India is still trying to keep its Chabahar Port project in Iran alive, Foreign Secretary Vikram Misri said on Monday. But with the US-Iran war continuing for months, an American sanctions waiver no longer in place and trade tensions with Washington still hanging over the relationship, New Delhi is finding it harder to balance its interests in West Asia.
Chabahar has been targeted by US airstrikes several times since the conflict began. India had been working with Iran on the port under a 10-year agreement signed in 2024 for the Shahid Beheshti terminal.
Government data shows that India allocated Rs 400 crore for the port between FY17 and FY24. Another Rs 400 crore was allocated in FY26, with the final instalment transferred in August 2025. The Ministry of External Affairs told the Lok Sabha in April that India had completed its financial commitments under the agreement between India Ports Global Limited (IPGL) and Iran’s Ports and Maritime Organisation.
India still in talks on Chabahar
Speaking to reporters after Prime Minister Narendra Modi met Iranian President Masoud Pezeshkian on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Bishkek, Kyrgyzstan, Misri said India was still talking to key stakeholders to find a way forward for Chabahar Port.
India has been involved in the project for more than a decade.
“As you are aware, we have been associated with this project over a long period of time,” Misri said. He added that the conflict in West Asia over the “last several months” had affected cooperation between countries in the region and also led to “certain developments with regard to the Chabahar Port as well, especially with regard to the regime that was applicable,” ANI reported.
India, he said, remained “in discussion and in touch with various stakeholders in order to find a sustainable way forward.”
Pezeshkian also thanked India for its support for peace efforts. He told Modi that “the continuation of the war is in no one’s interest” and said Tehran valued India’s “civilizational, cultural, and people-to-people ties” and its possible role in helping find a settlement.
Modi said he had remained in touch with regional and world leaders “several times during the course of this conflict since it started in late February.” Iranian Foreign Minister Seyed Abbas Araghchi and other senior Iranian officials were also present at the meeting.
On trade between India and Iran, Misri said business is now being carried out entirely by private parties. These companies “have to navigate the international trading and financial environment”, reflecting how sanctions risks have pushed government-to-government trade engagement to the sidelines.
Misri also repeated India’s concerns over attacks on commercial ships in the region. Some of these attacks, he said, had “resulted in the loss of life of Indian seafarers.”
Chabahar has been a decade-long Indian project
Chabahar Port, located on Iran’s Gulf of Oman coast, is important for India because it gives the country a route to Afghanistan and Central Asia without having to depend on Pakistan.
The port is also part of the International North-South Transport Corridor, which is planned to connect India with Russia and Europe through Iran.
In May 2024, India signed a 10-year contract to operate the Shahid Beheshti terminal at Chabahar. India had committed more than $120 million for equipment at the port, along with a $250 million credit line for connectivity projects.
But India’s plans soon ran into US sanctions on Iran.
The US had allowed India to continue its work at Chabahar under a sanctions exemption since 2018. That changed in September 2025, when the Trump administration revoked the exemption as part of its “maximum pressure” campaign against Tehran. The change was due to take effect on September 29, 2025.
Washington later gave India a series of short extensions. These initially allowed New Delhi to “wind down” its involvement and were eventually extended until April 26, 2026. The waiver expired on that date and was not renewed.
India then pulled some of its personnel out of the port and prepaid its committed investment. New Delhi also began considering a plan to transfer its stake in the Shahid Beheshti terminal to an Iranian entity.
Iran war makes Chabahar’s future even harder
The situation became even more difficult on February 28, 2026, when the US and Israel launched large-scale strikes on Iran. The strikes included the assassination of Supreme Leader Ali Khamenei and marked the beginning of what is now known as the 2026 Iran war.
With the conflict continuing, any immediate revival of India’s Chabahar plans has become even more difficult.
The war has moved between periods of open fighting and uneasy pauses instead of settling into a proper ceasefire.
After the first strikes on February 28, Iran shut the Strait of Hormuz. The US then imposed a naval blockade on Iranian ports from mid-April. War picked up again in July after Iran attacked tankers in the strait, leading to another round of US air strikes.
Speaking from the Oval Office on Monday, US President Donald Trump again described Iran as a “failed nation”. He said the country had “350 per cent inflation”, no functioning navy or air force, and a leadership that was “largely dead.”
He again took a hard position on Iran’s nuclear programme, saying: “Iran will never have a nuclear weapon… If Iran had a nuclear weapon, Israel would have been wiped out.”
Indian seafarers have paid a heavy price
The Iran war has taken a heavy toll on Indian seafarers working on commercial ships in the Gulf and Strait of Hormuz.
Three Indian sailors were killed in early March, soon after the war began, prompting India to set up a quick-response team. In June, a US strike hit the Palau-flagged tanker MT Settebello, killing three of its 24 Indian crew members.
India protested the attack and urged Washington to stop strikes on commercial ships.
By July, at least 13 Indian seafarers had been killed and three were missing since the war began. The government said Indian nationals had suffered the highest number of casualties among merchant crews of any nationality.
Russian oil has created another problem for India
The Chabahar issue is not India’s only problem with Washington.
India’s continued purchase of discounted Russian crude has also become a major source of tension with the US.
Trump first imposed a 25 per cent “reciprocal” tariff on Indian goods in mid-2025. In August that year, the US added another 25 per cent penalty over India’s purchases of Russian oil.
That took the total tariff on Indian goods to 50 per cent, making it one of the highest US tariff rates imposed on a major trading partner. India called the move “unjustified and unreasonable” and said it would take “all necessary measures” to protect its economic interests.
The situation improved on February 2, 2026, when Trump announced a bilateral deal that brought the tariff down to 18 per cent. The agreement came after Modi agreed to reduce India’s purchases of Russian crude and shift some of its oil buying towards supplies from the US and Venezuela. India also agreed to reduce some trade barriers facing American goods.
A US Supreme Court ruling later struck down Trump’s wider emergency-powers tariffs. This briefly created more uncertainty in February, but the White House later said India’s lower tariff would remain in place under separate statutory authority.
