US Reimposes Sanctions On India For Chabahar Port Development; Connectivity Plans Disrupted

Washington: After the imposition of exorbitant tariffs on Indian goods, Washington has now revoked the 2018 sanctions waiver granted for the development of Iran’s Chabahar Port. This is a move that could significantly impact India’s regional connectivity ambitions, the United States under President Donald Trump has

The waiver, which had allowed India to operate and invest in the strategically located port without facing penalties under the Iran Freedom and Counter-Proliferation Act (IFCA), will officially expire on September 29.

The Chabahar Port, in Iran’s Sistan-Baluchistan province, has been central to India’s efforts to bypass Pakistan and establish direct trade routes to Afghanistan and Central Asia. India has been developing the Shahid Beheshti terminal at Chabahar through its state-run entity, India Ports Global Limited (IPGL), which took operational control in December 2018. Since then, the port has handled over 90,000 TEUs of container traffic and 8.4 million metric tonnes of bulk and general cargo.

The US State Department’s Principal Deputy Spokesperson, Thomas Pigott, stated that the revocation aligns with President Trump’s “maximum pressure” policy aimed at isolating the Iranian regime. “Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions,” Pigott said.

The waiver had originally been granted to support Afghanistan’s reconstruction and economic development, allowing the shipment of non-sanctionable goods and petroleum products through Chabahar. However, the new directive removes these exemptions, placing Indian operations at risk of financial and legal penalties.

India’s involvement in Chabahar has not only been strategic but also humanitarian. During the COVID-19 pandemic, the port facilitated the supply of essential aid, including 2.5 million tonnes of wheat and 2,000 tonnes of pulses to Afghanistan. In 2021, India also used the port to deliver 40,000 litres of eco-friendly pesticide to Iran to combat a locust outbreak.

Given Chabahar’s proximity to Pakistan’s China-backed Gwadar Port, the decision is considered a major diplomatic and logistical setback for New Delhi. The Chabahar Agreement, signed in May 2016 by India, Iran, and Afghanistan, was envisioned as a cornerstone of the International Transport and Transit Corridor, enhancing regional trade and connectivity.

With the waiver’s revocation, India’s long-term plans for Chabahar — including a 10-year operating contract signed in 2024 — now face uncertainty. The move may also strain Indo-US relations, which are already navigating complex trade and geopolitical dynamics.