Officials say they are discussing a possible transfer of IPGL-subsidiary’s stake to local Iranian company temporarily to avoid sanctions
As the U.S. sanctions waiver for Iran’s Chabahar port ends on Sunday (April 26, 2026), the government faces a major test in strategic autonomy, as it may have to choose between exiting the 23-year-old port project or facing American sanctions.
Officials of the Ministry of External Affairs (MEA) have been holding talks with U.S. counterparts on the issue since October 2025, when Washington extended the waiver for six months until April 26, 2026, to give India time to “wind down” the project. Given the U.S.-Iran war and a series of U.S. measures targeting Iran under the U.S. Treasury’s “Operation Economic Fury”, officials said they were not hopeful of another extension.
On Friday (April 24, 2026), U.S. Treasury Secretary Scott Bessent made it clear that Washington would not extend the waiver of sanctions on the purchase of Iranian oil, that expired on April 19.
“Not the Iranian [sanctions],” Mr. Bessent said, according to The Associated Press. “We have the blockade, and there’s no oil coming out.” “And we think in the next two, three days, they’re going to have to start shuttering production, which will be very bad for their wells,” he said, outlining the U.S. strategy to squeeze Iran’s heavily sanctioned economy further.
As a result, the government has been exploring a number of other options to minimise its exposure to American sanctions. Since November 2025, the government has withdrawn all its personnel from Chabahar, prepaid its investment commitment of $120 million, and is now considering transferring its stake in the Shahid Beheshti Terminal at Chabahar to an Iranian company, leaving the option of returning at a later date.
Transfer of stake
On Saturday (April 25, 2026), an official confirmed that the transfer of the stake owned by India Ports Global Chabahar Free Zone (IPGCFZ), a wholly-owned subsidiary of India Ports Global Limited (IPGL), to a local company was under discussion, but had not been effected yet.
Speaking to The Hindu, former Ambassador to Iran Gaddam Dharmendra called the plan to transfer India’s stake a “tactical work-around”, given “increasingly difficult and chaotic U.S. decisions” impacting India-Iran ties.
“In enlisting a local partner, [India is] not actually exiting a strategic project but safeguarding India’s interests on a project of tremendous long-term importance. It’s equally important that the Iranians should know that we remain vested in this critical bilateral project,” he added, pointing out that India’s other regional infrastructure project IMEC (India-Middle East-Europe Economic Corridor) is also unlikely to “take shape any time soon”, given the fractures within the Gulf countries, enhancing Chabahar’s importance.
Although the original Chabahar port agreement between India and Iran was signed in 2003, U.S. sanctions have consistently slowed down progress on the major connectivity project from India through Iran to Afghanistan and Central Asia, while circumventing transit hurdles from Pakistan.
In 2016, Prime Minister Narendra Modi travelled to Tehran and signed a trilateral agreement between India, Iran and Afghanistan to operationalise the Chabahar route with ambitions to develop the port, as well as a road project and railway line from Chabahar-Zahedan over the Afghan border.
In 2018, the U.S. agreed to a “carve-out” exception for India to use the route to send food and aid to Afghanistan, but subsequently changed policy, mounting pressure on India to curtail ties with Iran, including oil imports, trade, and the Chabahar port.
In 2019, the U.S. introduced sanctions to curb steel trade as well, which disrupted India’s plans to provide rolling stock (coaches), tracks, switching and signalling equipment, and after several delays, Iran dropped India from the railway project. In May 2024, the government tried to re-energise the project, signing a 10-year agreement with the Iranian government to develop the port.
However, on February 4, 2025, within days of taking office, U.S. President Donald Trump issued the National Security Presidential Memorandum (NSPM-2) that mandated the U.S. Secretary of State 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”.
The order made it clear, long before the war in West Asia began, that Washington expected New Delhi to shut down its involvement in the Chabahar project, which was decades in the making, and is now at a dead end.
