Will India exit from Chabahar Port project as US sanctions waiver nears expiry?

India is considering divesting its stake in the strategically significant Chabahar Port as the current US sanctions waiver is set to expire this Sunday, according to a news report.

The plan involves India Ports Global Ltd selling its holding in India Ports Global Chabahar Free Zone to a local Iranian entity, Business Standard reported. The move is aimed at mitigating potential exposure to sanctions if relief is not extended.

Officials are also said to have explored an interim arrangement under which an Iranian operator would manage the port during the sanctions period, with the possibility of India resuming operational control once restrictions are eased.

India’s involvement in the project has benefited from US sanctions exemptions since 2018. However, the United States Department of State reviewed such waivers in 2025, and the original exemption was subsequently withdrawn. A later communication from the United States Department of the Treasury allowed continued activity at Chabahar until 26 April 2026.

The news report said that New Delhi has invested around $120 million in equipment for the port, which has also been used to send humanitarian aid to Afghanistan. In 2024, India signed a 10-year agreement with Iran to operate a terminal at the site after prolonged negotiations.

The port holds considerable strategic value for India, offering access to Afghanistan and Central Asia while bypassing Pakistan. It is also viewed as a counterbalance to China-backed development at Gwadar Port.

Chabahar is a key component of the International North-South Transport Corridor, a multimodal network intended to link India with Central Asia and Russia and reduce transit times for trade.

Legal and policy experts have reportedly cautioned that continued involvement without sanctions protection could expose Indian entities to financial and operational risks, potentially affecting broader overseas port ambitions.

IPGL, a wholly owned subsidiary of Sagarmala Finance Corporation, is also part of the Bharat Global Ports consortium launched in 2025 to expand India’s international port footprint. It currently operates Myanmar’s Sittwe Port as well.

If the proposed stake transfer proceeds, it could significantly reduce sanctions-related risks while preserving India’s long-term strategic interests in the region.