India ends long engagement at Iran’s Chabahar port as US sanctions loom

India's decade-long engagement in developing Iran’s Chabahar port, a key gateway to landlocked Afghanistan, is coming to an end after US President Donald Trump's fresh warning that any country involved in business with Tehran will face a 25 per cent tariff.

On January 12, Trump announced that any country continuing business ties with Iran would be hit with a 25 per cent tariff on all trade with the United States, dealing a major blow to New Delhi's strategic play.

According to Indian media reports, US authorities allowed India some room to exit its commitments. The Office of Foreign Assets Control (OFAC), which operates under the US Treasury Department, approved a six-month sanctions waiver after India shared its plan to gradually shut down all activities at Chabahar, including operations at the Shahid Beheshti terminal and related facilities.

The exemption took effect on October 29, 2025, and will remain valid until April 26 this year.

India had already transferred the full amount it pledged for the project—about $120 million—more than a year before sanctions were brought back.

Citing sources, the reports said that the payments were completed around the time India approved funds ahead of signing a 10-year agreement in March 2014 to operate the Shahid Beheshti terminal at Chabahar. With the entire amount already paid, India no longer has any pending financial obligations related to the port.

It added that Iran now has full control over how the money is used under the terms of the long-term agreement. If Iranian authorities choose to purchase equipment such as cranes or other machinery, they can do so on their own and continue port operations without India’s involvement.