The United States has withdrawn a key sanctions waiver for Iran’s Chabahar Port, dealing a new setback to India. The decision follows earlier U.S. actions to impose heavy tariffs and trade restrictions on New Delhi, straining ties between the two nations. The move was announced under President Donald Trump’s “maximum pressure” campaign aimed at isolating Iran.
According to the U.S. State Department, the waiver was originally granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA). It allowed India to operate in Chabahar Port for the reconstruction and development of Afghanistan. However, the waiver will now be revoked effective September 29, 2025, ending the exemption from U.S. sanctions.
The State Department warned that once the waiver ends, any individuals or entities involved in Chabahar’s operations — or in other activities covered under IFCA — may be subject to American sanctions. This change could directly impact Indian companies involved in the port, particularly those linked to construction, logistics, or infrastructure support.
India has invested heavily in the Chabahar Port, located on the Gulf of Oman, as a strategic trade route that bypasses Pakistan and connects to Afghanistan and Central Asia. In May 2024, India Ports Global Limited and Iran’s Ports and Maritime Organization signed a long-term agreement to operate the Shahid Beheshti terminal, replacing a previous 2016 deal. The partnership had been renewed annually despite challenges.
However, the U.S. has long opposed Tehran’s regional influence and alleged nuclear activities. The re-imposition of sanctions now threatens to slow down Chabahar’s development further, which had already been hampered by earlier restrictions. The move signals rising geopolitical friction and could force India to reassess its economic and strategic calculus in the region.