US revokes Chabahar Port waiver, sanctions apply from Sept 29: What it means for India | Explained

A picture taken on February 25, 2019 shows workers resting at the Shahid Beheshti Port in the southeastern Iranian coastal city of Chabahar, on the Gulf of Oman. (Photo by ATTA KENARE / AFP)

The United States has ended the special sanctions waiver for Iran’s Chabahar Port, which may place India’s flagship connectivity project under unprecedented strain. From September 29, 2025, anyone involved in operating, financing or servicing the port will face the same Treasury restrictions as other Iranian entities, according to a press note by the US Department of State.

"The United States remains committed to disrupting illicit funding streams financing Iran's malign activities. As long as Iran devotes its illicit revenues to funding attacks on the United States and our allies, supporting terrorism around the world, and pursuing other destabilizing actions, we will continue to use all the tools at our disposal to hold the regime accountable," the statement from the US State Department stated.

“Consistent with President Trump’s maximum pressure policy to isolate the Iranian regime, the Secretary of State has revoked the sanctions exception issued in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction assistance and economic development, effective September 29, 2025. Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions under IFCA,” the press note read further.

The order is part of US President Donald Trump’s February 2025 National Security Presidential Memorandum on “maximum economic pressure” against Tehran. The US has revoked the 2018 sanctions exception granted under the Iran Freedom and Counter-Proliferation Act (IFCA) for Afghanistan reconstruction assistance and economic development

Back then, India had reaffirmed its commitment to the strategic port in Iran. The Ministry of External Affairs (MEA) had stated that the port has proven its importance in enhancing connectivity to Afghanistan and Central Asia, bypassing Pakistan.

Chabahar has been the centrepiece of India’s plans to reach Afghanistan and Central Asia by bypassing Pakistan. The end of the waiver exposes Indian entities to possible financial and legal penalties and creates new uncertainty for one of New Delhi’s most strategically important projects.

Officials in Washington argue that the circumstances underpinning the waiver have changed. When it was first granted, Afghanistan had an elected government and Chabahar was seen as a gateway for food aid and reconstruction materials. Since the Taliban takeover in 2021 and India’s own announcement of a 10-year agreement to expand the port and link it to the International North-South Transport Corridor, US officials have warned that the project could give Iran new commercial lifelines.