India is set to divest its stake in Iran’s strategic Chabahar Port just before the expiry of a US sanctions waiver on April 26, 2026. The government has drawn up a proposal for India Ports Global Ltd (IPGL) to transfer its holding in the India Ports Global Chabahar Free Zone (IPGCFZ) to a local Iranian entity. This arrangement would allow operations to continue without exposing Indian firms to sanctions risks. Reports suggest that once restrictions ease, operational control could revert to India.
India first secured a waiver in 2018 to develop Chabahar, seen as vital for accessing Afghanistan and Central Asia while bypassing Pakistan. However, the US revoked the exemption in September 2025, later granting a temporary extension until April 2026 after India’s diplomatic efforts. New Delhi has invested nearly $120 million in port equipment and signed a 10-year agreement with Tehran in 2024 to operate the Shahid Beheshti terminal.
Chabahar remains central to India’s regional connectivity ambitions and is a key node in the International North-South Transport Corridor (INSTC), linking India to Central Asia and Russia. The port has also facilitated humanitarian aid to Afghanistan. While India’s divestment signals caution amid sanctions, it is not a complete withdrawal. The move reflects a balancing act preserving long-term strategic interests while reducing immediate legal and financial risks.
