With just days to go before US sanctions on Iran's Chabahar Port—in which India owns a significant stake—come into effect, New Delhi is considering divesting its stake in the port, but with a condition.
The proposal involves disinvesting the stake of India Ports Global (IPGL) in India Ports Global Chabahar Free Zone (IPGCFZ) to an Iranian entity, as per a Bloomberg report, citing an official in the know.
However, the proposal also involves a guarantee that the Iranian entity would transfer the stake in the port back to India once the sanctions are lifted. According to assessments by the government in 2025, the sanctions on the port could even spill over to companies involved in port operations, which would impact India's maritime sector.
In that regard, the official reiterated that it was not India's intention to remove itself from the port forever, as there are plans in place to expand connectivity at the harbour with a new rail link.
The report added that India is also in talks with the US and Iran on possible other ways to proceed with its financial ties to the port.
Though officials had earlier been hopeful of securing another extension of the US sanctions waiver on Chabahar, citing its importance to India, the war in the Gulf has made this unlikely, given that the US State Department had been ordered back in February 2025 to "modify or rescind sanctions waivers" that gave Iran economic relief in any manner.
This had led to the US treasury department communicating to India in October 2025 that the US sanctions waiver on the Chabahar Port would expire on April 26, 2026.
Why is the port important for India?
Though no final decision on the Iranian port has been made yet, the buzz around Chabahar amid the war in the Gulf (which nears two months) has renewed interest in its importance to India.
Back in 2024, the Indian public sector firm, India Ports Global Limited (IPGL), had signed a 10-year agreement to operate the Shahid Beheshti Terminal of the port, alongside Iran's Ports and Maritime Organisation (PMO).
Since then, the IPGL—which is fully owned by the Sagarmala Development Corporation (SDCL), that later became the Sagarmala Finance Corporation Limited (SMFCL)—has pumped nearly $120 million into the port.
Apart from its strategic location near Pakistan's Gwadar Port—in which China has a stake—the Chabahar Port is also a critical gateway for the proposed International North-South Transport Corridor (INSTC).
The INSTC is a multi-modal route between India, Central Asia and Russia, aimed at reducing transit time for trade.
India has also reiterated that the Iranian port is important, as it allows for the provision of emergency assistance to Afghanistan.