Washington/New Delhi, Sept 19: The United States has announced that it will revoke the sanctions waiver for India’s operations at Iran’s Chabahar Port, effective September 29, 2025, bringing uncertainty to one of New Delhi’s most strategically significant infrastructure projects. The move, part of Washington’s ongoing “maximum pressure” campaign against Tehran, has raised concerns over India’s future investments and its regional connectivity ambitions.
The waiver, first granted in 2018 during the Trump administration, had allowed India to continue its development of the Chabahar Port without fear of punitive action under the Iran Freedom and Counter-Proliferation Act (IFCA). The exception was carved out specifically to support Afghanistan’s reconstruction and economic development, as the port provided a vital trade link for the landlocked country by bypassing Pakistan.
However, the U.S. State Department on Tuesday announced that the exemption will now be revoked. “Consistent with President Trump’s maximum pressure policy to isolate the Iranian regime, the Secretary of State has revoked the sanctions exception issued in 2018 under 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,” the statement read.
India’s Stakes at Chabahar
India has invested heavily in the port as part of its broader strategy to secure trade routes to Afghanistan, Central Asia, and Europe while countering China’s influence through Pakistan’s Gwadar Port. In May 2024, India signed a 10-year contract with Iran to operate the Shahid Beheshti terminal at Chabahar. Under the agreement, Indian Ports Global Limited committed $120 million for infrastructure development and extended a $250 million credit line to Tehran.
External Affairs Minister S. Jaishankar had earlier expressed confidence that Washington understood Chabahar’s “larger relevance” and would not take a narrow view. In May 2024, responding to U.S. warnings about potential sanctions, he said: “It’s a question of communicating and convincing people that this is for everybody’s benefit. If you look at the U.S.’s past attitude, they have been appreciative of the fact that Chabahar serves a broader purpose.”
The revocation of the waiver now puts India in a delicate position—balancing its strategic commitments in Iran with its partnership with the United States.
Strategic Importance of Chabahar
Beyond its role as a trade route to Afghanistan, Chabahar is a key link in the International North-South Transport Corridor (INSTC), a 7,200 km-long multi-modal network designed to connect India with Iran, Russia, Central Asia, and Europe. It is also seen as India’s counterweight to China’s Belt and Road Initiative and the Gwadar Port in Pakistan’s Balochistan province.
Chabahar’s location provides India direct access to Central Asia without relying on Pakistan, making it a linchpin in New Delhi’s connectivity strategy. Any disruption of Indian operations due to U.S. sanctions could undermine years of planning and investment, while giving rivals like China greater room to expand their footprint in the region.
The Road Ahead
India has yet to issue an official response to the revocation, but observers suggest that New Delhi may seek diplomatic negotiations to prevent disruption of the project. Analysts point out that India’s continued engagement at Chabahar is not only an economic venture but a geopolitical necessity, given its role in regional trade, energy security, and strategic counter-balancing.
With the waiver ending on September 29, the spotlight now shifts to whether India can persuade Washington to reconsider or carve out a new arrangement, ensuring Chabahar remains insulated from the larger U.S.-Iran standoff.