By Mukesh 
The U.S. has allowed its waiver of sanctions on Iran’s Chabahar port to lapse on Sunday (April 26), indicating that India is now at a crossroads on how to proceed with the port as a key connectivity initiative. Barring a belated waiver renewal, New Delhi must choose between accepting sanctions and abandoning its $620 million investment, or proceeding with the project and risk strict U.S. sanctions. India’s “start-stop” engagement with Iran on developing a facility at the Shahid Beheshti terminal at Chabahar goes back decades, and Prime Minister A.B. Vajpayee signed an MoU for the project in 2003. However, U.S. pressure on India to postpone plans aimed at stopping Iran’s nuclear programme led to construction delays. The Manmohan Singh government was unable to make much progress either, but continued work on the Zaranj-Delaram highway to connect the Iran-Afghanistan border crossing to Kabul. After the 2015 JCPOA, Prime Minister Narendra Modi’s government signed a trilateral agreement with Iran and Afghanistan to advance trade and aid via Chabahar port and a highway into Afghanistan. Chabahar’s importance grew as ties with Pakistan deteriorated and it restricted India’s transit access to Afghanistan. However, fate intervened again as U.S. President Donald Trump walked out of the JCPOA, and began a “maximum pressure” campaign against Iran by re-implementing all sanctions. While India was forced by the U.S. to give up Iranian oil imports, and plans for the rail line, the U.S. built a “carve-out” for Chabahar, allowing India to send wheat and medical supplies to Afghanistan. That carve-out is now at an end, with the Trump administration giving Delhi until this month to “wind-down” its operations. Since November 2025, India has withdrawn personnel from Chabahar, prepaid its $120 million investment commitment, and is considering transferring its stake in the Shahid Beheshti Terminal to an Iranian company, with the option of returning later.
The West Asia war has complicated the situation, and it is unclear when, if ever, India will be able to re-engage with Iran or rebuild Chabahar after the conflict. Temporarily dropping the project may seem pragmatic. However, Chabahar is just one of several India’s independent decisions that the U.S. has thwarted; there have been diktats to stop buying oil from Iran, Venezuela, and Russia. Mr. Trump has threatened sanctions on all trade with Iran, and on BRICS grouping members; the U.S.’s seemingly insatiable demands may also extend to India’s engagement with other countries. Giving in on Chabahar will not just end India’s connectivity plans with Iran, Central Asia and Afghanistan. It will damage its claims of sovereign autonomy, and slice away its ability to pursue an independent foreign policy.