India has suffered a major setback with the US Trump administration ending exemptions related to Iran’s Chabahar Port. Starting September 29, countries and companies operating at this strategic port will face sanctions.
India has been a key player in developing Chabahar, but this move not only jeopardizes billions of dollars in investment but also disrupts New Delhi’s strategic trade and connectivity goals.
🌍 What is Chabahar Port?
Located on Iran’s southeastern coast in the Gulf of Oman.
Part of a 7,200 km multi-modal connectivity project linking India with Iran, Russia, Central Asia, and Europe.
Just 885 km from Kandla and 1,265 km from Mumbai, making it India’s closest access to Iran.
Provides India a trade route to Afghanistan and Central Asia bypassing Pakistan.
🛠️ India’s Role in Developing Chabahar
The idea first gained momentum during Iranian President Mohammad Khatami’s visit in 2003.
In 2013, India announced a $100 million investment.
In 2015, an MoU was signed for development.
In 2016, PM Narendra Modi announced $500 million investment in Tehran.
Development slowed due to US sanctions over Iran’s nuclear program.
📌 In May 2024, India signed a 10-year lease to operate part of Chabahar, marking the first time India managed a foreign port. The Ministry of External Affairs allocated ₹1 billion for 2024-25.
💰 How Much Has India Invested?
From FY 2016–17 to FY 2023–24: ₹4 billion allocated.
So far, ₹201.51 billion spent on development.
🚨 Why Did the US Impose Sanctions Now?
The US withdrew from the Iran nuclear deal in 2018 and re-imposed sanctions.
India had received exemptions to work on Chabahar for Afghanistan’s development.
Now, the Trump administration revoked this exemption, effective September 29.
US State Department spokesperson Thomas Pigott said the exemptions under the Iran Freedom and Counter-Proliferation Act (IFCA) were being terminated.
⚖️ US Justification
Part of Trump’s maximum pressure policy to isolate Iran.
The US accused Iran of funding instability through illicit financial networks in Hong Kong and the UAE.
Revenues allegedly benefited Iran’s Islamic Revolutionary Guard Corps (IRGC-QF) and MODAFL.
With the Taliban’s takeover in Afghanistan, the original justification for Chabahar exemptions no longer fits US policy.
🇮🇳 How Will This Impact India?
Chabahar is India’s closest port to Iran and crucial for trade with Afghanistan and Central Asia.
The sanctions undermine India’s strategic alternative to Pakistan’s Gwadar Port, developed by China.
Could slow down India’s plans for regional connectivity and boost China’s influence in Iran.
Strategic affairs expert Brahma Chellaney wrote on X:
“The Trump administration has tightened the screws on India. After slapping 50% tariffs on Indian goods, it has now threatened Chabahar. Ironically, India once halted Iranian oil imports to comply with US sanctions. China benefited the most, becoming Iran’s largest crude buyer.”
✅ Conclusion
The US decision to end exemptions for Chabahar Port is a severe blow to India’s strategic and economic interests. Billions invested and years of planning are now at risk, while China stands to gain the most.
For India, this moment calls for urgent diplomatic negotiations to safeguard its position in Iran, Central Asia, and global trade corridors.
