Copyright © HT Digital Streams Limit all rights reserved. How Trump’s withdrawal of Chabahar Port Port Sanction -Wizzing India’s local ambitions in the risk of Chabahar port, is located on the southeastern coast of Iran along the Gulf of Oman, is India’s most important maritime gate to Afghanistan and Central Asia. (AFP) Summary The recent recall of US sanctions for Chabahar Port poses important challenges for India’s trading strategy and regional ambitions. While Indian officials are assessing the implications, the country can seek alternative financing solutions, while strengthening ties with Iran and Afghanistan. New -Delhi: The US effort to recall the sanctions for the Chabahar port in Iran has brought uncertainty about the regional strategy of India. The waiver allowed Indian firms to operate the port free of US curbs, which enabled New -Delhi to pursue access to Afghanistan and Central Asia as he bypassed Pakistan. Its withdrawal now cloud the prospects for trade continuity, connectivity and India’s greater strategic ambitions. What is the problem? Chabahar Port, located on the southeastern coast of Iran along the Gulf of Oman, is the most important maritime gate of India to Afghanistan and Central Asia. In 2018, the US released Indian entities in terms of the Iran Freedom and Anti-Distribution Act (IFCA), through which they could invest the port and without the threat of US curb. On September 16, the US announced that it will recall this September 29 waiver. This move exposes Indian companies that work at Chabahar on potential sanctions, which may include the freezing of assets or restrictions on their access to the US financial system. It also complicates international financing, insurance and trade facilitation linked to the port. The US State Department said in a statement that persons who operate the Chabahar port on September 29 and participate in other related activities will face sanctions under the IFCA. Why is Chabahar Port important to India? Chabahar is central to India’s regional connection ambitions, and offers a direct trade route to Afghanistan and further to Central Asia. India’s investment has progressed in phases, starting with a $ 85 million promise for the equipment of the Shahid Beheshti terminal, of which about $ 24 million has been delivered. In May 2024, a ten-year contract committed $ 120 million for further terminal equipment and a $ 250 million credit line for related infrastructure, with total commitments to about $ 370 million, focusing on dealing with containers, cargo and logistics facilities. Strategically, Chabahar also serves as a counterweight for Gwadar harbor in China in neighboring Pakistan, which is part of the China-Pakistan Economic Corridor (CPEC). For India, it is not just a trade connection, but a geopolitical leverage to deepen involvement with Iran, Afghanistan and Central Asia. How would the US affect trade and regional connectivity? The recall of the waiver sets operational and financial risks. Indian firms may now experience delays in freight movement due to compliance controls and bank restrictions. Projects already underway can be delayed, which affects the shipment of essential commodities, construction materials and other goods intended for Afghanistan and Central Asia. While the Indian government has indicated that it is investigating the full implications, businesses fear disruptions in supply chains. Freight insurance can become more expensive, and foreign investors can hesitate to participate in port-linked businesses. The move will also have an impact on the India-Middle East-European Economic Corridor (IMEC), which was announced during the 2023 G20 Summit in New Delhi as a multimodal passage connecting India’s West Coast ports, and by tracking Saudi Arabia and Jordan, the Haifa port of Israel, with the Haifa port of Israel. The IMC, designed to compete the belt and road from China, can reduce transport times to Europe by up to 40% compared to the Suez channel route, which provides significant savings in shipping and energy transport. The US decision limits India’s ability to integrate Chabahar as a pivot that connects Central Asia and Europe through the International Northern Southern Corridor (INSTC). Without Chabahar, the reach of the IMEC can remain more wave-centric, reducing its potential as a seamless Eurasian trading route. What are India’s alternatives to Chabahar Port? India has investigated several alternatives to Chabahar to maintain access to Afghanistan and Central Asia, but no one offers the same efficiency or strategic leverage. Air freight routes by Iran or Central Asia offer connectivity, but are too expensive for bulk shipping. Iran’s Bandar Abbas Port is operational, but fails to bypass Pakistan, which limits its value for India’s strategic calculation. Trace links by Uzbekistan or Turkmenistan can deepen regional trade tires, but they still need significant infrastructure investment and are slower. A sea-country option via Oman, which includes shipping to Omani ports, followed by overland transport, adds both costs and transport time. Compared to these routes, Chabahar stands out as the most practical and strategically beneficial gate for India’s regional ambitions. What are India’s options? India may try diplomatic involvement with the US to seek a reconsideration or negotiate a new release. Parallelly, it can look at alternative resources, including multilateral development banks or regional partners, to protect its investment from US sanctions. The strengthening of ties with Iran and Afghanistan remains crucial to keeping the project in effect. The Foreign Ministry said on Friday that this is carefully assessing the implications for India. “We have seen the US press release regarding the recall of the waiver of the sanctions for Chabahar Port. We are currently investigating its implications for India,” Mea spokesman Randhir Jaiswal said. Will it complicate India-American ties? India confronts several challenges in its relationship with the US outside Chabahar. The Trump administration has set an annual fee of $ 100,000 for new H-1B visa applications, which raises concerns for Indian professionals and IT firms dependent on the US market. Trading tensions have increased after the US imposed a 50% rate on Indian exports in August 2025, citing India’s continued imports of Russian oil, which led to falling consignments and economic pressure on sectors such as chemicals, metals, pharmaceutical products and agriculture. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #trade #donald Trump #india American Trading Tires #Mint-Explainer Read Next Story
How Trump’s Chabahar Port Move India’s regional ambitions jeopardize
