Fresh threat of 25% by US president Donald Trump on any country doing business with Iran has put in doubt the future engagement of India in developing and operating Chabahar port terminals where it has already committed substantial resources and time.
Currently India is working to develop the port and run it under the six month waiver from the US that expires on April 26 this year. “Till that time trade can pass through the port. After that all would depend on how Iran and the US manage their relations,” former ambassador to Jordan and Libya among other countries Anil Trigunayat said.
The port was outside sanctions before the US revoked them in September as part of its “maximum pressure” policy on Iran, but reinstated this exemption after India’s diplomatic engagement.
Why is the port being developed
The port is being developed as a vital node of the International North-South Transport Corridor (INSTC), a multimodal route designed to connect India to Russia and Europe via Iran, significantly reducing transit time compared to the Suez Canal. “The first cargo from Russia through Chabahar is expected to land in India in February,” Trigunayat said.
The corridor becomes all the more important because of delays in the take-off of India Middle East Europe Economic corridor (IMEC), he said, adding that even Afghanistan is keen to use it to access humanitarian assistance from India and for trade.
Former ambassador on channels of communications
The former ambassador, however, expressed hope that with the protests in Iran easing and channels of communications opened between Iran and US through the White House envoy Steve Witkoff the tensions between the two may cool off. In case the port becomes off bounds then exporters and investors in the infrastructure will have to re-calibrate their strategies.
Located in the Sistan-Baluchestan province on Iran’s energy-rich southern coast, Chabahar serves as a strategic gateway for India to access Afghanistan and Central Asia, effectively bypassing Pakistan.
The total cargo handled at the Shahid Beheshti terminal of Chabahar Port during the 2024-25 was approximately 2.23 million tonnes. The cargo handling volume has seen an upward trend, growing by over 82% in the five years leading up to the end of FY 2024-25.
The current operational capacity of the port is around 8 million tonnes per year, with plans to expand it to 18 million tonnes in a future phase
It was back in 2003 that India and Iran formally agreed to develop the Shahid Beheshti terminal at Chabahar. Between 2003–2014 the progress remained minimal due to intense international pressure and Western sanctions on Iran’s nuclear program. However, India completed the Zaranj-Delaram highway in Afghanistan in 2009 to eventually link the port to the Afghan ring road.
In 2015 India and Iran signed a Memorandum of Understanding (MoU) to develop the port after the Iran Nuclear Deal eases sanctions. In 2017 India sent its first shipment of wheat to Afghanistan via Chabahar, proving the route’s viability. In December 2018 India Ports Global Limited (IPGL) officially took over operations at the Shahid Beheshti terminal.
In May 2024 India signed a landmark long-term agreement to operate the Shahid Beheshti Terminal. India has committed approximately $120 million for port equipment and a $250 million credit line for infrastructure development.