New Delhi: India’s long-standing partnership with Iran’s strategic Chabahar Port has come under scrutiny amid mounting pressure from the United States and growing political debate at home. India has been involved in the development of the port for nearly a decade and has committed significant financial resources to the project. However, recent warnings by US President Donald Trump to countries trading with Iran have raised concerns over India’s continued involvement.
President Trump has cautioned that nations engaging in trade with Iran could face additional tariffs of up to 25 percent. The United States is already imposing 50 percent tariffs on Indian goods, and experts warn that continued cooperation with Iran could further strain India–US trade relations. Against this backdrop, international media reports suggest that India may be considering scaling back or withdrawing from its responsibilities related to the Chabahar Port project.
These reports have triggered sharp political reactions in India. The Congress party has accused the Modi government of yielding to US pressure and compromising national interests, alleging that India’s foreign policy is being dictated by the White House. The Bharatiya Janata Party (BJP) has strongly rejected these claims. The Ministry of External Affairs (MEA) has clarified that India’s position on Chabahar remains unchanged, adding to speculation over whether New Delhi is indeed reassessing its role in the project.
Chabahar Port holds major strategic significance for India, particularly in countering the China–Pakistan partnership at Gwadar Port in Pakistan’s Balochistan region. Located on Iran’s southeastern coast, Chabahar lies just 170 kilometres from Gwadar and close to the Strait of Hormuz, a critical global energy chokepoint. The port enables India to access Afghanistan and Central Asia directly, bypassing Pakistan, and plays a key role in the International North–South Transport Corridor (INSTC).
During heightened US–Iran tensions last year, the Trump administration imposed sanctions on the Chabahar project and asked India to halt activities at the port, granting a six-month deadline. Following diplomatic engagement, the US provided a sanctions waiver, later extended until April 2026. India has already transferred approximately $120 million to Iran towards the project.
India’s total financial commitment to Chabahar stands at $370 million, comprising $120 million in direct investment and a $250 million line of credit to Iran. Discussions on the port began in 2003, with a formal agreement signed in 2015. India began port operations in December 2018 and also agreed to develop a rail link from Chabahar to Zahedan near the Afghan border to boost regional trade connectivity.
With the current sanctions exemption nearing expiry, the Indian government is seeking an extension through diplomatic channels. However, analysts note that the Trump administration’s hardline approach towards Iran reduces the likelihood of relief. Experts caution that failure to align with US sanctions could expose India to additional tariffs, potentially impacting its economy and strategic interests.