Recently, the US announced the end of the sanctions waiver related to Iran’s Chabahar Port. 

Significance of Chabahar Port

• Strategic Connectivity: The port provides a “golden ticket” for India to bypass Pakistan, facilitating trade with Afghanistan and Central Asia.
• International Integration: It forms part of the International North South Transport Corridor (INSTC), enhancing regional trade links.

About the Waiver

• US Sanctions Waiver: The US had granted India a sanctions waiver since 2018, allowing it to develop and operate Iran’s Chabahar Port.
  • This waiver was introduced after President Donald Trump unilaterally withdrew from the Iran nuclear deal and launched a “maximum pressure” campaign against Tehran.
• Impact of Termination: On September 17, 2025, the US announced the end of this sanctions waiver.
  • The termination constrains India’s freedom to fully operationalize its investment in Chabahar, presenting a setback to its strategic connectivity plans.
• India’s Investment Risk: India signed a 10-year contract in May 2024 to develop and operate the port. The ending of the waiver puts this money and India’s plan to increase connectivity to Eurasia at risk.

India’s Strategic Balance

• India is simultaneously pursuing two major and often conflicting connectivity projects:
  • Chabahar Port: Working with Iran.
  • India-Middle East-Europe Economic Corridor (IMEC): Working with the US, EU, Saudi Arabia, and Israel.
    • IMEC aims to be an alternative to the Suez Canal, routing goods from Mumbai to the UAE, Saudi Arabia, Israel, and then to Greece/Europe.
    • IMEC is also seen as a counter-initiative to China’s Belt and Road Initiative (BRI).

Shifts in West Asia Dynamics

• Israel’s Perception: Gulf countries now perceive Israel as trying to become an unchecked military power in the entire region.
• US Reliability: Recent conflicts (such as the war between Israel and Iran) have dramatically changed strategic perceptions in West Asia. West Asian nations are increasingly skeptical about relying on security guarantees provided by the US.
• New Alliances: Countries are seeking new partnerships; for example, Saudi Arabia recently signed a mutual defense agreement with Pakistan.
• Iran’s View of Rivals: Iran is not overly concerned about Saudi Arabia aligning with Pakistan, as it prefers regional issues to be resolved by regional players. Iran’s primary concern is Pakistan aligning with the US.

Iran’s View of India

• Iran’s Connectivity Focus: Iranian President emphasized linking Chabahar Port to Iran’s railway network connecting China, Central Asia, and Afghanistan to the Indian Ocean.
• India Overlooked: China was highlighted in the plan, while India, the port’s developer, was not mentioned, signaling a shift in Iran’s strategic priorities.

Way Forward

• Independent Posture: India must demonstrate an independent foreign policy posture. Currently, India is caught between teams- the US believes India favours Russia, while the Russia/China bloc distrusts India, viewing it as a US friend.
• Proactive Diplomacy: Despite the challenges, India has shown initiative by engaging in trilateral meetings with Armenia and Uzbekistan to increase trade via the Chabahar Port.

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