- By Shivangi Sharma
- Thu, 18 Sep 2025 11:30 PM (IST)
- Source:JND
The United States has cancelled the sanctions waiver that permitted India and other nations to maintain efforts on Iran's Chabahar Port without incurring penalties. The move, which was announced by the State Department, will take effect from September 29, 2025, bringing an end to an exemption that was given in 2018 for the first time.
The action aligns with US President Donald Trump's maximum pressure policy to isolate the Iranian regime, State Department principal deputy spokesperson Thomas Pigott stated. "The Secretary of State has cancelled the sanctions exception granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction aid and economic growth," Pigott added.
Why Chabahar Port Matters
Iran's Sistan-Balochistan province, also on the Gulf of Oman, hosts Chabahar Port, which is a critical connectivity project built by Iran and India. India finds the port strategically significant. It offers India a direct trade route to Afghanistan and Central Asia without having to go through Pakistan, and acts as India's response to China's development of Pakistan's Gwadar Port.
India has been constructing the Shahid Beheshti Terminal at Chabahar with India Ports Global Limited (IPGL). Since India took over the operations, more than 8 million tonnes of cargo have been handled by the port, including critical humanitarian aid consignments to Afghanistan, especially since the Taliban coup.
India's Commitments At Risk
The timing of the revocation of the waiver is important. On May 13, 2024, India inked its first-ever long-term overseas port operation management deal, a 10-year contract to run Chabahar with Iran's Port and Maritime Organisation on a partnership basis. According to the agreement, IPGL committed USD 120 million of investment and another USD 250 million of credit towards the development of the surrounding infrastructure.
For India, this pact was a milestone in asserting its economic and strategic presence overseas. The US sanctions threat now jeopardises these plans.
Impact On India's Regional Strategy
he move would be a blow to India's vision of greater connectivity through the International North-South Transport Corridor (INSTC), a scheme that aims to connect India with Afghanistan, Central Asia, and even Europe without going through traditional chokepoints.
Without the waiver, Indian firms and employees involved in the port risk face US sanctions under IFCA. Financing, insurance, and partnerships would become much harder.
Washington State Department maintains that the exemption now does not fit its policies. The government says the revocation is in line with efforts to cut into "illicit financial networks that support the Iranian regime and its military operations."