US Revokes Sanctions Waiver On Iran's Chabahar Port. What Does It Mean For India?

Located in Iran’s Sistan-Balochistan province, the Chabahar port has long been seen as a vital trade and connectivity hub. It is a critical gateway to Afghanistan and Central Asia, bypassing Pakistan.

India will be impacted by this US decision, as it is involved in the development of a terminal at the Chabahar port.

Source : X@IndiaWarMonitor

The United States has announced that it will revoke the sanctions on Iran’s Chabahar port beginning September 29, a move that could significantly affect India’s strategic interests in the region. The decision ends a crucial 2018 waiver that had allowed New Delhi to pursue development activities at the port despite US restrictions on Tehran.

Located in Iran’s Sistan-Balochistan province along the Gulf of Oman, the Chabahar port has long been seen as a vital trade and connectivity hub. For India, it offers a critical gateway to Afghanistan and Central Asia, bypassing Pakistan.

Washington Pulls Back 2018 Waiver

The sanctions rollback is in line with former President Donald Trump’s “maximum pressure” policy aimed at isolating Iran. Announcing the decision, State Department principal deputy spokesperson Thomas Pigott said, “The Secretary of State has revoked the sanctions exception issued in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction assistance and economic development, effective September 29, 2025."

"Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions under IFCA,” the statement added.

US also highlighted broader measures to choke off Iran’s revenue streams, citing the targeting of illicit international financial networks accused of helping Tehran sell oil. They alleged that the proceeds supported Iran’s Islamic Revolutionary Guard Corps and its Ministry of Defence.

“As long as Iran devotes its illicit revenues to funding attacks on the United States and our allies, supporting terrorism around the world, and pursuing other destabilising actions, we will continue to use all the tools at our disposal to hold the regime accountable,” the US State Department said.

How Will The Decision Impact India?

According to a report by news agency PTI, India will feel the impact of this decision most directly, given its long-standing role in developing part of the port.

On May 13, 2024, New Delhi signed a landmark 10-year agreement granting it the operation of a terminal at Chabahar, marking the first time India would manage an overseas port. The pact was concluded between Indian Ports Global Limited (IPGL) and Iran’s Port & Maritime Organisation, replacing an earlier 2016 arrangement that had been renewed annually.

New Delhi has consistently viewed Chabahar as a strategic project central to the International North-South Transport Corridor (INSTC), a 7,200-km trade route linking India with Iran, Afghanistan, Russia, Central Asia, and Europe. Discussions on the project date back to 2003, when then-Iranian President Mohammad Khatami visited India.

Beyond geopolitics, Chabahar has served as a humanitarian lifeline. India used the port in 2023 to deliver 20,000 tonnes of wheat to Afghanistan and, in 2021, to ship environmentally friendly pesticides to Iran.

For the 2024–25 fiscal year, the Ministry of External Affairs earmarked Rs 100 crore for Chabahar operations, underscoring its role in New Delhi’s regional connectivity strategy.

The reinstatement of sanctions is expected to complicate India’s plans, especially since progress at Chabahar had already slowed in the past due to international sanctions over Iran’s nuclear program.