India has not allocated any funds for the Chabahar port project in Iran in this year’s Union Budget. The move came in the backdrop of the US’ fresh sanctions on Iran.
The move also marks a departure from the past as India had been making an annual outlay of ₹100 crore towards the connectivity project in Iran’s Sistan-Balochistan province, PTI reported.
Notably, India has also been a major partner in development of the Chabahar port. India and Iran had also signed a 10-year agreement to develop the strategically significant Chabahar Port in Iran.
US’ waiver on India to end on April 26
In September last year, the US had imposed crippling economic sanctions on Iran but had granted India a six month exemption from the punitive measures on the Chabahar port. The waiver will come to an end on April 26.
‘India is engaged with the US on Chabahar issue’
Last month, the External Affairs Ministry Spokesperson Randhir Jaiswal had said India is engaged with the US on the issue related to the Chabahar port project.
India was reportedly mulling various options relating to the project after US President Donald Trump’s administration threatened a 25% additional tariff on countries doing business with Tehran.
What do we know about the Chabahar port?
The Chabahar port is being jointly developed by India and Iran to enhance regional connectivity and deepen trade ties. Both countries were actively advocating for Chabahar to serve as a key node in the International North-South Transport Corridor (INSTC).
The INSTC is a 7,200-km multi-modal transport network designed to facilitate the movement of freight between India and markets in Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.
Notably, the project is seen as vital for India’s access to Afghanistan and Central Asia while bypassing Pakistan.
How much did other countries get?
The budget allocation under ‘Aid to Countries’ was increased to ₹5,686 crore in FY 2026-27, about 4% higher than last year’s Budget Estimates of ₹5,483 crore.
The allocation for Bangladesh was halved to ₹60 crore as compared to what it was given in FY 2025-26. In the Budget 2025-26, Bangladesh was allotted ₹120 crore.