The US administration led by President Donald Trump has said it is withdrawing the sanctions waiver granted to the Chabahar port in Iran, which is being developed by India, thereby ending the waiver from 2018 during Trump 1.0. The sanctions regime on the strategically-located port will come into effect from September 29, about 10 days from now.
While this move is targeted towards Iran, it will adversely impact India — which has been developing the port (Shahid Beheshti Terminal, Chabahar Port) along with Iran — in accessing Afghanistan and Central Asia. Sources said that this is a major setback for India’s plans to develop the strategically-located port, close to the Chinese-developed Gwadar port in Pakistan.
The US State Department’s principal deputy spokesperson Thomas Pigott said, in a statement, “…consistent with President Trump’s maximum pressure policy to isolate the Iranian regime, the Secretary of State has revoked the sanctions exception issued in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction assistance and economic development, effective September 29, 2025. Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions under IFCA.”
The move is consistent with President Donald Trump’s maximum pressure policy to isolate the Iranian regime, Pigott said.
The US had exempted the Chabahar port project from sanctions in 2018, saying “the secretary has provided for an exception from the imposition of certain sanctions under the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) with respect to the development of Chabahar Port and the construction of an associated railway and for the shipment of non-sanctionable goods through the port for Afghanistan’s use, as well as Afghanistan’s continued imports of Iranian petroleum products.” However, with the new guideline, these exemptions will be removed.
Chabahar is a deep water port located in the Sistan-Baluchistan province of Iran. It is the closest Iranian port to India, and is located in the open sea, providing easy and secure access for large cargo ships.
During a visit by Prime Minister Narendra Modi in May 2016, a Trilateral Agreement to establish the International Transport and Transit Corridor (Chabahar Agreement) was signed by India, Iran and Afghanistan.
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India has so far supplied six Mobile Harbour Cranes (two 140 tonne and four 100 tonne capacity) and other equipment worth USD 25 Million.
The Indian company, India Ports Global Limited (IPGL), through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of the Chabahar Port in December 24, 2018.
Since then, it has handled more than 90,000 TEUs of Container traffic and more than 8.4 MMT of Bulk and General Cargo. The port has also facilitated the supply of humanitarian assistance, especially during the Covid-19 pandemic. Till date, a total of 2.5 million tonne of wheat and 2,000 tonne of pulses have been trans-shipped from India to Afghanistan through Chabahar Port. In 2021, India supplied 40,000 litre of environment-friendly pesticide (Malathion) to Iran to fight locust menace through the port.
