India to Consider Transferring Stake in Chabahar Port Amid US Sanctions Concerns

India Nears Divestment of Chabahar Port Stake Amid US Sanctions Waiver Expiry

India is preparing to divest its stake in the Chabahar Port project to an Iranian entity just days before the expiry of an extended US sanctions waiver covering its operations there. According to a Business Standard report, a proposal has been worked out for India Ports Global Ltd (IPGL) to sell its holding in India Ports Global Chabahar Free Zone (IPGCFZ) to a local Iranian entity.

The US sanctions waiver, which has been extended multiple times, is set to expire on April 26, 2026. India's activities at the strategic Iranian port remain exempt from US sanctions until then. New Delhi has been exploring an interim arrangement under which a domestic Iranian entity would manage operations while sanctions remain in place, with assurances that control would revert to India once restrictions are lifted.

The Chabahar Port project has been a point of contention between India and the US, with the latter directing the Secretary of State to revise or revoke sanctions waivers that offer Iran any form of economic or financial relief, including those tied to the Chabahar Port project, in February 2025. The US State Department later withdrew the 2018 waiver on September 29, 2025.

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Despite the challenges, India has invested close to $120 million in equipment procurement for the Chabahar project. The port has also played a key role in enabling humanitarian aid and emergency assistance to Afghanistan. India views its presence at the port as strategically significant due to its proximity to Pakistan and China-backed investments at Pakistan's Gwadar Port.

India has also signed a 10-year agreement with Iran to operate a terminal at Chabahar after prolonged negotiations in 2024. The Chabahar Port is considered a crucial gateway for the proposed International North-South Transport Corridor (INSTC), a multimodal trade route linking India with Central Asia and Russia, aimed at cutting transport time between the regions.

If the stake transfer to a local Iranian entity goes through, the associated sanctions risks could ease significantly. IPGL, which runs the India-backed Chabahar terminal, is a wholly owned subsidiary of Sagarmala Development Corporation Ltd (SDCL), now renamed Sagarmala Finance Corporation.

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