The United States has exempted India from specific sanctions related to the development of the Chabahar port in Iran and the construction of a railway line linking it with Afghanistan, PTI reported.

India has invested $500 million (approximately Rs 3,600 crore at current exchange rate) in the Chabahar project, which will connect the country with Afghanistan and Central Asia, bypassing Pakistan. The first phase of the strategically-located project was inaugurated in December last year.

Sanctions targeting Iran’s oil, banking and transport sectors came into effect on Monday. The US has allowed eight countries, including India, to buy Iran’s oil for now despite the sanctions.

“After extensive consideration, the Secretary [of State] has provided for an exception from imposition of certain sanctions under the Iran Freedom and Counter-Proliferation Act of 2012, with respect to the development of Chabahar port, construction of an associated railway and for shipment of non-sanctionable goods through the port for Afghanistan’s use, as well as the country’s continued imports of Iranian petroleum products,” an unidentified State Department spokesperson told PTI.

“The president’s [Donald Trump’s] South Asia strategy underscores our ongoing support of Afghanistan’s economic growth and development as well as our close partnership with India,” said the official. “We seek to build on our close relationships with both the countries as we execute a policy of maximum pressure to change the Iranian regime’s destabilising policies in the region and beyond.”

The US had earlier said that it expects all countries, including India, to reduce their Iranian oil imports to zero by November 5. However, after the sanctions came into force, President Donald Trump said the sanctions on Iranian oil would be imposed gradually to avoid causing a “shock to the market”.

The reimposed sanctions are aimed at “fundamentally altering the behaviour of the Islamic Republic of Iran”, Pompeo had said last week. The US has placed 12 demands that Tehran must meet to get the sanctions lifted, including ending support for terrorism and ending military engagement in Syria.