Why India cannot afford to walk away from Chabahar despite the threat of US sanctions, and what the strategic port means for New Delhi. Read to understand what is at stake.
India is looking for a “sustainable way forward” to remain involved in Iran’s Chabahar port, Foreign Secretary Vikram Misri has said, as US sanctions and the continuing conflict in West Asia complicate New Delhi’s role in the strategic project.
Misri made the remarks in Bishkek, where Kyrgyzstan is hosting the Shanghai Cooperation Organisation summit.
“We have been associated with this project over a long period of time,” Misri said. He added that the conflict in West Asia had affected regional cooperation and altered the “regime” under which activities at Chabahar could be carried out.
“We remain in discussion and in touch with various stakeholders in order to find a sustainable way forward to continue this element of cooperation,” he said.
The immediate concern is the expiry of a conditional US sanctions waiver on April 26, 2026. The waiver had shielded India’s work at Chabahar from Washington’s wider sanctions against Iran.
Its expiry has raised the risk of Indian entities involved in the port facing US penalties. The Iran conflict and Washington’s renewed pressure on Tehran have added to the uncertainty, making it harder for India to continue under the existing arrangement.
New Delhi, however, does not want to leave Chabahar.
India is holding separate discussions with the US and Iran over its $120 million investment in the port, Bloomberg reported. One option under consideration is the temporary transfer of India’s stake to an Iranian entity while sanctions remain in force.
Such an arrangement would allow India to reduce its direct exposure to US sanctions without permanently abandoning the project. New Delhi could return to its operational role if restrictions are eased.
Misri’s emphasis on continuing cooperation reflects this effort to find a middle path: protecting India from sanctions while preserving its long-term rights and investments at Chabahar.
The port is important because it gives India access to Afghanistan and Central Asia without passing through Pakistan, which denies it overland transit. Located in southeastern Iran on the Gulf of Oman, it provides India with a direct maritime gateway to the region.
Chabahar is also connected to the International North-South Transport Corridor, a multimodal trade route linking India with Iran, Central Asia, Russia and Europe.
Its location adds to its strategic value. Chabahar lies around 170 km from Pakistan’s Gwadar port, which has been developed with Chinese support and is a major component of the China-Pakistan Economic Corridor.
India began discussions with Iran on developing Chabahar in 2003. During Prime Minister Narendra Modi’s visit to Iran in 2016, New Delhi committed investment to the project.
In 2024, India Ports Global Limited signed a 10-year agreement to operate the Shahid Beheshti terminal. Cargo handled at the port rose from 12.24 lakh tonnes in 2020-21 to 22.32 lakh tonnes in 2024-25, an increase of more than 82 per cent, according to government figures.