US revokes India’s sanctions waiver for Iran’s Chabahar Port

The United States has revoked a sanctions waiver granted to India in 2018 for its operations at Iran’s Chabahar Port, a move that could affect New Delhi’s strategic role in the region.

The decision, announced by the State Department on September 16, will take effect on September 29, 2025. Officials said the step is part of Washington’s “maximum pressure” campaign against Tehran.

The waiver, issued under the Iran Freedom and Counter-Proliferation Act (IFCA), had allowed India and other countries to continue development work at the port without risking U.S. penalties.

Why Chabahar is important for India?

Chabahar is vital for India as it provides a trade route to Afghanistan and Central Asia, bypassing Pakistan. The port also links to the International North-South Transport Corridor, which connects India with Russia and Europe.

In its statement, the State Department said the decision was “consistent with President Trump’s maximum pressure policy to isolate the Iranian regime.”

It added that “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 department further noted the move was part of Washington’s broader efforts to disrupt “illicit financial networks that sustain the Iranian regime and its military activities.”

The revocation puts India in a difficult position. On May 13, 2024, New Delhi signed its first long-term overseas port agreement — a 10-year deal to operate Chabahar in partnership with Iran’s Port and Maritime Organization.

Under the contract, Indian Ports Global Limited (IPGL) pledged about $120 million and planned to raise another $250 million in credit for infrastructure projects around the terminal.

India has long viewed Chabahar as more than a trade hub. The idea to develop the port dates back to 2003, to secure a route to Afghanistan and Central Asia without depending on Pakistan.

The port has already been used by New Delhi to send wheat aid and other essential supplies to Afghanistan. Strategically, it also allows India to counter China’s growing influence in the Arabian Sea, as Chabahar is only 140 kilometers from Pakistan’s Gwadar Port.

India had previously managed to shield the project from sanctions. In 2018, when President Trump reimposed restrictions on Iran, the State Department exempted certain activities at Chabahar and its railway links, citing the port’s importance to Afghanistan.

Further pressure on New Delhi

Now, with the waiver revoked, India faces the challenge of safeguarding its investments and companies tied to the project.

The timing of Washington’s decision adds to the pressure on New Delhi as it balances its relations with the U.S. and Iran, while also maintaining close ties with Israel and Gulf partners.

Losing room to operate at Chabahar could impact India’s ability to compete with China in regional connectivity and trade.