respect to Iran, it is a big challenge for India to negotiate for getting the port into commercial operations on a sustainable scale, Business Standard reported.
Chabahar is India’s first ever venture to run an overseas port, and has been in the works since 2003. Last week, state-owned IOCL and MRPL placed orders to buy 9 million barrels of crude from Iran, but with the condition that the payment is made in rupees. A bank guarantee in euros is impossible for India to offer since it will have to be made through a foreign bank. An official of a concerned government department said with the US sanctions in place and expected to stiffen, no bank would want to offer such a guarantee and lose access to the US market.
The guarantee demanded by Iran is meant to underwrite the revenue share arrangement between the two.
The insistence on a euro currency guarantee is a throwback to negotiations of 2014, when Tehran told New Delhi it would no longer accept payment for gas and oil in rupees, even though it was a currency to bypass the sanctions.
