Chabahar Port Waiver Revoked by Trump Administration: What’s at stake for India?

The United States has revoked the special sanctions waiver for Iran’s Chabahar Port, raising new challenges for India’s flagship connectivity project in the region. From September 29, 2025, anyone involved in operating, financing or servicing the port will face the same Treasury restrictions as other Iranian entities, according to the US State Department.

Announcing the decision, Washington said the move aligns with President Donald Trump’s policy of “maximum pressure” on Tehran. “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 statement read.

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Why waiver matters for India?

The waiver, first issued in 2018, had allowed India to continue working on Chabahar without the fear of US sanctions. It was justified on the grounds of facilitating Afghanistan’s reconstruction and ensuring an alternative route for humanitarian supplies.

With its revocation, Indian entities operating at Chabahar Port, particularly India Ports Global Limited (IPGL) and its subsidiary in Iran, are exposed to financial penalties and legal complications. This places one of New Delhi’s most strategically important infrastructure projects under unprecedented strain.

Chabahar as India’s gateway to Central Asia

Chabahar Port, located in Iran’s Sistan-Balochistan province, is the closest Iranian port to India. Its deep-water access and position on the Gulf of Oman make it a natural gateway to Afghanistan and Central Asia, bypassing Pakistan.

The port is also a key hub of the International North-South Transport Corridor (INSTC), a 7,200-km-long multimodal trade route linking India with Iran, Afghanistan, Russia, Central Asia and eventually Europe. For India, Chabahar has been a long-term bet on connectivity and trade diversification.

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India’s investments and progress so far

New Delhi’s commitment to Chabahar dates back to 2003, when talks on its development began. India pledged $100 million in 2013 and, in 2016, signed a trilateral agreement with Iran and Afghanistan to establish an international transit corridor through the port.

Since taking over operations in December 2018, India has supplied six mobile harbour cranes worth $25 million, handled more than 90,000 TEUs of container traffic and 8.4 million metric tonnes of cargo. The port has been central to India’s humanitarian outreach, facilitating shipments of wheat, pulses and even pesticides during crises in Afghanistan and Iran.

Strategic uncertainty ahead

For India, the waiver’s end raises tough questions about its ability to pursue strategic projects in Iran without running afoul of US sanctions. While New Delhi has repeatedly reaffirmed Chabahar’s importance, it now faces the task of balancing its strategic connectivity goals with the risk of secondary sanctions from Washington.

The big question is whether India will seek fresh diplomatic negotiations for a carve-out or recalibrate its approach to one of its most ambitious regional projects.