WASHINGTON, D.C. – The United States government has announced the revocation of a key sanctions waiver for India’s operations at Iran’s Chabahar Port, a move that is set to significantly impact India’s regional trade and strategic initiatives. This decision, which will become effective on September 29, 2025, is a component of Washington’s “maximum pressure” campaign against Tehran.
The waiver, issued in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA), had previously allowed India and other nations to continue work on the port without facing U.S. penalties. Its revocation puts India in a difficult position, particularly following the signing of a 10-year agreement to operate the port on May 13, 2024. Under that contract, Indian Ports Global Limited (IPGL) committed approximately $120 million, with plans to raise another $250 million in credit for infrastructure development.
For India, the Chabahar Port is of immense strategic importance. It provides a vital and direct trade route to Afghanistan and Central Asia, effectively allowing India to bypass Pakistan. The port also serves as a crucial connection to the International North-South Transport Corridor, linking India with Russia and Europe. It has already been instrumental in delivering humanitarian aid, such as wheat, to Afghanistan.
This project is a direct strategic and economic counter to the China-Pakistan Economic Corridor (CPEC) and China’s expanding influence in the region. Situated just 140 kilometers from the Chinese-operated Gwadar Port in Pakistan, Chabahar was envisioned by India as a viable alternative to Beijing’s Belt and Road Initiative. The revocation of the waiver places substantial hurdles in the way of India’s ability to operate and compete in the region, threatening its investment and long-term strategic goals.
The U.S. State Department confirmed the decision, stating that it is “consistent with President Trump’s maximum pressure policy to isolate the Iranian regime.” The move is also aligned with Washington’s broader efforts to disrupt “illicit financial networks that sustain the Iranian regime and its military activities.”
With the sanctions exemption now revoked, India faces the complex challenge of balancing its strategic partnership with the United States while safeguarding its significant investment and maintaining its strategic presence in the Arabian Sea.
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