The US has warned of potential sanctions for any country considering business deals with Iran, hours after India signed a 10-year contract to operate a port with Tehran.
India had entered an agreement to develop the strategically important Chabahar port, close to Iran's border with Pakistan, in 2016.
On Monday, it signed a long-term deal with Iran to develop it further.
India's shipping minister called it a "historic moment in India-Iran ties".
But the move may not go down well with the US, which has imposed more than 600 sanctions on Iranian-related entities over the past three years.
In a press briefing on Tuesday, the country's State Department Deputy Spokesperson Vedant Patel said, when asked about the deal, that the US sanctions on Iran are still in place and that Washington would continue to enforce them.
"Any entity, anyone considering business deals with Iran - they need to be aware of the potential risks that they are opening themselves up to and the potential risk of sanctions," he said.
India has not responded to the statement yet.
India took over operations of the port at the end of 2018. The port opened a transit route for Indian goods and products to Afghanistan and Central Asia, avoiding the land route through Pakistan - neighbours India and Pakistan share a tense relationship.
So far, 2.5m tonnes of wheat and 2,000 tonnes of pulses have been shipped from India to Afghanistan through Chabahar port, officials say.
On Monday, India's shipping ministry said that the Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran signed a long-term deal for the development of the port.
Under the agreement, IPGL will invest about $120 million with an additional $250 million in financing, bringing the contract's value to $370 million, said Iran's Minister of Roads and Urban Development Mehrdad Bazrpash.
India's Foreign Minister S Jaishankar said the deal "will clear the pathway for bigger investments to be made in the port".
