The government’s decision to slash its allocation for Iran’s Chabahar port by two-thirds in the latest Budget will be a further blow to India-Afghan trade.

Why is it in news?
  • The government’s decision to slash its allocation for Iran’s Chabahar port by two-thirds in the latest Budget will be a further blow to India-Afghan trade.
  • India-Afghan trade is already hit by Pakistan’s decision to ban airspace rights to most flights to and from India, and U.S. sanctions on Iran.
More in news
  • Budget 2019-2020 allocation:
  • The government, which had been allocating ₹150 crore for the port each year for the past few years, has slashed its allocation to just Rs 45 crore in the Budget for 2019-2020.
  • Reasons given by Ministry of External Affairs (MEA):
    (1) It said that the figure reflected a readjustment in the budgetary allocation based on a realistic assessment of likely expenditure to be incurred this financial year.
    (2)It indicates that India does not anticipate developing Chabahar port at the same pace as earlier.
  • Waiver of little help:
    (1) Technically, the U.S. has issued India a waiver to develop Chabahar port, to promote trade with Afghanistan as a part of its “South Asia” strategy.
    (2) In practice, however, the cancellation of all waivers for oil and crippling economic sanctions imposed by the Trump administration resulted in frozen deals.
    (3) Afghan banks are hesitant to open credit lines for shipments, and shippers and cargo handlers are staying away from servicing the Iranian port.
Source
The Hindu




Posted by Jawwad Kazi on 8th Jul 2019
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