At a time when India and the US are looking to seal a trade deal, the Donald Trump administration has dealt a fresh blow to India’s trade and strategic ambitions by removing sanctions waivers from Chabahar port. Since 2018, India has been operating the Shahid Beheshti terminal at Chabahar, enabling New Delhi to establish trade routes and deliver humanitarian aid to Afghanistan and Central Asian nations while circumventing Pakistan.
Chabahar port sanctions: What is the latest move from US?
The withdrawal of exemptions was anticipated for months following Trump’s executive order in January. The State Department and Treasury Department officially announced the decision earlier this week, citing their strategy of “maximum pressure on Iran” due to its alleged “support to regional terrorist proxies and advance weapons systems that pose a direct threat to US forces and our allies.”The Secretary of State has withdrawn the sanctions exemption granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan’s reconstruction and economic development, aligning with President Trump’s stringent policy to isolate Iran. This revocation takes effect from September 29, 2025. The State Department announced that following this revocation, individuals operating the Chabahar Port or participating in IFCA-related activities could face sanctions.
What do sanctions on Chabahar port mean for India?
This decision directly impacts India’s state-operated India Ports Global Limited (IPGL), which has managed the Shahid Beheshti terminal at the port since 2018. The initial waiver was provided by the Trump administration under IFCA, recognising the port’s significance for Afghanistan’s reconstruction and economic growth.The removal of the waiver represents an unexpected setback from the United States for India, as Chabahar functioned as a strategic counter to Chinese regional dominance, particularly in relation to the China-supported Gwadar Port in Pakistan. These ports are positioned merely 170 kms apart.Chabahar was essential not only for delivering humanitarian aid to Afghanistan, which Pakistan had obstructed, but also functioned as a crucial centre for the International North-South Transport Corridor (INSTC). This multi-modal transport initiative aimed to establish connections between India, Iran, Russia, and Central Asia.In ancient times, before Pakistan’s establishment as a nation-state, the renowned historian Al-Biruni documented in the Tarikh Al-Hind that India’s coastal boundary began at Tiz, which is now known as Chabahar. The name Chabahar translates to “four springs,” referring to the area’s favourable weather conditions.
Why is Chabahar port important for India?
In 2024, India signed a 10-year pact to operate the strategically vital Chabahar port in Iran, aiming to boost trade with Central Asia. Positioned on the Gulf of Oman and initially conceived by New Delhi in 2003, the port functions as an important transit point for Indian products seeking entry into Afghanistan and Central Asia. This connection will utilize the International North-South Transport Corridor’s road and rail links, allowing India to circumvent Pakistan. India’s role in developing Chabahar is frequently viewed as a strategic response to Pakistan’s operations at Gwadar port and China’s Belt and Road Initiative.On May 13, 2024, Indian Ports Global Limited (IPGL) signed a long-term contract with Iran’s Port & Maritime Organization. IPGL plans to contribute about $120 million, complemented by an additional $250 million obtained through debt funding. This agreement, set for a period of 10 years and featuring automatic renewal clauses, replaces the earlier contract.India’s contributions feature infrastructure investments—such as expanding road and rail systems—and the possibility for India to become a key destination for Iranian exportsUnder the arrangement, India gains operational authority over the Chabahar port as a result of its financial commitment to port development. This marks the first time India will manage a foreign port. Adjacent to both the Strait of Hormuz and the Indian Ocean, Chabahar offers important strategic advantages.The Kandla port in Gujarat is the closest Indian port to Chabahar, situated 550 nautical miles away, whereas the distance between Chabahar and Mumbai measures 786 nautical miles.Several Central Asian nations, including resource-rich but landlocked countries such as Kazakhstan and Uzbekistan, have shown strong interest in using Chabahar to secure access to the Indian Ocean Region and the Indian market.
