US grants India 6-month exemption from sanctions at Chabahar port
What's the story
The United States has extended the sanctions waiver for India's operations at Iran's Chabahar Port until April 2026. "We continue to remain engaged with the US side on finalizing the trade deal. Both sides are continuing to hold discussions," the Ministry of External Affairs (MEA) said on Thursday. The extension allows India Ports Global Limited (IPGL) to continue managing and developing the Shahid Behesti Terminal without immediate fear of sanctions.
Strategic importance
Strategic importance of Chabahar Port
Chabahar Port, located on Iran's southeastern coast along the Gulf of Oman, is a key port where India has operational involvement. It is about 950km from Afghanistan, making it a strategic gateway to the Indian Ocean. The port helps India bypass Pakistan's overland routes for humanitarian aid to Afghanistan and trade with Central Asia. It also gives Central Asian countries, such as Uzbekistan and Kazakhstan, direct access to the Indian Ocean.
Investment details
India's investment in Chabahar port
India has invested over $120 million in developing the Shahid Beheshti terminal under a 10-year agreement signed in May 2024. The investment includes upgrading equipment and connecting to the International North-South Transport Corridor. This corridor is a multimodal trade route linking India, Iran, Russia, and Central Asia. According to India, the port witnessed a 43% increase in vessel traffic and a 34% rise in container traffic in 2023-2024. This number is expected to rise once the port becomes fully functional.
Sanctions impact
US sanctions on Iran and Chabahar's exemption
The United States had extended the waiver until October 28, after previously setting a September 29 revocation date. The US State Department at the time said the move aligns with Washington's efforts to disrupt "illicit financial networks that sustain the Iranian regime and its military activities." As the deadline neared, New Delhi engaged in discussions with Washington to ensure continuity of the waiver, ET reported.