U.S. sanctions to hit Chabahar operators September 29.
The sanctions are expected to derail India’s regional connectivity ambitions and jeopardize its investment of over ₹200 crore in the strategically vital Chabahar port project.
Washington/New Delhi: In yet another hard-hitting measure against Tehran, the Trump administration has announced that it will revoke the special sanctions waiver previously granted to India for operations at Iran’s Chabahar port. The move, unveiled by U.S. Secretary of State Marco Rubio on Thursday (September 18, 2025), is set to take effect from September 29, marking the end of a seven-year exemption that New Delhi had considered vital to its regional connectivity strategy.
The waiver — first issued in 2018 during Trump’s earlier presidency — had allowed India to continue developing the Shahid Beheshti terminal at Chabahar despite sweeping U.S. sanctions against Iran. The exemption was justified at the time as supporting Afghanistan’s reconstruction, providing New Delhi a sanctioned route to ship goods into the landlocked country without having to rely on Pakistan.
But the latest decision reflects Washington’s return to “maximum pressure” tactics against Iran. In its statement, the U.S.
The move will not only disrupt India’s \$200-crore investment in the port but also deal a blow to its long-term plans to establish alternative trade corridors into Afghanistan and Central Asia. For years, New Delhi has highlighted Chabahar as a linchpin of its regional outreach, framing the project as a counterweight to China’s Belt and Road Initiative and Pakistan’s Gwadar port.
So far, India’s Ministry of External Affairs (MEA) has chosen not to issue an immediate response. Officials indicated they were studying the implications of the U.S. announcement and consulting stakeholders. But within strategic circles, the concern is palpable. “Chabahar was never just about commerce,” one senior diplomat told reporters privately. “It was about connectivity, influence, and keeping our footprint in Afghanistan. Without the waiver, our options shrink dramatically.”
The Trump administration, however, framed the decision as a matter of principle rather than friendship. Rubio, speaking from Washington, emphasized that India remains a valued partner but insisted the U.S. could not allow exceptions that weakened its Iran policy. “This is about consistency,” he said. “Every waiver sends mixed signals to Tehran. Our priority is to cut off Iran’s revenue streams and pressure the regime until it changes course.”
Back in February this year, President Trump had signed an executive order directing Secretary Rubio to “rescind or modify” all carve-outs that offered any relief to Iran. At the time, Trump specifically cited Chabahar, saying the waiver was “inconsistent with our broader sanctions strategy” and hinting it would soon be withdrawn.
For India, the timing could not be worse. Over the past two years, New Delhi has struggled to recalibrate its regional policy after the Taliban takeover of Afghanistan. Chabahar had offered one of the few levers of influence still available, a platform to deliver humanitarian aid and trade goods into Afghanistan without crossing Pakistani territory. The port was also central to India’s plans to link up with the International North-South Transport Corridor (INSTC), connecting South Asia with Central Asia, Russia, and Europe.
Experts warn that losing access to Chabahar could leave India with fewer tools to project influence in the region. “This is a major setback,” said Dr. “India’s entire investment in regional connectivity was premised on bypassing Pakistan and opening a reliable trade route. Without Chabahar, the vision becomes far more difficult, if not impossible.”
Some analysts, however, believe Washington’s move might be partly tactical — designed to bring India to the negotiating table. By revoking the waiver, the Trump administration increases pressure on New Delhi to align more closely with U.S. policy on Iran and Russia.
Still, there are risks. “The U.S. has to balance its goals,” noted a Washington-based South Asia expert. “India is central to America’s Indo-Pacific strategy. Pushing too hard on sanctions could alienate a partner we need to counter China.”
Iran, for its part, has long welcomed India’s involvement in Chabahar as a way to attract foreign investment and counterbalance Chinese influence. Tehran is likely to see the revocation of the waiver as yet another escalation by Washington. Whether Iran will offer India any protection from U.S. penalties if it continues operating at Chabahar remains unclear.
For now, the Trump administration appears unmoved by such concerns. At Chequers earlier this week, when asked about the impact on India, Trump struck a blunt note. “We want consistency in sanctions,” he said. “We want Iran to feel maximum pressure. No special deals.”
As September 29 approaches, the clock is ticking for New Delhi. Unless there is a reversal or a new arrangement, India may find its flagship connectivity project stalled indefinitely — collateral damage in a broader geopolitical contest between Washington and Tehran.