September 24, 2025

Boom! The Trump regime dropped a bombshell last week by ending the sanctions exemption for the super-strategic Chabahar Port in Iran. Originally given in 2018, this special permission was like a green signal for India to invest and develop the port to boost trade and strategic ties with Eurasia. But from September 29 onwards, Indian companies and people working at Chabahar could face tough US sanctions under the Iran Freedom and Counter-Proliferation Act. Since 2018, India has been busy building Chabahar. In May 2024, India Ports Global Ltd (IPGL) signed a big 10-year deal with Iran’s Ports and Maritime Organisation to run the Shahid Beheshti terminal. Why is Chabahar such a hot prize? Because it’s the shortest, fastest route from India to the landlocked Central Asian Republics (CARs) and Afghanistan. It’s like a golden gateway to the Indian Ocean for these countries. This sanction move could seriously slow down India’s grand regional plans like the International North-South Transport Corridor (INSTC). The waiver’s removal might also slam the door on India’s access to Central Asia’s rich hydrocarbons and rare earth minerals vital for clean energy and defense. For example, Kazakhstan holds over 5,000 rare earth deposits worth more than $46 trillion, but most exports now go to China. India desperately needs new, reliable trade routes and supply chains. Chabahar is special because it sits beyond the dreaded Strait of Hormuz, a major hotspot in the Indian Ocean. This means trade won’t stop even if conflicts flare up in the Gulf. The port is also just 550 nautical miles from Gujarat’s Mundra and Kandla ports and 780 nautical miles from Mumbai’s JNPT port. But wait, there’s more! Chabahar is India’s shield against China’s rising power in Eurasia and the Indian Ocean. Since 1991, China has pulled the Central Asian Republics deep into its economic and political web. To fight back, India kicked off the India-Central Asia dialogue in 2019, with many CARs showing sharp interest in projects like Chabahar. In 2022, the first India-Central Asia virtual summit stressed Chabahar’s role within the INSTC. A working group on Chabahar was also formed. Once hooked to INSTC, India gains direct access to Central Asia’s riches through the 928-km Kazakhstan-Turkmenistan-Iran railway east of the Caspian Sea, a vital corridor since 2014. China isn’t sitting idle. It has built 38 ports globally and owns stakes in 78 more, with 43 upcoming in its Belt and Road Initiative zones. Ports like Gwadar in Pakistan, just 170 km from Chabahar, are part of Beijing’s 'string of pearls' strategy. Gwadar, controlled by China since 2013, is at the heart of the China-Pakistan Economic Corridor and ignores India’s security concerns, especially in disputed areas like POK. In the end, the Chabahar tale is more than just a port story. It’s a spicy mix of major powers locking horns over crucial trade corridors. The big question is—will fierce rivalries choke these lifelines, or can smart cooperation light the way for peace, security, and growth across this vibrant region? (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Tags: Chabahar port, India-iran relations, Us sanctions, Central asia, China influence, Regional connectivity,