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US Sanctions on Indian Port Project in Iran Take Effect, Pressuring New Delhi

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30 Sep 2025 - 08:44 The Kabul Tribune

The Kabul Tribune (KT) — U.S. sanctions took effect Monday on India’s development of Iran’s Chabahar port, ending a rare exemption once granted to New Delhi and putting fresh pressure on a key U.S. partner in Asia, AFP reported.

The move is part of former President Donald Trump’s “maximum pressure” campaign against Tehran and comes a day after broad United Nations sanctions against Iran snapped back into force over its nuclear program.

Washington had granted an exemption in 2018 to allow India to continue work on Chabahar, billed as a vital trade route into Afghanistan that bypassed Pakistan. At the time, Kabul was still controlled by a U.S.-backed government and seen as central to regional stability.

That rationale has faded since the Taliban retook power in 2021. U.S. officials said the exemption was no longer justified. State Department spokesman Tommy Pigott said the decision was “consistent with President Trump’s maximum pressure policy to isolate the Iranian regime.”

Under U.S. law, Indian firms involved in Chabahar — including the state-run India Ports Global Limited — have 45 days to wind down operations or risk being cut off from the American financial system. Analysts warned that blacklisting an Indian entity could have a “cascading effect” on banks and global partners wary of sanctions exposure.

India has invested heavily in Chabahar, signing a 10-year, $370 million contract last year despite Afghanistan’s closure as a trade corridor. The port is considered strategically important for New Delhi because of its proximity to Pakistan and China’s nearby development of Gwadar port in Baluchistan.

Indian foreign ministry spokesman Randhir Jaiswal said New Delhi was “examining the implications” of the sanctions decision. Analysts noted that India has historically complied with U.S. sanctions, even when reluctantly halting oil imports from Iran under Trump’s earlier measures.

Still, some strategists argue that India may see value in maintaining ties with Tehran. “India may choose to wear the sanctions as part of a broader effort among non-Western great powers, including China and Russia, to reduce reliance on the U.S. economy,” said Kadira Pethiyagoda, a foreign policy analyst.