US President Donald Trump recently threatened to impose a 25% additional tariff against countries indulging in business with Iran — sparking widespread concern about the fate of India-operated Chabahar port. New Delhi is currently operating under a six month conditional US sanctions waiver that will expire in late April. Officials are also engaged in intense negotiations with Washington to protect its critical strategic and connectivity asset.
“As you are aware, on October 28, the US Department of Treasury had issued a letter outlining the guidance on the conditional sanctions waiver valid till April 26, 2026. We remain engaged with the US side in working out this arrangement,” said MEA spokesperson Randhir Jaiswal on Friday.
The clarification from the Ministry of External Affairs came amid buzz that India was looking to withdraw from the project following the threat of additional US tariffs. Trump had led crippling economic sanctions against Iran in September last year — granting India a brief exemption from punitive measures on the Chabahar port project.
India in talks with Washington
According to multiple source-based reports, India is currently exploring various options to retain its presence within Chabahar Port. An NDTV report noted that officials were now looking at a “middle ground” approach that could address American concerns while safeguarding domestic interests. Details about the “complicated” negotiations remain scarce, but sources told the publication that “exiting the port is not an option”. A separate HT report quoted people familiar with the matter to add that the Indian government had already taken several steps to reduce the exposure of state-run entities and officials to those sanctions.
News agency PTI reported that India is in the process of transferring approximately $120 million — the amount it committed for the project –- as part of a move to end its direct exposure to the Chabahar port project. Sources added that officials were mulling the possibility of creating a new entity to carry forward the development project. This option will end the Indian government’s exposure to the project, but in a way it will ensure continuation of New Delhi’s support
Why is Chabahar Port important?
India had proposed developing the Chabahar Port in 2003 to provide an alternative route for Indian goods to reach landlocked Afghanistan and Central Asia via road and rail connectivity under the International North-South Transport Corridor, bypassing Pakistan. The progress on the project had slowed earlier due to US sanctions on Iran linked to its suspected nuclear programme.
To operationalise India’s role at the port, a long-term agreement was signed between Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran. The agreement replaces the initial 2016 pact covering India’s role at the Shahid Beheshti terminal in Chabahar Port, which had been extended annually.
In recent years, Chabahar has been utilised for key consignments, including the shipment of 20,000 tonnes of wheat assistance to Afghanistan in 2023. In 2021, the port was also used to send environmentally friendly pesticides to Iran.