India has ambitious plans to expand the capacity of Chabahar Port in Iran, aiming to increase it fivefold from its current level of 100,000 TEUs (twenty-foot equivalent units) to 500,000 TEUs over the next decade. This expansion, backed by an investment of approximately ₹4,000 crore (around $480 million), is part of a broader strategy to enhance regional connectivity and bolster trade links with Iran, Afghanistan, Central Asia, and beyond. The project includes modernizing the port with equipment such as five mobile harbor cranes, which have already been ordered, and exploring the addition of a second berth to support increased operations.
This development persists despite challenges posed by U.S. President Donald Trump’s recent decision to scrap sanctions waivers related to Chabahar Port. In February 2025, Trump issued an executive order under his “Maximum Pressure on Iran” policy, directing the U.S. Secretary of State to modify or rescind waivers that previously allowed India to develop the port without facing U.S. sanctions. These waivers, initially granted in 2018, were intended to support humanitarian aid to Afghanistan and regional trade, but the shifting U.S. stance—particularly after the 2021 Afghanistan withdrawal—has put India’s plans under scrutiny.
India’s commitment to Chabahar remains firm. The port, located on Iran’s southeastern coast, serves as a strategic gateway for India to access landlocked regions, bypassing Pakistan’s Gwadar Port, a rival project backed by China. In May 2024, India signed a 10-year agreement with Iran to operate and equip the Shahid Beheshti Terminal, committing $120 million in grants and offering a $250 million line of credit for infrastructure improvements. Despite the U.S. threat of sanctions, India is proceeding with its expansion, viewing Chabahar as critical to its geopolitical and economic interests, including integration with the International North-South Transport Corridor (INSTC) for trade with Russia and Central Asia.
The Indian government is navigating this complex situation by assessing the impact of Trump’s policy shift and engaging in diplomatic efforts, potentially raising the issue during high-level talks with the U.S. While the loss of waivers could complicate financing and international cooperation, India’s defiance signals its intent to prioritize strategic autonomy and regional influence over compliance with U.S. sanctions pressure. The expansion is projected to significantly boost the port’s capacity, with targets of handling 75,000 TEUs in FY25 and reaching 100,000 TEUs by FY26, setting the stage for a fivefold increase by 2035.
