Chabahar Port Project Faces Renewed Challenges Amid Geopolitical Tensions

India's strategic connectivity project centred on Iran's Chabahar Port is once again facing significant challenges due to escalating regional geopolitical tensions and the expiry of the US sanctions waiver. These developments have created uncertainty over the future of the project, although India has reaffirmed its long-term commitment to the development and operation of Chabahar Port.

What is Chabahar Port?

¨     Chabahar Port is located on Iran's southeastern coast along the Gulf of Oman.

¨     It is Iran's only deep-sea oceanic port.

¨     India is a key partner in its development and operation.

¨     The port serves as a vital trade and connectivity hub linking India, Iran, and Afghanistan.

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¨     Recent US airstrikes in Iran reportedly damaged areas near the Chabahar Free Trade Zone, raising concerns over the security of India’s strategic connectivity project.

¨     However, India has clarified that the Shahid Beheshti Terminal, operated by India Ports Global Limited (IPGL), was not damaged and continues to function normally.

¨     The US sanctions waiver, originally granted in 2018 to facilitate Afghanistan’s economic development, was withdrawn in September 2025, restored through a six-month exemption, and expired in April 2026, renewing uncertainty over India’s operations at Chabahar.

¨     These developments underscore the growing impact of regional geopolitical tensions on connectivity initiatives linking South Asia with Central Asia and Eurasia.

About Chabahar Port

¨     Strategic Location: Chabahar is Iran’s only oceanic deep-water port, located in Sistan-Baluchestan Province on the Gulf of Oman, outside the Strait of Hormuz.

¨     Port Structure: The port comprises Shahid Beheshti and Shahid Kalantari terminals, with India Ports Global Limited (IPGL) operating the Shahid Beheshti Terminal.

¨     India’s Engagement: India has been developing Chabahar since 2003. In May 2024, India and Iran signed a 10-year agreement enabling IPGL to equip and operate the Shahid Beheshti Terminal—India’s longest overseas port management contract.

¨     Institutional Framework: The India-Iran-Afghanistan Trilateral Agreement (2016) provides the framework for developing Chabahar as a regional trade and transit hub.

¨     Indian Investment: India has committed US$120 million for equipping and upgrading the terminal and extended a US$250 million line of credit for related infrastructure projects.

¨     Regional Connectivity Hub: Chabahar provides India direct access to Afghanistan, Central Asia and Eurasia, bypassing Pakistan, and serves as a key maritime node of the International North-South Transport Corridor (INSTC).

Importance of Chabahar for India

¨     Bypasses Pakistan: Provides India direct access to Afghanistan and Central Asia without relying on Pakistani territory, enhancing India’s strategic autonomy.