The United States has revoked a key sanctions waiver for Iran’s Chabahar Port, striking at the heart of India’s only overland access to Afghanistan and Central Asia that bypasses Pakistan, and placing billions of dollars’ worth of strategic planning under strain.
The State Department confirmed that the exception under the Iran Freedom and Counter-Proliferation Act (IFCA), which had allowed India to channel investment into Chabahar for Afghanistan’s reconstruction, was withdrawn with effect from September 29, 2025. The waiver had for years insulated New Delhi’s projects from punitive measures, enabling the flow of aid and trade to Kabul despite Washington’s broader embargoes on Tehran.
India has so far invested more than $120 million in the Shahid Beheshti terminal and related infrastructure, viewing Chabahar as its linchpin for regional connectivity. The withdrawal of the exemption now exposes Indian companies, port authorities, and financial institutions to secondary US sanctions, threatening to freeze operations at the very hub meant to anchor its outreach to Central Asia.
The repercussions extend beyond India. Chabahar had doubled as a humanitarian artery, supporting Afghanistan’s reconstruction in health, education, and infrastructure. Analysts caution that cutting off this channel could disrupt aid flows and force Kabul to seek alternatives under already fragile economic conditions. “The waiver was never just about trade; it was a lifeline for Afghanistan’s development,” a regional observer noted, warning that its suspension may deepen instability in the war-torn country.
The move comes alongside a new round of sanctions targeting Iran’s financial conduits, with the US blacklisting entities in the United Arab Emirates and Hong Kong accused of facilitating Iranian oil sales. Washington insists the measures are designed to tighten economic pressure on Tehran, though their ripple effects are now poised to reshape South and Central Asian geopolitics.
For India, the setback marks a blow to years of strategic planning. Chabahar had offered New Delhi its sole reliable passage to Afghanistan free of Pakistani oversight, positioning it as a counterweight to China’s influence in Gwadar. With the waiver gone, India faces the stark prospect of being sidelined in the region’s evolving connectivity map, while Iran’s role as a regional transit hub risks further isolation.
