From Rs 400 Crore to Zero: Iran Says 'Still Open' On Chabahar Port After India Slashes Allocation In Budget 2026

As India slashed the allocation for the Chabahar port in its Union Budget, Iran said that it remains open to working with New Delhi and expanding relations on the issue. While addressing a media briefing at the Iranian embassy ahead of the 47th anniversary of the Iranian Revolution on Friday, Iranian ambassador Mohammad Fathali stressed on the vital location of the port and called it a key part of Iran’s capacity for boosting regional connectivity. In 2024-25, the budget disbursed Rs 400 crore to the External Affairs Ministry for Chabahar Port, and the funds were transferred to Iran. New Delhi has made no comments on its future plans regarding the port following the US sanctions.“You know that the port of Chabahar is vital and it can play a good

role for accessing Afghanistan and Central Asia. We have good relations with some countries, particularly India, and believe that we should expand our relations on this issue,” Fathali said. “Up to now, we have no comment from the Indian side,” he added.Emphasising the strategic importance of the deep-water port’s location on the Gulf of Oman, he stated, “We believe that Chabahar is Chabahar, the location won’t change and some countries use this geographical location for access to Central Asia and Afghanistan." “We believe that in future, the Indian government wants to manage the situation,” he said, without giving details.Also Read: Why An ‘Unstable’ Iran Is a Geopolitical Test India Did Not Want

India skips Chabahar Port allocation in budget

India made no budgetary allocation for the Chabahar port project in the Union Budget for 2026–27, marking a departure from recent years. In previous budgets, India had earmarked about Rs 100 crore annually for the strategic connectivity project located in Iran’s Sistan-Balochistan province on the country’s southern coast. The decision followed sanctions imposed by the United States on Iran. In September last year, Washington announced stringent economic measures against Tehran but granted India a six-month exemption for the Chabahar port project. That waiver is set to expire on April 26.Officials familiar with the matter said India is in the process of transferring around USD 120 million, the amount it had committed to the project, to reduce its direct exposure to the port’s development. They added that New Delhi is also exploring the possibility of creating a new entity to carry forward the project. This arrangement would end the Indian government’s direct exposure while ensuring continued support for the port, the officials said, PTI reported.(With agency inputs)