Trump’s sanctions stir Iran's Chabahar controversy: Was India forced to retreat? What’s at stake after US’ intervention?

Ever since the United States has threatened to intervene in the violence and crackdown on protestors in Iran, it has reportedly dragged India in the issue as some reports suggest that it has pressured India to “withdraw” from Iran's Chabahar port. This has led to a political showdown at home. According to a report in a prominent financial newspaper on Thursday, January 15, “India’s decade-old, turbulent involvement in developing Iran’s Chabahar port has collapsed after US President Donald Trump said on January 12 that any country doing business with the Persian Gulf nation will face a 25% tariff on any and all business being done with the USA.” 

Responding to the reports, the Congress has allegedly accused “Prime Minister Narendra Modi” of “surrendering to US President Donald Trump, compromising a key national interest.” The BJP strongly responded by calling the accusation “pure fiction” and in turn accused the Congress of peddling lies. The ruling party referenced a video from the spokesperson of the Ministry of External Affairs (MEA), Randhir Jaiswal, to clear the government’s standing on the matter. 

A day after such a report was published, the MEA clearly stated that India has not stopped its operations at Chabahar due to a valid US sanctions waiver till April 26, 2026. The MEA further said that the country is in continuous contact with Washington DC to further grow and operationalise the arrangement. 

Experts, however, have challenged both the idea of an “exit” and the rationale behind sanctioning a project that weakens China–Pakistan’s strategic advantage by serving as a counter to Gwadar Port in Balochistan. Was India compelled to pull out of Chabahar? And if so, how significant would the setback be? 

What’s all about Iran’s Chabahar port? 

The news around India’s Chabahar port project made rounds after a report in The Economic Times according to which India was likely considering a strategic withdrawal after US sanctions pressure on Iran strengthened. January’s US sanctions on entities engaged in trade with Iran have once again raised questions over India’s Chabahar port investments.  

The report says that the US had earlier imposed sanctions on India’s Chabahar project from September 2025. But it has not taken any action against India as has given it time to wrap all its operations from there in the next six months.  

“To be sure, the United States crippled India's strategic play by reimposing sanctions on the port from September 29, 2025,” the ET report said. It also said that the fresh sanctions waiver for Iran’s Chabahar will be expired in April 2026. The news report said the sanctions has put a question on India's long-term operations at the Chabahar port.  

How will India profit from Chabahar port? 

Due to US’ long-time sanctions on Iran, India had to carefully operate at Chabahar port, located in southeastern Iran's Sistan-Baluchestan province. The report put India into spotlight at a time when the US has put its focus on Iran. This has led to discussions over whether India may have to forcibly withdraw its operations there.  

What makes Chabahar important for India? 

-It is located just outside the Strait of Hormuz, which is a crucial global energy bottleneck. 

-For India, the port is highly strategically useful as it offers a direct maritime route to Afghanistan and Central Asia, without going through Pakistan.  

-It is also a key node in the International North–South Transport Corridor (INSTC), which links Mumbai to Russia and Europe via Iran. 

-The port is strategic from a regional point of view as well as it lies just 170 km away from Gwadar in Pakistan, part of China’s Belt and Road Initiative.  

-For this reason, Chabahar has long been viewed as India’s defence against China-Pakistan axis in the Arabian Sea and the western Indian Ocean.