By Sumaila Zaman

Copyright india

The Chabahar Port in Iran seen as a strategic corridor of India’s ambitions for the last two decades has been hit hard by the United States. Washington has been very clear in its caution that after September 29 any activity associated with Chabahar Port could be subject to sanctions. This presents a big blow for India which has invested billions of rupees into the Chabahar development and considers it a centerpiece of its “connectivity diplomacy.”
What is the US sanctions waiver for Chabahar Port? Why was it important for India?
According to the news agency PTI report the Trump administration has said that individuals operating the Chabahar Port in Iran would invite sanctions beginning later this month. The move is consistent with President Donald Trumps maximum pressure policy to isolate the Iranian regime State Department principal deputy spokesperson Thomas Pigott said in a statement earlier this week.
Irans Chabahar Port is not only a trading port for India but also a strategic asset. Chabahar allows India to achieve a direct benchmark to both Afghanistan and Central Asia thereby decreasing its dependency on Pakistan. The Central Asian countries possess large reserves of energy and minerals that India needs in abundance. In 2023 India exported 20000 tons of wheat to Afghanistan through Chabahar. When COVID-19 had an impact globally in 2021 medicines and vaccines arrived in Afghanistan via this port as well. This project stands as part of the International North-South Transport Corridor (INSTC) and can connect India Iran and Russia in order to form a direct supply route to Europe. In other words Chabahar is not simply a port for India; its a strategic corridor.
India has been using the Shahid Beheshti terminal at Chabahar Port as the main gateway for its shipments to Afghanistan and Central Asian countries. This terminal allows India to bypass Pakistan facilitating trade humanitarian aid and strategic connectivity with landlocked regions in the region.
In 2018 the United States enacted strict sanctions on Iran although Chabahar Port was given an exception to provide assistance in Afghanistans reconstruction and to support its economy. Regardless times have changed. Beginning September 29 2025 this exception will come to an end and the Iran Freedom and Counter-Proliferation Act will take effect which could sanction any company or country for engaging in activities at Chabahar Port due to its connection to an activity with Iran. This will be of particular concern to India because the US will also impose sanctions for activities undertaken by its government and private Indian companies invested in the port.
The move to revoke the 2018 sanctions waiver is consistent with President Donald Trumps maximum pressure policy to isolate the Iranian regime State Department principal deputy spokesperson Thomas Pigott said in a statement earlier this week.
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 Pigott said reported news agency PTI.
How will Indian companies and investors be impacted by this decision?
India would be affected by this decision as it is involved in developing a terminal at the Chabahar port on the Gulf of Oman. On May 13 2024 India signed a 10-year contract to operate the port that will help it expand trade with Central Asia.
This was the first time India would take over the management of an overseas port. New Delhi had proposed to develop Chabahar port way back in 2003 to provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor (INSTC) bypassing Pakistan.
The INSTC is a 7200-km-long multi-mode transport project for moving freight among India Iran Afghanistan Armenia Azerbaijan Russia Central Asia and Europe. US sanctions on Iran over its nuclear programme had slowed the development of the port.
The long-term agreement was signed by Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran. It replaces an initial 2016 pact which covered Indias operations at Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.
Located in Sistan-Balochistan province on the energy-rich countrys southern coast Chabahar port is being developed by India and Iran to boost connectivity and trade ties.
Why did the US originally grant a waiver to Chabahar Port in 2018?
The US had exempted the Chabahar port project from sanctions in 2018 saying the secretary has provided for an exception from the imposition of certain sanctions under the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) with respect to the development of Chabahar Port and the construction of an associated railway and for the shipment of non-sanctionable goods through the port for Afghanistans use as well as Afghanistans continued imports of Iranian petroleum products.”
However with the new guideline these exemptions will be removed. The US-backed government in Afghanistan was ousted by the Taliban which seized power in 2021 following the withdrawal of American forces.