US Revokes Sanctions Waiver On Iran’s Chabahar Port, Jeopardising India’s Strategic Connectivity Plans
India’s ambitious Chabahar plans, from port expansion to the Zahedan railway, face new uncertainty as the US sanctions move on Iran threatens its 10-year deal and strategic connectivity goals in Central Asia. Image courtesy; RNA
The United States has revoked the sanctions waiver for Iran’s Chabahar Port, a move that threatens to derail India’s long-term regional trade and connectivity projects. The waiver, first issued in 2018, had shielded India’s operations at the port from punitive measures under the Iran Freedom and Counter-Proliferation Act (IFCA).
The US Department of State announced that the revocation will take effect on September 29, 2025, cautioning that individuals and companies involved in Chabahar’s operations could now face sanctions.
Washington said the decision was consistent with its “maximum pressure policy” against Tehran. “Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions,” the State Department’s statement read.
How does this impact India’s position on Chabahar?
India, which has positioned Chabahar as a linchpin of its regional strategy, stands to be directly impacted. In May 2025, New Delhi signed a 10-year agreement with Iran to expand the port’s capacity and connectivity.
As part of this deal, India committed a $250 million credit line to develop infrastructure, including raising the port’s container handling capacity to 500,000 TEUs and constructing 700 km of railway tracks linking Chabahar to Zahedan, with completion targeted by mid-2026.
Located on the Gulf of Oman, Chabahar has been vital for India’s outreach to Afghanistan and Central Asia, offering a direct alternative route that bypasses Pakistan. It has also played a humanitarian role: in 2023, India shipped 20,000 tonnes of wheat aid to Afghanistan via Chabahar, while earlier consignments included pesticides and relief materials for Iran.
Could this US decision undermine India’s position?
Analysts say the US decision could undermine India’s efforts to counter China’s expanding influence in the region through its Belt and Road Initiative (BRI) and the nearby Gwadar Port in Pakistan, developed with Chinese support. For India, Chabahar was not just an economic project but also a strategic counterweight.
The revocation is therefore seen as a significant setback for New Delhi. While India may seek diplomatic negotiations to retain operational flexibility, its ambitious connectivity plans in the Gulf and Central Asia could now face serious delays and financial risks.
