Chabahar Port is located on Iran's southeastern coast along the Gulf of Oman
New Delhi: India on Friday ruled out any immediate plan to withdraw from the strategically important Chabahar Port project in Iran amid geopolitical pressure and fresh tariff threats from Washington. India is actively engaging with the United States to operate the port within the framework of a sanctions waiver valid until April 26, 2026.
Addressing a weekly media briefing, Ministry of External Affairs spokesperson Randhir Jaiswal said the US Treasury Department had issued a letter on October 28, 2025, formally informing India about an unconditional sanctions waiver related to the Chabahar Port project.
“The sanctions waiver we have received is valid until April 26, 2026. We are in discussions with the U.S. side to work within this framework,” Jaiswal said, responding to reports suggesting New Delhi may reconsider its involvement in the project following renewed U.S. pressure on Iran.
US tariff threat and India’s response
The clarification comes days after the Trump administration announced a 25 per cent tariff on countries doing business with Iran, raising concerns over the future of projects operating under sanctions exemptions, including Chabahar.
Regarding the status of bilateral trade with Iran and tariff issue, Jaiswal said India is closely monitoring developments but stressed that the country’s trade exposure to Iran remains limited. “In the last financial year, India’s overall bilateral trade with Iran stood at $1.6 billion. Our exports were around $1.2 billion and imports about $0.4 billion. Iran accounts for roughly 0.15 per cent of India’s total global trade,” he said.
Experts said the tariff threat is expected to have a minimal direct economic impact on India, though officials acknowledge that the strategic and diplomatic implications are more significant.
India’s position on Iran and Chabahar
Reiterating New Delhi’s broader approach, the MEA spokesperson said India has a long-standing partnership with Iran and is closely following the evolving situation there. “We are looking at the developments that are happening and will accordingly take our partnership forward,”
India is a major stakeholder in the Chabahar Port, located in Iran’s Sistan-Balochistan province on the Gulf of Oman. The port is central to India’s regional connectivity strategy, providing access to Afghanistan and Central Asia while bypassing Pakistan, which blocks overland routes.
New Delhi is evaluating ways to safeguard its investment without escalating exposure to sanctions-related risks. These include restructuring operational mechanisms and exploring financial arrangements that allow continued engagement while limiting direct government liability.
Why Chabahar matters to India
Chabahar is not merely a commercial port for India but a strategic gateway. It anchors India’s westward outreach and is envisioned as a key node in the International North-South Transport Corridor (INSTC), a 7,200-km multimodal trade route linking India with Iran, Afghanistan, Central Asia, Russia and Europe.
India has committed close to $500 million to the project through port operations, infrastructure development and associated connectivity initiatives. The foundational memorandum of understanding (MoU) between India and Iran for the development of Chabahar was signed in 2016, marking a major milestone in bilateral ties.
Strategic analysts note that stepping away from Chabahar could weaken India’s regional leverage and potentially allow rival powers, particularly China to expand their footprint in the region. It is the largest trading partner of Iran.
Unrest in Iran and safety advisories
The uncertainty around Chabahar has been compounded by widespread unrest in Iran, where anti-government protests have reportedly led to over 2,500 deaths. Responding to a media query regarding Iran unrest, Jaiswal said around 9,000 Indian nationals, mostly students, currently reside in Iran.
“In recent days, considering the situation in Iran, we have issued advisories advising Indians to avoid travel to Iran. Those living there are advised to return. We are keeping a close watch on the situation,” he said, adding that the Indian Embassy in Tehran remains in constant touch with the Indian community.
Wait-and-watch approach
India is adopting a cautious wait-and-watch approach, continuing its engagement on Chabahar under the existing sanctions waiver while addressing U.S. concerns through diplomacy and closely assessing instability in Iran.
For now, India has made it clear that there is no decision to pull out of Chabahar, underscoring that the project remains a critical component of India’s long-term strategic and connectivity interests, even as geopolitical headwinds intensify.
“We have a long-established relationship with Iran. We are carefully watching developments on the ground and will calibrate our partnership accordingly.” MEA spokesperson said.
China factor looms large
Strategic analysts note that uncertainty over India’s role in Chabahar could open space for China, which already enjoys deep economic and political ties with Iran. Beijing is Iran’s largest trading partner and a major buyer of its sanctioned oil, and the two countries signed a 25-year strategic cooperation agreement in 2021 covering energy, infrastructure and ports. Experts warn that prolonged instability in Iran or hesitation by India could allow China to expand its footprint at or around Chabahar, potentially marginalising New Delhi’s presence and weakening its regional connectivity ambitions. Former diplomats have cautioned that China’s ability to operate with fewer political constraints and deploy large-scale capital gives it an advantage in volatile environments-a factor India must weigh carefully while navigating U.S. pressure and Iran’s internal turmoil.
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