India is actively exploring various strategies to retain its presence at the Chabahar port in Iran, a critical facility for New Delhi’s regional connectivity and trade ambitions, amid mounting pressure from the United States on Tehran. The port, located on the Gulf of Oman, is central to India’s trade routes to Afghanistan, Central Asia, and Russia, and forms a key segment of the International North-South Transport Corridor (INSTC), a 7,200-km network aimed at connecting India with Europe efficiently.

A six-month exemption from US sanctions for operations at Chabahar, granted by the Trump administration in 2025, is currently valid until April 26, 2026. Indian officials are working on measures to reduce the exposure of government entities and personnel to potential sanctions while ensuring continuity in port development. Multiple sources familiar with the matter have confirmed that New Delhi remains engaged with Washington to navigate the complex sanctions landscape.

At a recent weekly media briefing, External Affairs Ministry spokesperson Randhir Jaiswal reiterated India’s ongoing engagement with the US on the Chabahar issue. “As you are aware, on October 28, 2025, the US Department of the Treasury had issued guidance on the conditional sanctions waiver, valid till April 26, 2026,” he said, responding to questions about India’s reported plans to wind down involvement at the port. Jaiswal emphasized that India continues discussions with the US to work out an arrangement that protects its strategic interests.

Steps Taken by India to Reduce Exposure

India has already implemented several measures to shield its operations from US sanctions. All Indian government officials serving on the board of India Ports Global Ltd (IPGL), the state-owned entity managing the Shahid Beheshti terminal at Chabahar, have resigned. This move is part of broader efforts to minimize the personal and institutional risk of punitive action by the US.

Under a 10-year agreement signed in May 2024, India committed $120 million toward developing the port, focusing on equipping Shahid Beheshti terminal with critical infrastructure such as mobile harbor cranes, rail-mounted quay cranes, forklifts, and pneumatic unloaders. The Indian side has delivered on this financial commitment, ensuring continued development even as diplomatic and regulatory pressures mount.

Officials are reportedly considering the creation of a new operational entity that would either be insulated from US sanctions or capable of withstanding them. This approach would allow India to maintain a presence at the terminal while mitigating potential legal and financial risks to its personnel and government institutions.

Strategic Importance of Chabahar Port

Chabahar port is central to India’s regional connectivity strategy, offering a maritime route that bypasses Pakistan and enhances trade with Afghanistan, Central Asia, and Russia. It also plays a diplomatic role, reinforcing India-Iran relations and providing leverage in multilateral forums. Iran has consistently supported India on sensitive issues, including Kashmir, making the port a symbol of strategic collaboration between the two countries.

India’s continued presence is crucial not only for logistics and trade but also for sustaining long-term engagement with Tehran. The port has been instrumental in facilitating the movement of goods along the INSTC, offering a faster and more secure alternative to traditional sea routes via the Suez Canal and the Arabian Sea.

US Pressure and Sanctions Concerns

The Trump administration has intensified its pressure on Iran in the wake of Tehran’s suppression of nationwide protests, warning that countries trading with Iran could face a 25% tariff. Indian authorities have downplayed the potential impact, noting that India-Iran trade accounted for only $1.68 billion in 2024-25, roughly 0.15% of India’s total trade volume.

Despite assurances from Indian authorities, there is continued uncertainty over the precise implications of the US threat. The 25% tariff has so far been announced only via social media posts by Trump, without formal notification or executive orders. India already contends with 50% tariffs on certain exports, including a 25% levy on purchases of Russian oil, adding to the complexity of navigating international trade regulations.

Next Steps and Diplomatic Engagement

New Delhi has approximately four months to secure arrangements before the current US sanctions exemption expires. Indian officials are intensively engaged with Washington to ensure that its participation at Chabahar is not jeopardized. While details of the discussions remain confidential, the focus is reportedly on ensuring that government entities and officials remain insulated from punitive measures, while allowing continued development and operation of the port.

The Indian government is considering a multi-pronged approach, including operational restructuring, financial safeguards, and diplomatic engagement, to protect its strategic and economic interests. Maintaining a presence at Chabahar is also essential for long-term geopolitical and trade objectives, particularly given India’s aspirations to enhance regional connectivity and reduce dependence on routes that pass through Pakistan.

Conclusion

The situation at Chabahar highlights the delicate balance India must maintain between strategic infrastructure development and compliance with international sanctions regimes. The port is not only a gateway for trade but also a symbol of India-Iran collaboration in the face of regional geopolitical complexities.

With the US sanctions exemption set to expire in April 2026, India’s diplomatic and administrative strategies in the coming months will be crucial in determining the future of its presence at Chabahar. The government’s efforts aim to protect both personnel and state-run entities while ensuring that the port continues to serve as a vital hub for regional trade, connectivity, and strategic engagement with Iran and beyond.