The government-appointed directors on the board of India Ports Global Ltd (IPGL), the state-run firm tasked with developing and running the India-funded Chabahar Port in Iran, have resigned en masse amid renewed US sanctions on the project. The company’s website has also been taken down as the government seeks legal advice on its next steps.
The sanctions, which came into effect on Monday (September 29), give Indian entities, including IPGL, 30 days to exit Chabahar Port or risk asset freezes and exclusion from the US financial system. A comfort letter from the US Office of Foreign Assets Control (OFAC) allows India until October 28 to wind down operations, with an interim deadline of October 22 to submit details of the withdrawal plan.
According to sources, the IPGL board met on Sunday, September 28, a day before sanctions took effect, and all government-nominated directors resigned to avoid personal exposure to sanctions. “Because of the sanctions, individuals too would have come under the scanner, which would have caused embarrassment. Hence, all government nominees stepped down, and the website has been taken offline,” one source said.
The Attorney General has advised the government to consult lawyers specializing in sanctions law to navigate the situation. India must now determine whether to continue, renegotiate, or terminate its 10-year agreement with Iran’s Ports and Maritime Organisation (PMO) to operate the Shahid Beheshti terminal at Chabahar Port.
Signed in March 2024, the deal expanded India’s investment in the port to $120 million, including equipment purchases. However, the agreement does not recognise sanctions as a force majeure event, complicating India’s exit, as termination would trigger penalty clauses.
In 2018, the Trump administration granted a rare waiver allowing India to continue work at Chabahar for humanitarian cargo shipments to Afghanistan. With the US withdrawal from Afghanistan, Washington has since revoked the waiver, reducing its interest in Chabahar and putting pressure on New Delhi.
Located in Iran’s Sistan-Baluchistan province, outside the Persian Gulf, Chabahar Port is a strategic project for India, offering a direct sea-land trade route into Afghanistan and Central Asia while bypassing Pakistan. The port is also a key link in the International North-South Transport Corridor (INSTC), connecting India with Russia, Central Asia, and Europe.
India Ports Global Chabahar Free Zone (IPGCFZ), IPGL’s Iranian subsidiary, currently operates the Shahid Beheshti terminal, where India has already installed six mobile harbour cranes purchased under the original $85 million investment plan.
“The government will now have to take a call on whether to risk penalties under the contract or find a negotiated settlement with Iran,” said a second source, noting that the US sanctions have placed India’s strategic interests in a difficult position.
