US ends sanctions exemption for Iran’s Chabahar port

Once the waiver expires, individuals or entities operating at Chabahar Port, or engaging in other activities outlined in IFCA, risk exposure to US sanctions.

September 20, 2025
9:27 am
ASL Narasimha

The United States has decided to revoke the sanctions waiver granted in 2018 for Iran’s Chabahar Port, a move that could directly affect India’s plans to expand its presence at the strategic facility.

According to a statement from the US Department of State, the waiver—issued under the Iran Freedom and Counter-Proliferation Act (IFCA) to support Afghanistan’s reconstruction and regional economic development—will stand withdrawn effective September 29. The decision aligns with then-President Donald Trump’s “maximum pressure” policy aimed at isolating Tehran.

Once the waiver expires, individuals or entities operating at Chabahar Port, or engaging in other activities outlined in IFCA, risk exposure to US sanctions. The development is significant for India, which signed a 10-year contract in May 2024 to operate a terminal at Chabahar. This marks India’s first-ever overseas port management project. The move was seen as critical to boosting India’s trade with Afghanistan and Central Asia while bypassing Pakistan via the International North-South Transport Corridor (INSTC).

India first proposed developing Chabahar in 2003 as a gateway for regional connectivity. Progress, however, was repeatedly slowed by US sanctions on Iran over its suspected nuclear program.

Indian Ports Global Limited (IPGL) and Iran’s Port & Maritime Organisation (PMO) signed the long-term agreement in 2024, replacing a 2016 pact that had been renewed annually. The deal gave India operational rights at the Shahid Beheshti terminal.

Chabahar has already played a role in India’s regional outreach. In 2023, the port facilitated the shipment of 20,000 tonnes of wheat aid to Afghanistan, while in 2021, it was used to supply eco-friendly pesticides to Iran.

Recognizing its importance, India’s Ministry of External Affairs allocated ₹100 crore for Chabahar Port in 2024–25, underscoring its commitment to connectivity projects with Iran.

Located in Iran’s southern Sistan-Balochistan province on the Gulf of Oman, Chabahar is the closest Iranian port to India and is considered excellent from a nautical standpoint. India and Iran view it as a vital hub in the 7,200-km INSTC network, linking India with Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia, and Europe.