Parliamentary panel flags uncertainty over Chabahar port project amid US sanctions changes, West Asia crisis

Chabahar Port

• Parliamentary panel flags uncertainty over Chabahar Port's future
• US sanctions changes impact India's Chabahar Port commitments
• India fully utilized Rs 400 crore for Chabahar Port by Jan 2026

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A parliamentary panel has flagged concerns over the outlook for Chabahar Port, noting that “recent development” has cast uncertainty over the project’s trajectory even as the government continues to engage with stakeholders to manage the fallout.

The observation appears in the ‘Twelfth Report of the Committee on External Affairs (2025-26) on Demands for Grants (2026-27)’ of the Ministry of External Affairs, tabled in Parliament on Tuesday.

The panel, chaired by Congress MP Shashi Tharoor, underlined the port’s importance, describing it as a “vital and strategic port for India” due to its role in enabling access to Afghanistan and Central Asia, as well as its linkage with the International North South Transport Corridor.

Referring to evolving geopolitical and policy shifts, the report notes that developments tied to the ongoing West Asia situation and changes in US sanctions or tariff policies have created fresh uncertainty. “Besides, the recent development has cast a shadow on the future of Chabahar Port,” the committee said.

The panel also detailed financial allocations, stating, “The Committee find that for the development of Chabahar Port, an amount of Rs 100 crore was allocated at BE (budget estimate) 2025-26, which was increased to Rs 400 crore at RE (revised estimate). The allocated amount had been fully utilised by January 2026.” However, for 2026-27, no funds have been earmarked under the same head.

According to the Ministry of External Affairs, this is because India has already met its contractual obligations. The report cites the ministry as saying “no amount has been allocated under the head during 2026-27 as India has already fulfilled its commitment of contributing USD 120 million” towards port equipment procurement under the agreement signed in 2024.

The committee also took note of US policy actions, pointing out that on September 16, 2025, the US State Department revoked the sanctions exception granted in 2018 under the Iran Freedom and Counter Proliferation Act for Afghanistan-related development. This move came into effect on September 29, 2025. The report adds that, following discussions, “the latter issued guidance extending the conditional sanctions waiver until April 26, 2026.”

While acknowledging the challenges, the panel welcomed the Centre’s continued diplomatic efforts. “The Government of India remains engaged with all concerned parties in order to address the implications of these developments,” it said, adding that it expects to be kept informed about “all the plans and progress in this regard.”

Earlier, on February 5, the government had conveyed a similar position in Parliament, reiterating that it is in touch with relevant stakeholders to navigate the impact of changes in US policy on India’s role in the Chabahar project.