US decision to revoke sanctions waiver for Chabahar port will have implications for India

The decision of the US government to revoke the 2018 sanctions waiver with regard to the strategic Iranian port of Chabahar will have implications for India, which is engaged in the development of a terminal at the port.

The US Department of State, in a statement, said that in line with President Trump’s maximum pressure policy to isolate the Iranian regime, it 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,” the statement said.

India will be impacted by this decision, as it is involved in the development of 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, bypassing Pakistan.

US sanctions on Iran over its suspected 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 India’s operations at Shahid Beheshti terminal in Chabahar port and had been renewed on an annual basis.

In 2023, Chabahar port was used by India to send 20,000 tonnes of wheat aid to Afghanistan. In 2021, the same was used to supply environmentally friendly pesticides to Iran.

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