US revokes Chabahar sanctions waiver, dealing blow to India’s regional strategy

Washington (US): In a major setback to New Delhi, the Trump administration has revoked the sanctions exemption that allowed India to operate the Chabahar Port in Iran, a move that threatens both India’s trade outreach to Central Asia and its humanitarian aid channels to Afghanistan.

Waiver revoked under maximum pressure policy

The US State Department confirmed on Tuesday that the waiver granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction assistance and economic development will be revoked effective September 29, 2025.

“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,” the notification read, citing Iran’s alleged support to regional proxies and development of advanced weapons systems.

The revocation places individuals and organisations operating Chabahar, including India’s state-run India Ports Global Limited (IPGL), under the risk of secondary sanctions.

India’s stakes in Chabahar

India has been using the Shahid Beheshti terminal at Chabahar since 2018, after the first Trump administration itself approved the waiver recognising its role in facilitating reconstruction and humanitarian aid to Afghanistan.

For New Delhi, Chabahar has been crucial for two reasons:

• Bypassing Pakistan: It offered India an alternative trade and aid route to Afghanistan, avoiding Pakistan’s restrictions.

The port also plays a central role in the International North-South Transport Corridor (INSTC), a multimodal project linking India with Iran, Russia, and Central Asia.

Historical and strategic significance

Chabahar is not only a strategic asset but also a site of deep historical resonance. The region, known in antiquity as Tiz, was described by medieval scholar Al-Biruni in his Tarikh Al-Hind as the starting point of India’s sea coast. The name “Chabahar” itself means “four springs”, a reference to its favourable climate.

Another blow in strained ties

For India, the loss of the waiver comes as a fresh challenge in an already complex relationship with Washington, where differences over trade have been simmering. Observers note that the decision could undermine India’s regional outreach while simultaneously strengthening China’s strategic footprint in South Asia.

Conclusion

As the revocation deadline approaches, India faces difficult choices: scaling down its Chabahar operations to avoid US sanctions or seeking new diplomatic ground to safeguard its strategic interests in Afghanistan and Central Asia. Either way, the US decision marks a significant shift in the geopolitical landscape of the region.