The United States has been building closer relations with New Delhi since the late 1990s and also temporarily exempted India from sanctions on Iran's oil sector which took effect on November 5.
India was among the eight countries that were granted temporary waiver for purchase of Iranian oil.
A dozen Iranian tankers have turned off their transponders as a tactic to evade sanctions, US Special Representative for Iran Brian Hook said in a press briefing. "We continue negotiations to get all of the nations to zero", said the Secretary of State.
Afghanistan's imports of Iranian petroleum products were also being exempted from sanctions, the spokesperson added.
The move by the Donald Trump administration is considered as an endorsement by Washington of India's major role in the development of the port on the Gulf of Oman, which is of vast strategic importance for the reconstruction of war-torn Afghanistan.
The US government re-imposed the sanctions after withdrawing in May from the 2015 Iran nuclear agreement, which is more formally known as the Joint Comprehensive Plan of Action (JCPOA).
The spokesperson cited the strategy to say it "underscores our ongoing support of Afghanistan's economic growth and development as well as our close partnership with India". "These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief", said the US State Department Spokesperson.
"We are making it abundantly clear to the Iranian regime that they will face mounting financial isolation until they fundamentally change their destabilizing behavior".
Activities related to the development of the Chabahar port in Iran will be exempt from U.S sanctions that kicked in on Monday, following the 180 day cool-off period after the USA withdrew from the Joint Comprehensive Plan of Action (JCPOA or "Iran Deal") in May this year.
Meanwhile, US ambassador to Afghanistan John Bass said the US has, after extensive consideration, provided an exception under the Iran Freedom and Counter-Proliferation Act.
In May 2016, India, Iran and Afghanistan inked a pact which entailed establishment of Transit and Transport Corridor among the three countries using Chabahar Port as one of the regional hubs for sea transportation in Iran, besides multi-modal transport of goods and passengers across the three nations.
Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to cool prices and make up for losses from Iran.