U.S. sanctions waiver on Chabahar port ends on April 26, could signal end of 23-year-old connectivity project
Officials say they are discussing a possible transfer of IPGL-subsidiary’s stake to local Iranian company temporarily to avoid sanctions
As the U.S. sanctions waiver for Iran’s Chabahar port ends on Sunday (April 26, 2026), the government faces a major test in strategic autonomy, as it may have to choose between exiting the 23-year-old port project or facing American sanctions.
Officials of the Ministry of External Affairs (MEA) have been holding talks with U.S. counterparts on the issue since October 2025, when Washington extended the waiver for six months until April 26, 2026, to give India time to “wind down” the project. Given the U.S.-Iran war and a series of U.S. measures targeting Iran under the U.S. Treasury’s “Operation Economic Fury”, officials said they were not hopeful of another extension.
On Friday (April 24, 2026), U.S. Treasury Secretary Scott Bessent made it clear that Washington would not extend the waiver of sanctions on the purchase of Iranian oil, that expired on April 19.
“Not the Iranian [sanctions],” Mr. Bessent said, according to The Associated Press. “We have the blockade, and there’s no oil coming out.” “And we think in the next two, three days, they’re going to have to start shuttering production, which will be very bad for their wells,” he said, outlining the U.S. strategy to squeeze Iran’s heavily sanctioned economy further.
As a result, the government has been exploring a number of other options to minimise its exposure to American sanctions. Since November 2025, the government has withdrawn all its personnel from Chabahar, prepaid its investment commitment of $120 million, and is now considering transferring its stake in the Shahid Beheshti Terminal at Chabahar to an Iranian company, leaving the option of returning at a later date.
Transfer of stake
On Saturday (April 25, 2026), an official confirmed that the transfer of the stake owned by India Ports Global Chabahar Free Zone (IPGCFZ), a wholly-owned subsidiary of India Ports Global Limited (IPGL), to a local company was under discussion, but had not been effected yet.
Speaking to The Hindu, former Ambassador to Iran Gaddam Dharmendra called the plan to transfer India’s stake a “tactical work-around”, given “increasingly difficult and chaotic U.S. decisions” impacting India-Iran ties.
“In enlisting a local partner, [India is] not actually exiting a strategic project but safeguarding India’s interests on a project of tremendous long-term importance. It’s equally important that the Iranians should know that we remain vested in this critical bilateral project,” he added, pointing out that India’s other regional infrastructure project IMEC (India-Middle East-Europe Economic Corridor) is also unlikely to “take shape any time soon”, given the fractures within the Gulf countries, enhancing Chabahar’s importance.
Although the original Chabahar port agreement between India and Iran was signed in 2003, U.S. sanctions have consistently slowed down progress on the major connectivity project from India through Iran to Afghanistan and Central Asia, while circumventing transit hurdles from Pakistan.
In 2016, Prime Minister Narendra Modi travelled to Tehran and signed a trilateral agreement between India, Iran and Afghanistan to operationalise the Chabahar route with ambitions to develop the port, as well as a road project and railway line from Chabahar-Zahedan over the Afghan border.
In 2018, the U.S. agreed to a “carve-out” exception for India to use the route to send food and aid to Afghanistan, but subsequently changed policy, mounting pressure on India to curtail ties with Iran, including oil imports, trade, and the Chabahar port.
In 2019, the U.S. introduced sanctions to curb steel trade as well, which disrupted India’s plans to provide rolling stock (coaches), tracks, switching and signalling equipment, and after several delays, Iran dropped India from the railway project. In May 2024, the government tried to re-energise the project, signing a 10-year agreement with the Iranian government to develop the port.
However, on February 4, 2025, within days of taking office, U.S. President Donald Trump issued the National Security Presidential Memorandum (NSPM-2) that mandated the U.S. Secretary of State 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”.
The order made it clear, long before the war in West Asia began, that Washington expected New Delhi to shut down its involvement in the Chabahar project, which was decades in the making, and is now at a dead end.
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