US Ends Chabahar Sanctions Waiver Putting India’s Strategic Project at Risk
US ends Chabahar waiver, threatening India’s regional trade plans.
The United States, under the Donald Trump administration, has announced the revocation of a sanctions waiver for Iran’s Chabahar Port, effective September 29, 2025, according to the US Department of State. This decision, part of Washington’s “maximum pressure” campaign against Tehran over its suspected nuclear program, could significantly impact India’s strategic and economic interests in the region.
Strategic Importance of Chabahar Port
Located in Iran’s Sistan-Balochistan province near China-controlled Gwadar Port, Chabahar Port is a critical asset for India. Often dubbed the “Golden Gate,” it enables New Delhi to bypass Pakistan and establish alternative trade and transit routes to landlocked Afghanistan and Central Asia. The port, comprising Shahid Kalantari and Shahid Beheshti terminals with five berths each, offers substantial cargo-handling capabilities. Its proximity to India makes it an ideal hub for enhancing connectivity and trade ties with Iran, while also serving as a counterbalance to China’s regional influence in the Oman Sea and Gwadar Port.
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India’s interest in Chabahar dates back to the 1970s, with formal commitments solidified during Prime Minister Atal Bihari Vajpayee’s 2001 visit to Iran. Despite setbacks following the US designation of Iran as part of the “axis of evil” under President George W. Bush, India renewed its focus on the port in recent years. In May 2024, India and Iran signed a 10-year bilateral contract for the operation of the Shahid Beheshti terminal, with India’s Ministry of External Affairs allocating ₹100 crore for the port’s development in the 2024-25 budget.
India’s Investments and Achievements
Since India Ports Global Limited assumed operational control of the Shahid Beheshti terminal, Chabahar has seen a significant increase in cargo throughput, handling over 8 million tonnes of goods and tens of thousands of containers. The port has also been a vital conduit for delivering humanitarian aid to Afghanistan, particularly following the Taliban’s takeover. India’s investments, exceeding $120 million in infrastructure and credit lines, underscore its commitment to the project.
Implications of US Sanctions
The US Department of State has indicated that, post-revocation, entities operating Chabahar Port or engaging in activities covered by the Iran Freedom and Counter-Proliferation Act (IFCA) may face sanctions. This targets entities facilitating Iranian oil sales and financing Iran’s military and proxy groups, impacting Iran’s shadow banking infrastructure. For India, this poses a significant risk to its operations at Chabahar, potentially jeopardizing investments and disrupting trade routes to Afghanistan and Central Asia.
Diplomatic Challenges for India
The revocation creates a diplomatic dilemma for New Delhi, which must navigate its critical partnership with the United States while preserving strategic and economic ties with Iran. The sanctions threaten to complicate India’s ambitions for regional connectivity and countering Chinese influence, forcing policymakers to reassess their approach to this vital project.
As the September 29 deadline approaches, the future of Chabahar Port—and India’s broader geopolitical strategy—hangs in the balance.
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