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Context:

The US sanctioned four Indian companies as part of its campaign to cripple Iran’s oil revenue.

What Are Sanctions?

Sanctions are economic, diplomatic, or military penalties imposed by one country or a group of countries (e.g., the UN, EU) to pressure or punish a target nation, entity, or individual. They restrict economic interactions, such as:

• Import/Export Bans: Prohibiting trade of specific goods (e.g., oil) or all goods.
• Asset Freezing: Blocking access to financial assets in the sanctioning country’s jurisdiction.
• Financial Restrictions: Banning use of banking systems or currencies (e.g., USD).
• Targeted v/s Comprehensive Sanctions: Targeted sanctions focus on specific individuals/businesses (e.g., Iranian oil brokers), while comprehensive sanctions affect an entire country’s economy (e.g., Cuba’s US embargo).

Why Did the US Impose Fresh Sanctions on Iran?

The US has a decades-long history of sanctioning Iran over concerns about its nuclear program, support for proxy militias (e.g., Hezbollah), and human rights abuses. The latest sanctions, announced on February 24, 2025, are part of President Donald Trump’s renewed “maximum pressure” campaign to:

• Cut Iran’s Oil Revenue: Oil sales fund Iran’s military and proxy groups, which the US claims destabilize the Middle East.
• Disrupt “Shadow Networks”: Iran allegedly uses a clandestine fleet of ships, brokers, and managers to evade sanctions and sell oil. The US Treasury accused Iran of relying on “ship-to-ship transfers” in international waters to hide oil origins .

Which Indian Companies Were Sanctioned, and Why?

Four India-based firms were sanctioned for their alleged roles in transporting Iranian oil:

• Flux Maritime LLP (Navi Mumbai)
• BSM Marine LLP (National Capital Region)
• Austinship Management Pvt Ltd (NCR)
• Cosmos Lines Inc (Thanjavur)

Flux Maritime, BSM Marine, and Austinship are accused of acting as commercial/technical managers for vessels involved in Iranian oil shipments. Cosmos Lines is directly accused of transporting Iranian petroleum .

US Allegations: These companies helped Iran bypass sanctions by managing ships in the “shadow fleet,” enabling oil sales to Asia.  

Effectiveness and Criticisms of Sanctions

Arguments for Sanctions:

• Economic Pressure: Force Iran to abandon nuclear ambitions or reduce proxy support.
• Global Norms: Deter from engaging in illicit trade.

Criticisms:

• Circumvention: Iran uses front companies, false flags, and ship-to-ship transfers to evade sanctions .
• Backlash on Sanctioning Countries: India and China continue trading with Russia despite Western sanctions, undermining effectiveness .
• Humanitarian Impact: Comprehensive sanctions (e.g., on food/medicine) harm civilians.
• Limited Enforcement: UN/EU sanctions rely on member states, leading to inconsistent implementation .

Implications for India

Sanctioned Indian firms face asset freezes and bans on US-dollar transactions.

The move complicates India’s balancing act between strategic ties with the US and energy dependence on Iran.

India stopped importing Iranian oil in 2019 but may face pressure to further isolate Iran.

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Source: 

INDIAN EXPRESS