Syllabus: GS-II: Bilateral Relation

Why in the News?

The United States announced that it will revoke the sanctions waiver granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for Chabahar Port (Shahid Beheshti Terminal in Iran). The waiver will end effective September 29, 2025. 

Move About the News

• This move exposes Indian involvement in Chabahar to potential U.S. sanctions. 
• Given Chabahar’s significance for India, this change poses strategic, economic, and diplomatic challenges.

About Chabahar Port

• Location & Features: Chabahar is Iran’s oceanic port on the Gulf of Oman in Sistan and Baluchestan Province. 
  • It has two terminals — Shahid Beheshti and Shahid Kalantari. 
    • It is Iran’s only port with direct access to the Indian Ocean without going through the Strait of Hormuz.
• Cargo Capacity: In earlier years, the port handled about 2.1 million tons of cargo, with major plans for expansion to increase its strategic utility.

About the Chabahar Port Agreement

• Trilateral Agreement (2016): In May 2016, India, Iran and Afghanistan signed the Chabahar Agreement to establish the International Transport and Transit Corridor, allowing goods to transit through Chabahar port to Afghanistan. 
  • India undertook refurbishment of port infrastructure, developed container handling facilities, and made investments to connect Chabahar to Afghan border regions.

10-Year Management Pact (2024): India and Iran signed a 10-year agreement for India to manage Shahid Beheshti terminal, providing continuity and greater control over operations.

Linkage to the Zaranj–Delaram Highway

• The Chabahar Port is directly linked to the Zaranj–Delaram Highway in Afghanistan, a 215 km long road built with Indian assistance.
• This connectivity provides a gateway from Chabahar to Afghanistan’s ring road, facilitating India’s access not just to Afghanistan but also to Central Asia and beyond via the International North-South Transport Corridor (INSTC).
• It enables India to bypass Pakistan and ensures a secure supply line for both trade and humanitarian aid.
  

Why Chabahar is Important for India

• Alternate Route to Afghanistan & Central Asia: It bypasses Pakistan, facilitating trade, aid, and transit to landlocked Central Asian countries.
• Strategic Connectivity & INSTC: It is part of India’s broader strategy via the International North-South Transport Corridor (INSTC). 
  • It helps reduce transit time and cost compared to routes via Pakistan or longer maritime routes.
• Balancing China-Pakistan Influence: Chabahar serves as a counterpoint to China’s Gwadar port in Pakistan, offering India a footprint in the region.
• Humanitarian & Aid Deliveries: India has used Chabahar to send wheat and medicines to Afghanistan in past years.
  

How Withdrawal of Sanctions Could Impact India?

• Exposure to Sanctions: Post-Withdrawal of Sanctions, entities (public or private) involved in Chabahar operations may face legal/financial penalties under U.S. law.
• Investment Disincentive: Indian companies may be wary of further capital infusion or expansion due to risk. 
  • This could slow down port upgrades, terminal expansions, and operations.
• Operational Difficulties: Insurance, equipment procurement, and logistics tied to global supply chains might be impacted if subject to U.S. restrictions.
• Diplomatic Strain: India may have to navigate U.S. pressure vs. its strategic autonomy. 
  • Maintaining relations with Iran, providing for Afghanistan, while aligning with American policies becomes more complex.

Challenges in Realising Full Potential of Chabahar

• Sanctions & Legal Risks: Sanctions uncertainty has already slowed progress; the waiver removal makes risks more acute.
• Security & Stability: Regional instability in Afghanistan and political risk in Iran pose challenges for safe transit.
• Connectivity Gaps: Although road links exist, the Chabahar–Zahedan rail line has faced chronic delays.
• Financial & Operational Viability: Ensuring volumes of trade to justify investment remains a challenge.
• Diplomatic Pressures: Balancing U.S. expectations, Iran’s regional ambitions, Pakistan’s concerns, and managing Afghan regime issues.
  

Way Forward

• Diplomatic Engagement: India must seek exemptions or carve-outs with the U.S. for current operations and highlight the port’s humanitarian role.
• Risk-Mitigated Investments: Channel investments through non-U.S. entities, secure alternative financing, and diversify insurance partners.
• Operational Autonomy: Expedite development of Chabahar and ensure its linkage with the INSTC and Afghan infrastructure like the Zaranj–Delaram Highway.
• Diversification of Routes: Develop alternate corridors with Central Asia and Russia to reduce sole reliance on Chabahar.
• Multilateral Support: Internationalise Chabahar through SCO and INSTC partners to reduce unilateral U.S. leverage.
• Legal & Institutional Preparedness: Indian operators must comply with international norms to defend against sanctions threats.
  

Conclusion

The withdrawal of the U.S. sanctions waiver for Chabahar Port marks a turning point in India’s regional connectivity strategy. Chabahar, with its linkage to the Zaranj–Delaram Highway, remains India’s vital gateway to Afghanistan and Central Asia, countering Pakistan’s geographical chokehold. However, sanctions risks and geopolitical pressures threaten to derail its potential. India must adopt a mix of diplomatic negotiation, alternative financing, multilateral cooperation, and fast-tracked infrastructure development to secure Chabahar’s place in its long-term strategic vision.

Mains Practice Question

1. “The withdrawal of U.S. sanctions waiver for Chabahar Port presents both a challenge and an opportunity for India.” Analyse the strategic, economic, and diplomatic implications of this move, and suggest measures India should adopt to preserve and enhance Chabahar’s role in its regional connectivity architecture. (250 words / 15 marks)

Why did India condemn Doha strike?

SOURCE

Indian Express