India is now in talks with Washington to restore sanctions exemptions for Chabahar Port. The port, situated on Iran’s southeastern coast, serves as a strategic link for trade between India, Afghanistan, and Central Asia. Without the waiver, New Delhi risks losing access to a facility it has invested heavily in since 2018.
In May 2024, India signed a 10-year agreement with Iran’s Ports and Maritime Organization to operate and develop Chabahar. As part of the deal, India pledged $120 million in funding. By August 2025, the government had fulfilled this commitment in full, according to reports.
The U.S. had granted a special exemption for Chabahar in 2018, acknowledging the port’s role in stabilizing Afghanistan’s economy and promoting regional commerce. However, Washington terminated the waiver in 2025 as it intensified sanctions against Iran under its 'maximum pressure' policy. India’s External Affairs Minister Kirti Vardhan Singh has reiterated the port’s strategic value, particularly for its economic partnerships with Afghanistan and Central Asia.
For Afghanistan, Chabahar has become increasingly vital as border disruptions with Pakistan continue to hinder trade. The World Bank has reported that growing instability on Pakistan’s trade routes is shifting Afghan commerce toward alternative pathways through Iran and Central Asia. India has been a consistent partner in this shift, managing the port through a state-owned enterprise.