The United States has imposed sanctions on India’s flagship port project in Iran, ending a rare exemption that had allowed New Delhi to continue developing the Chabahar Port despite sweeping restrictions on Tehran.
The move, effective September 29, was announced by State Department spokesman Tommy Pigott, who said the decision was “consistent with President Trump’s maximum pressure policy to isolate the Iranian regime.”
The sanctions revoke a 2018 waiver first granted to India under Trump’s earlier administration, which had permitted Indian investment in Chabahar to support Afghanistan’s reconstruction and regional trade. At the time, Kabul was still under a Western-backed government, and Chabahar was seen as a vital gateway bypassing Pakistan.
But with the Taliban’s return to power in 2021 and Afghanistan largely closed to Indian access, Washington has now moved to tighten restrictions. Under the new measures, Indian state-run firm India Ports Global Limited (IPGL) and other companies involved will have 45 days to exit Chabahar or face severe penalties, including frozen US-based assets and barred transactions.
Experts warn the step could have wide-reaching effects. “Any inclusion of an Indian firm on the sanctioned list has the potential to create a cascading effect where banks and other companies may not transact with the designated business,” said Joshua Kretman, a sanctions expert at law firm Dentons.
India has invested heavily in Chabahar, signing a 10-year, $370 million deal just last year. Strategically located near Pakistan’s restive Baluchistan province and only 200 kilometers from China’s Gwadar port, Chabahar has long been viewed in New Delhi as crucial for securing access to Iran, Afghanistan, and Central Asia without reliance on Pakistan.
Reacting cautiously, Indian foreign ministry spokesman Randhir Jaiswal said, “We are presently examining the implications that this revocation has for India.”
Analysts believe New Delhi is likely to tread carefully. Aparna Pande of the Hudson Institute noted, “At a time when there is an American administration which is imposing sanctions and tariffs as punitive action, India will likely adopt a wait-and-watch approach.”
Still, some argue the sanctions could push India to diversify. “India may choose to wear the sanctions as part of a broader effort amongst non-Western Great Powers, including China and Russia, to reduce reliance on the US economy and decouple from Western-controlled financial networks,” said geopolitical strategist Kadira Pethiyagoda.
The decision marks another friction point between Washington and New Delhi, following earlier US tariffs over India’s Russian oil purchases. For now, India faces a difficult choice: safeguard its strategic foothold in Chabahar or risk a direct clash with its most important security partner.
