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

New Delhi: India’s access to Afghanistan and Central Asia through Iran’s Chabahar Port faces a serious challenge as the United States revoked sanctions exemptions previously granted under the Iran Freedom and Counter-Proliferation Act (IFCA), effective September 29.

The US Department of State in a statement released said, “consistent with President Trump’s maximum pressure policy to isolate the Iranian regime, the Secretary of State 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 development is part of Washington’s broader effort to curb networks linked to Iran’s Islamic Revolutionary Guard Corps (IRGC) and prevent financing of Tehran’s military and regional proxy operations.

The move could expose Indian operators at the port to US penalties and complicate one of New Delhi’s key regional connectivity projects.

The Chabahar Port, specifically the Shahid Beheshti terminal, has been under India’s operational control since 2018 through India Ports Global Limited.

The port allows India to bypass Pakistan to reach Afghanistan and Central Asia, facilitating both trade and the delivery of humanitarian aid.

New Delhi has invested over $120 million in port infrastructure and related development credit lines.

By ending the Chabahar sanctions exemption, Washington has tightened the regulatory environment for international actors engaging with Iranian infrastructure projects.

Diplomatic and economic implications for India

For India, the revocation introduces both economic and diplomatic challenges.

Indian companies operating at Chabahar now face potential exposure to US penalties, which could affect cargo operations, investment plans, and future expansion.

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The development also tests India’s ability to balance its growing strategic partnership with the United States against longstanding trade and strategic ties with Iran.

Strategically, Chabahar remains a key node in India’s regional infrastructure.

The port also provides a counterweight to China-backed Gwadar Port in Pakistan, strengthening India’s position in regional trade and maritime strategy.