US To Revoke Sanctions Waiver For Iran's Chabahar Port. Will It Affect India?

In yet another tough move against India, the Donald Trump administration in the United States has announced the revocation of its waiver of sanctions over the strategic Iranian port of Chabahar, granted in 2018. The move, which threatens India's key strategic connectivity project to Afghanistan and Central Asia, is set to be implemented from September 29, according to the US Department of State.

Team Trump has claimed that the move is part of Washington's "maximum pressure" campaign against Tehran over its suspected nuclear programme. 

"Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA (Iran Freedom and Counter-Proliferation Act ) may expose themselves to sanctions under IFCA," the statement said.

Why Chabahar Port Is Important For India

Chabahar Port, located in energy-rich Sistan-Balochistan province of southeastern Iran near the China-controlled Gwadar Port, stands out due to its strategic and logistical advantages. It includes two main terminals, Shahid Kalantari and Shahid Beheshti, each equipped with five berths, facilitating significant cargo handling capabilities.

Often called the Golden Gate, the port let India bypass Pakistan and establish alternative trade and transit routes to landlocked Afghanistan and Central Asia. It is also the closest Iranian port to India, and is being developed by New Delhi and Tehran to boost connectivity and trade ties. 

The post came into being in the 1970s, and India has long shown interest in its development. Experts believe that a fully developed Chabahar port could also be used to counter Chinese presence in the Oman Sea and Gwadar Port.

In 2001, when Prime Minister Atal Bihari Vajpayee visited Iran, New Delhi signed an agreement with Tehran over the development of Chabahar port. But the project was affected after the United States, under President George W Bush, declared Iran as one of the "axis of evil", forcing New Delhi to abandon its strategic relationship with Tehran.

Over the subsequent years, India again looked to the Iranian port, seeking to deepen its commitment to Chabahar. In May 2024, India and Iran signed a long-term bilateral contract on port operation, enabling the operation of Shahid-Beheshti in the Chabahar Port Development Project for a period of 10 years.

The Ministry of External Affairs (MEA) also allocated Rs 100 crore for Chabahar Port for 2024-25, underlining India's focus on connectivity projects with Iran. 

How Will Sanctions Affect India 

Since India took operational control of its Shahid Beheshti terminal through India Ports Global Limited, the port witnessed a sharp rise in cargo throughput, with over 8 million tonnes of goods handled and tens of thousands of containers processed. It has also served as a lifeline for delivering humanitarian aid to Afghanistan, especially after the Taliban takeover during critical times. 

The US said its sanctions will target entities that facilitate Iranian oil sales, financing Iran's military and proxy groups in the region, directly impacting Iran's shadow banking infrastructure.

With the revocation of waivers, Indian operations at the port could now come under the risk of US sanctions, complicating India's ambitions and threatening the significant investments New Delhi has already made, amounting to over $120 million in infrastructure and credit lines for development.

This creates a diplomatic conundrum for India as it tries to balance its critical partnership with the United States against its strategic and economic ties with Iran.