India's strategic commitment to Chabahar Port persists amid US sanctions uncertainty

Livemint - Economy · 13 Feb 2026 · 2 min read
Prelims · International relations Mains · GS2 International relations High relevance

India plans to continue operating Chabahar Port in Iran despite impending US sanctions, maintaining its $120 million investment and strategic access to Afghanistan/Central Asia while avoiding new commitments until geopolitical tensions ease.

Key points

Chabahar Port serves as India's key strategic asset in Iran, providing direct access to Afghanistan and Central Asia while bypassing Pakistan, with cargo handling growing to 80,000 TEUs in FY25.

US sanctions waiver ending in March 2026 poses operational challenges, though India's existing $120 million port infrastructure avoided restrictions during previous sanction periods.

India has completed its $120 million investment in Shahid Beheshti terminal but holds back on additional $250 million credit line until geopolitical conditions improve, per Union Budget 2026-27 allocations.

[GS2-International Relations] The port counters China's Gwadar Port in Pakistan, part of India's dual strategy to secure regional trade routes while balancing US-Iran tensions.

2024's 10-year contract with Indian Ports Global Ltd (IPGL) commits India to operate five berths, reflecting long-term strategic intent despite current constraints.

[GS3-Economy] Chabahar handled 1.2 million tonnes of bulk cargo in FY25, demonstrating commercial viability as a trade corridor for Indian exports like rice, pharmaceuticals, and machinery.

The project connects to India's Connect Central Asia Policy by providing alternative supply chains amid Pakistan's denial of land transit rights to Afghanistan.

Observer Research Foundation experts warn that Indian exit could cede space to China, complicating US strategic interests in the region.

Way Forward: India should negotiate a fresh US sanctions waiver emphasizing Chabahar's humanitarian role in Afghanistan, establish rupee-rial trade mechanisms for port operations, and accelerate International North-South Transport Corridor linkages.

Key terms

Chabahar Port

Iran's only oceanic port developed with Indian investment, located in Sistan-Baluchistan province. Strategically crucial for India as it provides sea-land access to Afghanistan via the Delaram-Zaranj highway, bypassing Pakistan. Part of India's 'Connect Central Asia' policy and counter to China's Belt and Road Initiative presence in Gwadar.

Shahid Beheshti Terminal

The specific terminal at Chabahar Port operated by India's IPGL since 2018 under a 2016 trilateral agreement with Iran and Afghanistan. Handles container and bulk cargo, with India investing $120 million in infrastructure. Critical for supplying humanitarian aid to Afghanistan during Taliban rule.

Indian Ports Global Ltd (IPGL)

A JV between Jawaharlal Nehru Port Trust and Kandla Port Trust established under India's Shipping Ministry to oversee overseas port investments. Manages Chabahar operations and represents India's strategic port diplomacy. Modeled after China's COSCO to secure maritime infrastructure abroad.

US Secondary Sanctions

Economic restrictions imposed by the US on third-country entities dealing with sanctioned nations like Iran. Affect Chabahar as they deter international shipping companies and investors. India secured a sanctions waiver in 2018 by framing the port as vital for Afghanistan's stability.