US withdraws sanctions waiver to Chabahar port

The United States has announced the revocation of a sanctions exception granted in 2018 for Afghanistan reconstruction projects involving Iran, a move that could put India’s strategic investments in the Chabahar Port at risk. The revocation will take effect from September 29, according to the US State Department.

Implications of the Decision

• Once effective, individuals or entities operating the Chabahar Port or engaging in activities listed under the Iran Freedom and Counter-Proliferation Act (IFCA) could be exposed to US sanctions.
• This threatens India’s role in managing the port and its broader connectivity projects linking to Afghanistan and Central Asia.

India’s Long-Term Agreement with Iran

• In May 2024, India signed a 10-year agreement with Iran to operate and manage the Chabahar Port.
• The pact was inked between Indian Ports Global Ltd (IPGL) and Iran’s Port and Maritime Organisation (PMO).
• India committed $120 million in investment, with an additional $250 million to be raised as debt.
• This replaced the 2016 agreement, under which India had operated the Shahid Beheshti terminal on an annual renewal basis.

Rising Cargo Volumes at Chabahar

• Cargo handling at Chabahar has been steadily increasing.
• In FY25, the port handled:
  • 80,000 TEUs (twenty-foot equivalent units) of container cargo.
  • 3 million tonnes (mt) of bulk cargo, as per government data.

Strategic Importance

Located near Iran’s south-eastern border with Pakistan, Chabahar Port is crucial for India’s plans to bypass Pakistan and secure direct trade routes with Afghanistan and Central Asia.

(Source: BL)