The United States has revoked the sanctions waiver that was granted in 2018 for operations at Iran's Chabahar Port, a move that has prompted the Indian government to examine the implications. The waiver, issued under the Iran Freedom and Counter-Proliferation Act (IFCA), had allowed India and other countries to continue development work on the port without facing US penalties. The revocation will come into effect on September 29, 2025.

The US State Department said the decision aligns with President Trump's "maximum pressure" policy to isolate the Iranian regime. According to the State Department, those who operate the Chabahar Port or engage in activities described in IFCA may be exposed to sanctions.

Chabahar Port is strategically important for India as it provides a trade route to Afghanistan and Central Asia, bypassing Pakistan. India first proposed developing Chabahar in 2003 to provide a gateway for its goods to reach landlocked Afghanistan and Central Asia via the International North-South Transport Corridor. In May 2024, India signed a 10-year contract to operate the port, marking the first time India would take over the management of an overseas port. Indian Ports Global Limited (IPGL) committed about $120 million, along with plans to raise another $250 million in credit for infrastructure around the port.

Since India took operational control of the Shahid Beheshti terminal at Chabahar in 2018, the port has handled more than 8 million tonnes of cargo. The port has also facilitated the supply of humanitarian assistance, including 2.5 million tonnes of wheat, to Afghanistan. In 2021, India supplied 40,000 liters of pesticide to Iran through the port.

The revocation of the waiver puts India in a difficult position. Some analysts caution that the decision could undermine India's connectivity plans with Afghanistan and Eurasia, while potentially strengthening China's Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC). The US decision also comes at a sensitive time, as India tries to balance ties with both the US and Iran, while also maintaining close relations with Israel and Gulf partners.

The Indian government is holding internal consultations on the development. The MEA has maintained that Chabahar is a vital connectivity project that enhances regional trade. India has so far not given a formal response to the US announcement.