- India faces expiry of US sanctions waiver on Chabahar Port operations soon
- No budget allocation was made for Chabahar Port in the Union Budget 2026
- India considers Chabahar a critical strategic and connectivity asset
Union Finance Minister Nirmala Sitharaman has offered a peek into India's thinking on the matter of Iran's Chabahar Port, where India has been investing heavily in recent years, to reap the benefits of the strategic location.
Two big developments on Chabahar Port have led to headlines.
First, the US sanctions waiver on India's operations in the Iranian port will expire soon, though New Delhi is engaged in quiet but intensive negotiations with Washington to protect what it sees as a critical strategic and connectivity asset.
And second, India has made no allocation for the Chabahar port project in the 2026 Union Budget, a decision that comes amid escalating tensions between Washington and Tehran and uncertainty over US sanctions on Iran.
At NDTV Profit Conclave 2026, Sitharman was asked about the fate of this huge project.
There has not been any allocation," she said. "I understand the importance of Chabaha. The north-south route was also linked to that. At the moment this is all I can say."
"You will understand if I can't say anything beyond this," she added, alluding to an extremely sensitive matter with serious geopolitical consequences.
Chabahar Port So Far
For several years, India had earmarked an annual outlay of Rs 100 crore for the development of Chabahar, a flagship connectivity project located in Iran's Sistan-Balochistan province along its southern coast. India is a major partner in the development of the port, which has long been seen as a key part of its regional trade and strategic outreach to Afghanistan, Central Asia and beyond.
Chabahar sits at the mouth of the Gulf of Oman and is Iran's first deepwater port, giving the country direct access to global maritime trade routes.
The port lies to the west of Iran's border with Pakistan, roughly mirroring the position of Gwadar port to the east of the border in Pakistan. Gwadar has been developed by China as part of the Belt and Road Initiative (BRI), making Chabahar not only an economic project but also India's counterweight in the region.
For Iran, Chabahar has been projected as a means to mitigate the impact of Western sanctions by opening alternative trade routes.
For India, the port offers a crucial route that bypasses Pakistan, which has consistently denied India overland access for trade with Afghanistan and Central Asia.
