India is preparing a strategy to continue operating Iran’s Chabahar port after the United States’ sanctions waiver expires in March, reflecting New Delhi’s attempt to preserve a key geopolitical and trade asset while maintaining its relationship with Washington. Officials familiar with the discussions say India intends to remain engaged at the port, given its long-term strategic significance and its role in connecting India to Afghanistan and Central Asia while bypassing Pakistan.
India has already fulfilled its $120 million investment commitment in the Shahid Beheshti terminal and does not plan further capital infusion in the near term, citing geopolitical uncertainty. Although New Delhi has extended an additional $250 million credit line for infrastructure development, fresh spending is unlikely until tensions surrounding Iran ease. Government officials maintain that India does not intend to exit Chabahar, emphasizing that its existing commitments have been completed and that the port remains central to India’s regional connectivity ambitions.
The project took on renewed importance after India and Iran signed a 10-year contract in May 2024 under which state-run Indian Ports Global Ltd (IPGL) was tasked with operating five berths and supporting infrastructure development. Despite the approaching sanctions deadline, policymakers view Chabahar as India’s most significant overseas port venture, one that has evolved from a strategic concept into a commercially operational facility.
Chabahar’s location near Pakistan’s Gwadar Port, which is operated by China, underscores its geopolitical relevance. Indian policymakers see the Iranian port as a counterweight to Chinese and Pakistani influence in the Arabian Sea and as a gateway into landlocked markets across Central Asia. Analysts warn that an Indian withdrawal could open the door for Beijing to expand its presence in Iran, reshaping regional trade dynamics.
Operationally, the port has shown steady growth since IPGL took over the Shahid Beheshti terminal in 2018. In the financial year 2024–25, Chabahar handled more than 80,000 twenty-foot equivalent units of container traffic, up from 60,000 the previous year, along with over 1.2 million tonnes of bulk and general cargo. IPGL’s operations have also moved into profitability, recording an estimated ₹16 crore profit in FY24 after earlier losses.
However, uncertainty linked to US sanctions has already had an impact on governance. Members of IPGL’s board have reportedly resigned amid concerns that US Office of Foreign Assets Control provisions could expose individuals to personal liability. The development highlights the complex legal and diplomatic environment surrounding continued operations at the Iranian facility.
India has been among Iran’s top trading partners in recent years, exporting commodities such as rice, tea, sugar, pharmaceuticals, and machinery while importing dry fruits, chemicals, and glassware. Experts note that India has historically argued to successive US administrations that Chabahar serves a broader regional public good by facilitating trade and development in Afghanistan and Central Asia.
Looking ahead, Iran plans a major expansion of the port, including new cranes, yard enlargement, and terminal automation to raise container capacity to 500,000 TEUs annually. The facility is also being integrated with road and rail links through Zahedan, positioning it as a key node in the International North-South Transport Corridor connecting India with Eurasia. Iranian authorities envision developing Chabahar into a 32-berth complex with capacity of 100 million tonnes per year across container, multipurpose, oil, and dry bulk terminals.
Even as sanctions uncertainty clouds immediate investment prospects, both India and Iran continue to frame Chabahar as a symbol of bilateral cooperation and a cornerstone of regional connectivity, suggesting that New Delhi is prepared to navigate geopolitical crosscurrents to retain its foothold at the strategically vital port.
