US Extends Sanctions Waiver for Chabahar Port by Six Months: Strengthening India's Strategic Gateway to Afghanistan and Central Asia

Why in News

In a key diplomatic development, the United States has granted India a six-month exemption from sanctions on Iran's Chabahar port, effective from October 29, 2025. This comes after the US revoked a previous waiver in September 2025, which had raised concerns over India's ongoing development and operations at the port. The extension allows India to continue its work without facing penalties under US laws targeting Iran, ensuring uninterrupted access for humanitarian aid and trade to landlocked Afghanistan and Central Asian countries, amid shifting regional dynamics post the Taliban takeover in 2021.

Key Points

1. The US exemption, announced by the Ministry of External Affairs on October 30, 2025, provides relief from sanctions under the Iran Freedom and Counter-Proliferation Act, following an initial one-month grace period after India's diplomatic outreach.
2. Chabahar port, located in Iran's Sistan-Baluchistan province, is being co-developed by India and Iran since a 2005 agreement, with a 2016 trilateral pact involving Afghanistan to create a transit corridor bypassing Pakistan.
3. India Ports Global Ltd (IPGL), a state-owned entity, has operated the Shahid Beheshti Terminal since December 2018 under a 10-year deal, investing $25 million in equipment like mobile harbour cranes and planning $120 million more for upgrades.
4. Since operations began, the port has handled over 90,000 TEUs (20-foot equivalent units) of containers and 8.4 million metric tons of bulk cargo, including 2.5 million tons of wheat and 2,000 tons of pulses shipped to Afghanistan for humanitarian aid.
5. In 2021, India used the port to supply 40,000 litres of eco-friendly pesticides to Iran to combat locust swarms, highlighting its role in regional crisis response during the COVID-19 pandemic.
6. The waiver supports India's broader connectivity goals, linking Chabahar to the International North-South Transport Corridor (INSTC) and drawing interest from Uzbekistan and Russia for alternative trade routes avoiding China's Belt and Road Initiative.

Explained

What is Chabahar Port, and why is it strategically important for India?

Geographical and Operational Basics: Chabahar is a deep-water port on Iran's southeastern coast in the Gulf of Oman, offering direct open-sea access for large cargo ships without needing dredging, unlike shallower ports. It stands out as Iran's only oceanic port, just 170 km from Pakistan's Gwadar port developed by China, making it a counterbalance in regional maritime competition.

India's Development Role: India has committed to equipping and operating the Shahid Beheshti Terminal, providing cranes and offering a $250 million credit line for infrastructure, aiming to handle 8.5 million tons of cargo annually by 2026 through rail links to Zahedan.

Strategic Edge Over Alternatives: Unlike Pakistan's Karachi or Gwadar, Chabahar bypasses adversarial routes, enabling India to reach landlocked neighbors directly and reducing transit times by 40% compared to via Pakistan, per Economic Times analysis.

How did India's engagement with Chabahar begin, and what agreements shaped it?

Early Foundations (2005-2015): India signed its first development agreement with Iran in 2005, but progress stalled due to US sanctions; a 2015 MoU revived efforts, focusing on joint investment for the port's first phase amid India's push for Central Asian energy resources.

Trilateral Milestone (2016): In May 2016, during PM Modi's Iran visit, India, Iran, and Afghanistan inked the Chabahar Agreement, establishing a transit corridor for Afghan goods and Indian exports, formalized under the International Transport and Transit Corridor framework.

Operational Leap (2018 Onward): IPGL took over in December 2018 with a 10-year contract, marking India's first overseas port management; this built on the 2018 US waiver under Trump I, which exempted Indian entities to aid Afghan reconstruction.

What is the context of US sanctions on Iran, and how have they impacted Chabahar?

US Sanctions Framework: Enacted under laws like the Iran Freedom and Counter-Proliferation Act (IFCA) since 2012, these target Iran's nuclear program and oil exports, imposing secondary sanctions on third parties like India for dealings with Iran, potentially freezing assets or banning US trade.

2018 Waiver and Its Rationale: The first Trump administration granted a waiver in November 2018, recognizing Chabahar's role in delivering US-backed aid to Afghanistan under President Ghani, exempting Indian operations worth up to $50 million annually.

Recent Twists (2021-2025): Post-Taliban takeover in August 2021, the waiver lapsed in 2022; revived briefly in 2024 amid Taliban outreach, it was revoked on September 18, 2025, under renewed "maximum pressure" on Iran, but India's diplomacy secured a one-month buffer, now extended to six months.

What does the infographic in the Indian Express report reveal about Chabahar's operations?

Map Visualization Analysis: The infographic features a regional map highlighting Chabahar's location in Sistan-Baluchistan, with rail lines to Zahedan (Iran-Afghanistan border), connections to Kandla (India's Gujarat port), and proximity to Gwadar (Pakistan). It marks routes to Kabul and Central Asia, emphasizing bypass of Pakistan for secure Afghan access, underscoring Chabahar's 1,820 km shorter route to Central Asia versus via Karachi.

Cargo and Trade Data Breakdown: Charts show post-2018 growth: over 90,000 TEUs handled (equivalent to 1.8 million sq ft of container space), 8.4 MMT of bulk/general cargo, including 2.5 million tons of wheat and 2,000 tons of pulses to Afghanistan. A 2021 spike notes 40,000 litres of pesticide shipments, with projections for doubled capacity by 2026.

Free Zone Highlights: The Chabahar Free Zone, operational since December 2018, is depicted as a 14,000-hectare hub for processing and logistics, facilitating pandemic aid like ventilators and boosting India's $2.5 billion annual Afghan trade via the port.

How does this waiver impact India's regional connectivity and trade strategy?

Boost to Afghanistan and Central Asia Links: The extension ensures continued humanitarian flows—vital as India supplied 40,000 tons of wheat in 2022 despite Taliban rule—while opening doors for Uzbek and Kazakh goods, with Uzbekistan eyeing Chabahar as a BRI alternative.

Integration with INSTC: Chabahar serves as the Iranian leg of the 7,200-km INSTC (India-Russia via Iran), cutting shipping times to 25 days from 45 via Suez; Russia plans routes through Kazakhstan-Uzbekistan, per ET reports, enhancing India's $30 billion annual Central Asian trade potential.

Economic and Geopolitical Gains: It counters China's Gwadar dominance, supports India's SAGAR (Security and Growth for All in the Region) policy, and aligns with Quad goals for Indo-Pacific stability, though sanctions risks persist for equipment imports.

What are the broader implications for India's foreign policy in a multipolar world?

Balancing Act with US and Iran: The waiver reflects US pragmatism despite Trump II's Iran hawkishness, rewarding India's anti-China stance; it allows Delhi to maintain Tehran ties for energy (10% of India's oil imports) without alienating Washington.

Humanitarian and Soft Power Role: Amid Taliban isolation, Chabahar positions India as a reliable Afghan partner, echoing its 2021 vaccine diplomacy, and fosters BRICS synergy with Russia-Iran for diversified corridors.

Future Challenges and Opportunities: Experts in The Hindu note risks of waiver lapses post-April 2026, urging faster rail completion; success could triple port throughput, adding $1 billion to India's logistics sector by 2030.

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