New Delhi: With an allocation of Rs 100 crore in the 2020-21 for the development of Chabahar port in Iran, India has clearly signalled its interest in developing what it considers to be a port of strategic importance as is seen as the route to access landlocked Afghanistan and Central Asia bypassing Pakistan.

Finance Minister Nirmala Sitharaman earmarked Rs 17,372.27 crore for the external affairs ministry, marginally higher than what was allocated in the 2019-20 budget in which the ministry was allocated Rs 17,346.71 crore. The reduction in budget outlay was most significant for Nepal, where it has been Rs 400 crore from Rs 1,200 crore in the 2019-20 budget to Rs 800 crore in the 2020-21 budget.

In the case of Chabahar, the allocation has gone up by Rs 55 crore from Rs 45 crore in the 2019-20 budget. This comes more than two months after the US gave India a written assurance that it would help facilitate global banks to fund the purchase of equipment at Chabahar port — during the Indo-US “2+2″ meeting of foreign and defence ministers in Washington in December. The US had then included a confirmation of the special exemption to the development of the Chabahar port and a rail link from America’s Iran sanctions, provided there was no involvement of Iran’s Islamic Revolutionary Guard Corps.

Getting Indian companies to undertake any activity at Chabahar has been a non-starter given that Indian firms have been nervous of US sanctions despite assurances that India had won a carve-out from the US on developing the Iranian port.

Besides Chabahar, the government has also increased allocation for the port project in Iran and Rs 140 crore to Seychelles where it has been keen to develop a coast guard facility. An agreement to this effect was signed in 2015 during Prime Minister Narendra Modi’s visit to the archipelago nation but internal political differences in the Seychelles have resulted in the project slowing down.

The 2015 pact was seen as important in the context of India underlining its presence in the Indian Ocean Region against the backdrop of China increasing its profile in the region considered India’s backyard.

The 2020-21 budget also allocates Rs 100 crore for organising the G-20 Summit in New Delhi in 2022.

In his remarks, India’s newly appointed Chief of Defence Staff Bipin Rawat said that the armed forces will be “prioritising our requirements for acquisitions and other requirements. After that, if we feel the need for more funds, we will take the requirements to the government. There is no cause of concern.”