Trump's order to rescind sanction waiver to cast shadow on India's role in Chabahar Port of Iran

India has already supplied port equipment worth about Rs 209 crore to develop the Chabahar Port. The process for procurement of remaining port equipment for Chabahar Port is underway.

New Delhi: India’s role in the operations of the Chabahar Port in Iran has come under a shadow as President Donald Trump’s administration in Washington DC has decided to modify or rescind the waiver the United States had earlier granted to the development of the port on the southeastern coast of the Persian Gulf nation.

Trump issued an executive order on Tuesday asking the US Secretary of State, Mark Rubio, to modify or rescind waivers to the sanctions imposed on Iran, particularly the ones, which provide the Islamic Republic of West Asia “any degree of economic or financial relief”, including those related to the Chabahar Port project.

The move comes ahead of Prime Minister Narendra Modi's visit to Washington DC for a meeting with Trump.

The move by the 47th American president may end the waiver New Delhi had secured from Washington DC during his first term in the White House to continue developing the Chabahar Port despite the US sanctions on Iran.

The port has strategic importance for New Delhi as it gives India a sea-land access to Afghanistan and Central Asia through Iran, bypassing Pakistan.

The Economic Survey 2024-25 presented in Parliament on Friday noted that the Shahid Beheshti Terminal of the Chabahar Port connected Mumbai to Eurasia via the International North-South Transport Corridor, reducing transport costs and time, leading to a 43% increase in vessel traffic and a 34 per cent rise in container traffic in FY24.

In May 2015, India and Iran signed an MoU on ‘Partnership of India in the Development Plan of Chabahar Port’. This was followed by the signing of a Trilateral Agreement in May 2016 between India, Iran and Afghanistan to establish the International Transport and Transit Corridor (Chabahar Agreement).

India is participating in the development of the first phase of the Shahid Beheshti Terminal, Chabahar Port in cooperation with the Government of the Islamic Republic of Iran.

On December 24, 2018, an Indian company, India Ports Global Limited (IPGL) through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of Chabahar Port.

On May 13, 2024, IPGL signed a ten-year contract with the Ports and Maritime Organisation (PMO) of the Islamic Republic of Iran for equipping and operating the Shahid Beheshti Terminal of Chabahar Port.

The grant assistance for the supply of equipment has been enhanced to Rs 1,047 crore ($120 million). India has also committed to provide a Line of Credit of Rs 2,182 crore ($250 million) in rupee equivalent for the development of Chabahar Port. Since 2018, the port has handled over 450 vessels, 1,34,082 TEUs (Twenty-foot Equivalent) of containerised cargo and more than 8.7 million tons of bulk and general cargo.

India has already supplied port equipment worth about Rs 209 crore ($24 million) to develop the Chabahar Port. The process for procurement of remaining port equipment for Chabahar Port is underway, the Ministry of External Affairs informed Parliament in November 2024.