Trump administration withdraws sanctions waiver to Chabahar port

Why in News ?

• Recently, Trump administration has announced withdrawal of the sanctions waiver for Chabahar Port project in Iran.
• The 10 days period is given before waiver end comes into effect i.e on 29 September 2025.
• This step exposes Indian and other entities associated in Chabahar in harmony.
• U.S. sanctions Iran under Iran Freedom and Counter Proliferation Act (IFCA) 2012.

Background

• Chabahar Port: It is Located in Sistan–Balochistan province of Iran, on the Gulf of Oman.
• India’s strategic interest:
  • This provides way to Afghanistan and Central Asia bypassing Pakistan.
  • It counterbalances the China–Pakistan’s Gwadar Port which comes under  China Pakistan Economic Corridor (CPEC).
• Waiver (2018):
  • During Trump 1.0 , U.S had granted India a special waiver to allow India to develop Chabahar despite Iran sanctions imposed on Iran.
  • Waiver covers port, Chabahar–Zahedan railway, and shipments of humanitarian/non-sanctionable goods.

Details of the Decision

• Waiver under Iran Freedom and Counter-Proliferation Act (IFCA) has been withdrawn..
• As a result after Sept 29, 2025: the following will be sanctionable
  • Port operations,
  • Railway project,
  • Shipments movement
• India’s Indulgence/Investment till now:
  • India have supplied equipment of total worth aroud 25 million US dollar (for example. cost of mobile harbour cranes).
  • Port was in operation mode since Dec 2018 and handled well by India Ports Global Ltd (IPGL).
  • Cargo handled: 90,000+ TEUs containers, 8.4 million MT bulk/general cargo.
  • As a Humanitarian aid: 2.5 million tons wheat plus 2,000 tons pulses were supplied to Afghanistan in the time of crisis through Chabahar port.

Impact on India

1. Strategic setbacks
   • Harmfully impact to India’s wishful connectivity to Afghanistan & Central Asia.
   • Induces the issues to counterbalance Gwadar Port (China–Pakistan).
2. Geopolitical Complexity
   • May negatively impact  India– Iran relations as already there is oil sanction on Iran.
   • It will increase dependency and reliance on alternate corridors (e.g., International North-South Transport Corridor (INSTC).
3. Economic hazard
   • Risk associated of loss of Indian’s stakeholders investment.
   • Indian companies considerably face threat of U.S. secondary sanctions in future.
4. Humanitarian assistance
   • Greatly would impact India’s aid supply chain of essential goods to Afghanistan via Chabahar port.

Impacts on other nations

 Impact on Afghanistan

1. Trade and Transit Disruption
   • Chabahar as Afghanistan’s key seaport through which for imports and exports used to happen will negatively be impacted.
   • This withdrawal would hamper essential goods like food, medicine and fuel.
2. Economic Slowdown
   • Increased dependency on Pakistan’s routes will increase transport cost and safety concerns.
   • Afghanistan economy would be damaged , and economic activities would take more time to recover.
3. Humanitarian Concerns
   • Humanitarian assistance may not timely reach to the patients in Afghanistan along with food items like wheat, pulses.
4. Strategic Dependence
   • Pakistan will get the benefit out of this decision as Afghanistan would depend on Pakistan in many aspects.

Impact on Iran

1. Loss of Indian Investment Benefits
   • Indian stakeholder and Government might lose investment.
   • Sanctions will also affect the foreign investments.
2. Operational Challenges for Chabahar
   • The expansion of port would greatly be impacted
   • Some ship only would go to the port because of fear of US.
3. Geopolitical Pressure
   • U.S will take advantage of this opportunity to meet its interest in the region.
   • Sanctions risk may undermine this vision.

Way Forward

• Diplomatic engagement:
  • Negotiate with U.S, to seek reconsideration on the basis of   humanitarian/strategic connectivity.
  • To enhance coordination with Iran to secure India’s strategic stakes.
• Regional partnerships:
  • Need to Work with Central Asian countries, European Union (EU) and others to sustain and make Chabahar port anyhow operational.
• Diversify routes:
  • Accelerate alternate route such as International North–South Transport Corridor (INSTC) linking India-Iran-Russia-Europe.
• Balance relations:
  • Carefully manage ties with both U.S. and Iran to safeguard interests.