India’s strategic investment in Iran’s Chabahar Port is back in focus as the sanctions waiver granted by the US comes to an end soon. India is in discussions with both the United States and Iran to protect its strategic interests in the Chabahar Port. India had obtained a six-month exemption from US sanctions for the Chabahar Port in October 2025.According to sources, New Delhi is in talks with the Donald Trump administration to secure an extension of the sanctions waiver for the port, which is set to expire at the end of this month. At the same time, the government is negotiating with Tehran to work out an arrangement involving a local entity to operate the port, according to an ET report. This plan would include a legal provision ensuring that operational control shifts to India once sanctions are lifted, in case the waiver is not renewed.Engagements with both countries are ongoing, with efforts focused on identifying an outcome that best safeguards India’s interests, sources told the financial daily.Late on Sunday night, the external affairs minister held a conversation with his Iranian counterpart, during which they reviewed the evolving regional situation, including maritime movement through the Strait of Hormuz. Since the onset of the Middle East conflict, India has had the largest number of vessels transiting through the strait. The country has also resumed energy purchases from Iran after a prolonged gap.
Importance of Chabahar Port For India
A parliamentary committee on external affairs noted last month that recent developments have created uncertainty around the future of the port, which holds significant strategic importance for India. The panel also acknowledged that the government continues to remain in contact with all relevant stakeholders to address the challenges arising from the situation.In January, it was reported that India Ports Global Ltd (IPGL), which has been operating the port since 2024 under a 10-year agreement with Iran, may consider a structure involving a local partner for managing the facility. This arrangement would include an assurance that operational control would shift to India once sanctions are lifted.In 2024, India entered into a 10-year agreement to operate the strategically important Chabahar Port in Iran, with the objective of enhancing trade links with Central Asia. Located along the Gulf of Oman and originally conceptualised by India in 2003, the port serves as a key gateway for Indian goods heading towards Afghanistan and the Central Asian region.This route is designed to integrate with the International North-South Transport Corridor via road and rail links. This enables India to bypass Pakistan. India’s involvement in developing Chabahar is often seen in the context of countering Pakistan’s Gwadar Port and China’s Belt and Road Initiative.On May 13, 2024, India Ports Global Limited signed a long-term agreement with Iran’s Port and Maritime Organization. Under this arrangement, IPGL plans to invest approximately $120 million, along with an additional $250 million through debt financing. The 10-year contract, which includes provisions for automatic renewal, replaces the previous agreement governing the port’s operations.India’s participation also includes investments in infrastructure; expansion of road and rail connectivity, while also ositioning India as a significant destination for Iran exports.The Chabahar port is situated near the Strait of Hormuz and the Indian Ocean and holds considerable strategic value. Among Indian ports, Kandla in Gujarat is the closest, located around 550 nautical miles away, while the distance between Chabahar and Mumbai is approximately 786 nautical miles.
