Chabahar Port: Port of contention Today World News

U.S. President Donald Trump has taken aim at many countries around the world in the first few weeks of his presidency — with Iran being perhaps the most predictable target, much as it was during his first tenure. So, while it came as no surprise when he issued a Presidential National Security Memorandum (PNSM-2) on February 4, calling for “maximum pressure” on Iran, as what he called the “world’s leading state sponsor of terror”, his decision to name the Chabahar Port in particular sent shock-waves through New Delhi.

Chabahar’s Shahid Beheshti port terminal is after all India’s first international port, its alternative trade route to Iran, Afghanistan, Central Asia and beyond, and part of its plans for regional leadership. So why does the tiny warm-water port in the Gulf of Oman, that does relatively little trade with the world compared to Iran’s main Bandar Abbas port, merit a special mention in Mr. Trump’s memo, and where could this lead?

The original plan for a greater role for Chabahar in international trade was conceived more than 50 years ago, but it was only in the past two decades that the port’s profile has actually grown, after India had an interest in developing a terminal for trade to bypass Pakistan’s land route and Karachi port route. Chabahar not only provides a quick sea route from India’s west coast, but the plan fits in with India’s development assistance to the Afghan republic, especially through the construction of the Zaranj-Delaram highway in 2009, that could take Indian goods around the country.

In time, India could develop Chabahar as a counter to Pakistan’s Gwadar port, that is funded by China. In recent years China showed its interest in Chabahar as well, as a part of its Belt and Road Initiative and signed a 25-year cooperation agreement in 2021 with a potential investment of $300 billion.

Between 2010 and 2015, the U.S. encouraged India to increase energy contracts with Iran, to build up the Shahid Beheshti terminal at Chabahar and even to invest in a rail line connecting Chabahar to the Afghan border — as it wanted to use this as leverage in its high-stakes negotiations for the 6-nation Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear capabilities. In line with that, Prime Minister Narendra Modi signed a trilateral agreement with Iran and Afghanistan for the development of Chabahar in 2016. The thinking for the U.S. administration, for a short period of time, was that Indian investment would give Iran incentives to join the international mainstream with the JCPOA signed.

Trump’s arrival

But the best-laid plans are often derailed by geopolitics. By the time Donald Trump was elected in November 2016, the U.S.’s relations with Iran had soured, and Mr. Trump walked out of the JCPOA, enforcing sanctions on any country importing oil or trading with Iran. India submitted to the sanctions on oil, stopping its imports of cheaper Iranian crude in 2018, but it lobbied hard to keep its stake in Chabahar alive.

Addition of waivers

Eventually, In November 2018, the Trump administration decided to add waivers to the U.S.’s Iran Freedom and Counter-Proliferation Act (IFCA 144(f)), stipulating that all consignments through Iranian ports were subject to sanctions, except those meant for humanitarian aid for Iran (agricultural commodities, food, medicine, or medical devices ), and for Afghanistan reconstruction. The waiver was welcomed by New Delhi, and it spurred a new round of interest in building up Chabahar, although Iran dropped India from the railway project given India’s delays in providing equipment due to other sanctions.

Over the next few years, India’s trade and aid through Chabahar grew. From 2018-2024, when an IGPL subsidiary took over operations at Chabahar, the terminal handled more than 90,000 TEUs of container traffic and 2.5 million tonnes of wheat and other aid for Afghanistan, and supplied 40,000 litres of pesticide for Iran. While the collapse of the Ghani government and the takeover by the Taliban reduced the U.S.’s engagement, India has tried to forge ties with the Taliban leadership through the supply of aid.

India also provided equipment worth $25 million dollars, including six mobile harbour cranes, and developed the terminal at Chabahar during this time, albeit at a slower pace than Iran had hoped. In May 2024, even as India was in the throes of an election campaign, the Modi government sent Shipping Minister Sarbananda Sonowal to Tehran to sign a 10-year contract for Chabahar to invest approximately $120 million in equipment for the port and a credit window of $250 million. External Affairs Minister S. Jaishankar extolled the agreement, indicating India wanted to connect its Chabahar port to the International North-South Transport Corridor (INSTC) so as to trade with Central Asia and Russia. Reminding India of the Afghanistan aid stipulation, the Biden Administration said the plans carried the “risk of sanctions”, but did not move on the implicit threat. Mr. Trump’s latest memo brings the risk back into focus., as it orders U.S. Secretary of State Marco Rubio to “modify or rescind sanctions waivers, particularly those that provide Iran any degree of economic or financial relief, including those related to Iran’s Chabahar port project.”

Given that the order came just days ahead of Prime Minister Narendra Modi’s U.S. visit, South Block officials hope they can once again negotiate for an exception for India’s plans for Chabahar port. The question is what kind of bargain Mr. Trump wants to strike, now that Chabahar is once again in U.S. cross-hairs.