US President Donald Trump has imposed sanctions on India’s Chabahar port project in Iran. This move marks the latest step in his campaign against India.

India’s Investment at Risk

Over the past decade, India has spent around $500–600 million to develop Chabahar. The project aims to boost trade and connectivity with Afghanistan and Central Asia. However, Trump’s sanctions now put these investments at risk.

Waiver Revoked

Earlier, the Trump administration announced on September 16 that it would revoke the 2018 sanctions waiver. While former President Joe Biden had renewed the waiver in 2021, the US State Department warned that after September 29, anyone operating at Chabahar or engaging in related activities under the Iran Freedom and Counter-Proliferation Act (IFCA) could face sanctions.

Impact on Companies

Consequently, Indian and foreign companies involved in Chabahar may struggle to find suppliers or financing. Moreover, the sanctions could worsen India-US relations, which are already strained due to tariffs, disputes over Kashmir, and US partnerships with Pakistan.

Exit Deadline

Under the sanctions, companies including India Ports Global Limited have 45 days to exit Chabahar. Otherwise, they risk frozen US assets and barred transactions, AFP reported.

Joshua Kretman, a lawyer at Dentons, said: “Any inclusion of an Indian firm on the sanctioned list has the potential to create a kind of cascading effect where banks and other companies may not transact with the designated business.” He added, “If that sanctioned entity operates globally, needs access to major banks or dollar clearing, there is legitimate reason for concern.”

Strategic Consequences

Analysts warn that the sanctions may backfire. They argue that the move could push India closer to Russia and China, forcing it to rely on alternative financial networks.

Geopolitical strategist Kadira Pethiyagoda said: “India may choose to wear the sanctions as part of a broader effort amongst non-Western Great Powers, including China and Russia, to reduce reliance on the US economy and decouple from Western-controlled financial networks.” She also noted that India could use its ties with Iran as “leverage in its dealings with the US, Gulf states and Israel.”

India’s Response

Meanwhile, India’s External Affairs Ministry said, “We are presently examining the implications that this revocation has for India.”