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How India may be affected by US scrapping Iran nuclear deal 5/9/2018 1:19:38 PM Agencies NW DELHI: US President Donald Trump yesterday scrapped the Iran nuclear deal signed by his predecessor Barack Obama. The 2015 deal with Iran ended its economic isolation from the rest of the world, including from India, which has since boosted ties with Tehran. Now, though, with the US re-imposing sanctions on Iran, New Delhi is in a tricky position vis-à-vis Tehran. Here are the key issues India will face: Chabahar port development project: India has committed more than $500 million to develop the strategically located Iranian port of Chabahar, This project, which is already facing delays, could become a sticking point against India for the US, if New Delhi furthers investments in it. The port, located on the Gulf of Oman, only 85km from China's Gwadar port in Pakistan, is important for India as it will allow it to bypass Pakistan in accessing Afghanistan and Central Asia. The Chabahar port will cut transport costs/time for Indian goods by a third. The port is likely to ramp up trade among India, Afghanistan and Iran in the wake of Pakistan denying transit access to New Delhi for trade with the two countries. The first phase of the Chabahar port was inaugurated in December last year. In February, India and Iran signed a pact that gives New Delhi operational control of a part of port for 18 months. Price of oil: India is the world's third-largest oil consumer with Iran being its third-largest oil supplier after Iraq and Saudi Arabia. Fresh US sanctions on Iran could well lead to oil prices skyrocketing, which will hit India - which was already feeling the price pressure before the US scrapped the deal - badly. As it is, even before the US action, the World Bank had projected a 20% jump in global prices of energy commodities, that is crude oil, gas and coal, this year. All of this will in turn pressure the rupee, push inflation higher and send GDP lower.   Share This News with Your Friends on Social Network     Comment on this Story

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