US Waiver Expires on India's Chabahar Port Project in Iran

Relations between the United States and India face challenges over New Delhi's investment in Iran's Chabahar Port. The US waiver exempting the project from sanctions expired on April 26, 2026, according to reports. India has invested at least $120 million in the port's Shahid Beheshti terminal.

The port, located in southeastern Iran on the Gulf of Oman, provides India with a maritime route to Afghanistan and Central Asia. This route avoids land transit through Pakistan due to ongoing tensions between the two countries. India has used the port for shipments to Afghanistan over the past decade.

Chabahar is positioned about 140 kilometers west of Pakistan's Gwadar port, which is funded by China. The port forms part of the International North-South Transport Corridor, connecting India to Russia via Iran through a 7,200-kilometer network of roads, rails, and sea routes.

Kabir Taneja, a fellow at the Observer Research Foundation, stated that the port offers India access to regions seeking diversified coastal connections. India and Iran agreed to develop the port in 2003, but US sanctions delayed progress. The project advanced after the 2015 Iran nuclear deal, with India pledging $500 million during Prime Minister Narendra Modi's 2016 visit to Tehran.

Operations began before the US withdrew from the deal in 2018.

The US granted a sanctions exemption for Chabahar in 2018 to support aid to Afghanistan under its US-backed government at the time. In September 2025, the US announced the revocation of all Iran-related exemptions, but extended Chabahar's until April 26, 2026, following Indian lobbying.

India made a $120 million payment in February 2026. Opposition parties criticized the government's handling. Pawan Khera, a spokesperson for the Indian National Congress, said the retreat from Chabahar under US pressure marked a low in foreign policy.

The Indian government did not allocate funds for the port in its 2026 annual budget.

Randhir Jaiswal, spokesperson for India's Ministry of External Affairs, stated that New Delhi is discussing the issue with Tehran and Washington. He noted the ongoing war as a complicating factor. Analysts suggest India may transfer operations to an Iranian entity to preserve future involvement.

Rajan Kumar, a professor at Jawaharlal Nehru University, said India must wait for the end of Middle East hostilities and sanctions relief. Michael Kugelman, a resident senior fellow at the Atlantic Council, described the project as a damaged asset due to recent conflicts and tensions.