US Revokes Sanctions Exemption on Iran’s Chabahar Port, Impacting India’s Strategic Gateway
New Delhi, September 18, 2025 — The United States Department of State has announced the revocation of the sanctions exemption for Iran’s Chabahar Port, effective September 29, 2025. This decision marks a significant shift in Washington’s Iran policy and poses crucial challenges for India’s strategic interests in the region.
Background: The 2018 Exemption and India’s Role at Chabahar
Under the Iran Freedom and Counter-Proliferation Act (IFCA) enacted in 2012, the US had imposed broad sanctions on Iran to counter its nuclear program and regional proxy activities. However, in 2018, the Trump administration granted an exemption to facilitate Afghanistan reconstruction efforts through the Chabahar Port terminal.
India has operated the Shahid Beheshti terminal at Chabahar Port since 2018 via India Ports Global Limited, investing over $120 million in port infrastructure and allied credit lines. The port is a vital transit hub for India to bypass Pakistan and directly access Afghanistan and Central Asia, fostering trade and humanitarian aid deliveries.
Details of the Revocation Order
The US State Department cited consistency with Trump’s maximum pressure policy aimed at isolating the Iranian regime and preventing financing of Iran’s Islamic Revolutionary Guard Corps (IRGC) and military operations. The revocation applies to all persons operating the Chabahar Port or engaged in activities under IFCA, making them subject to US sanctions starting September 29, 2025.
Strategic and Economic Implications for India
The revocation exposes Indian operators at Chabahar to potential US penalties, threatening cargo operations, ongoing investments, and planned expansions such as increasing terminal capacity from 100,000 to 500,000 TEUs and connecting the port to Iran’s railway network by 2026.
India faces a diplomatic balancing act—managing its growing partnership with the US while maintaining longstanding commercial and strategic ties with Iran, which remains a key node in New Delhi’s regional infrastructure network and a counterweight to China’s Gwadar Port in Pakistan.
Regional Connectivity and Infrastructure Importance
Chabahar Port’s strategic importance lies in enabling India to access landlocked Afghanistan and Central Asia directly, bypassing Pakistan. This connectivity supports economic growth, regional trade integration, and geopolitical strategy. The port also facilitates India’s delivery of humanitarian aid and supports multi-modal transport projects like the International North-South Transport Corridor (INSTC).
India has invested heavily not only in port infrastructure but also in linked projects including the Chabahar-Zahedan railway and road corridors connecting to Afghanistan.
Moving Forward: Challenges and Diplomacy
As the sanctions exemption ends, Indian companies must navigate increased operational risks and regulatory complexities. Experts suggest the move might slow down expansion plans and could prompt India to adjust its regional trade strategies.
The revocation also tests India’s ability to maintain its regional connectivity vision amidst enhanced US sanctions pressure and advancing geopolitical shifts in West Asia.
Conclusion
The US decision to revoke the sanctions exemption on Iran’s Chabahar Port effective September 29, 2025, signals a renewed focus on maximum pressure against Iran. It significantly impacts India’s strategic gateway to Central Asia and Afghanistan, complicating trade and infrastructure ambitions. India now faces the challenge of balancing its geopolitical partnerships while safeguarding its connectivity projects.
