Will US Sanctions Derail India’s Chabahar Port Plans? MEA Clarifies
India has denied reports of withdrawing from Iran’s Chabahar port project amid US sanctions concerns. The MEA said New Delhi is in talks with Washington to address risks under CAATSA, stressing the port’s strategic and humanitarian importance for regional connectivity.
New Delhi, January 16: Amid speculation over possible US sanctions, India has categorically denied any move to withdraw from the strategically vital Chabahar port project in Iran. Responding to concerns, the Ministry of External Affairs (MEA) said New Delhi remains fully committed to the project and is in active discussions with Washington to address sanction-related risks.
MEA Clarifies India’s Stand on Chabahar
The MEA stated that India is engaged with the United States over the implications of the Countering America’s Adversaries Through Sanctions Act (CAATSA), after US officials warned of potential sanctions on entities doing business with Iran. Officials stressed that the Chabahar project has long enjoyed special consideration due to its humanitarian and regional connectivity role, particularly for Afghanistan and Central Asia. US Imposes 25% Tariffs Over Trading With Iran: What It Means for India As New Delhi Among Tehran’s Top 5 Trade Partners.
“There is no question of India stepping back,” sources indicated, adding that diplomatic and legal options, including the possibility of a waiver, are being explored.
Why the 10-Year Chabahar Deal Matters
The long-term agreement between India Ports Global Limited and Iran’s port authority replaces earlier short-term arrangements that limited investment. Under the deal, India will invest about USD 120 million in port infrastructure, along with a USD 250 million line of credit for related development. ‘Leave Iran Immediately’: India Issues Urgent Advisory for Nationals in Tehran to Exit by Any Available Means Amid Escalating Protests.
Strategically, Chabahar strengthens India’s access to Afghanistan and Central Asia while serving as a counterbalance to China-backed Gwadar port in Pakistan under the China-Pakistan Economic Corridor (CPEC).
Managing Sanctions Risk
To safeguard Indian interests, New Delhi is examining alternative payment mechanisms such as rupee-rial trade and the use of banks with limited exposure to the U.S. financial system. Legal safeguards are also being reviewed to protect Indian firms from secondary sanctions.
Long-Term Strategic Vision
India’s engagement with Chabahar dates back over two decades and is closely linked to the International North-South Transport Corridor (INSTC). Despite geopolitical headwinds, officials maintain that an Indian-operated Chabahar port supports regional stability and offers a viable alternative to Chinese-led infrastructure.
India has not withdrawn from Chabahar. The MEA has made it clear that talks with the US are ongoing, and New Delhi is determined to protect its long-term strategic and economic interests at the Iranian port.
(The above story first appeared on LatestLY on Jan 16, 2026 10:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).