India is weighing its options on its role in developing the Chabahar port in Iran amid growing tensions with the United States over trade with Tehran.
The Trump administration has threatened a 25 per cent additional tariff on countries doing business with Iran, raising questions about India’s continued involvement in the strategically located port.
India is a major partner in the Chabahar port project, located in Iran’s Sistan-Balochistan province on the southern coast.
In September last year, the US imposed economic sanctions on Iran but granted India a six-month exemption from punitive measures related to the port. That waiver is set to expire on April 26.
External Affairs Ministry spokesperson Randhir Jaiswal said on Friday that India is engaging with the US on the issue. His remarks came amid reports that New Delhi is considering withdrawing from the project due to the fresh American tariffs.
"As you are aware, on October 28, the US Department of Treasury had issued a letter outlining the guidance on the conditional sanctions waiver valid till April 26, 2026. We remain engaged with the US side in working out this arrangement," Jaiswal said.
Jaiswal also highlighted India’s long-standing ties with Iran and said New Delhi is closely following the evolving situation in the country, which has seen massive anti-government protests resulting in over 2,500 deaths.
Sources said India is in the process of transferring roughly USD 120 million, its committed contribution to the project, to end direct exposure to Chabahar.
Officials are also exploring the possibility of creating a new entity to continue the port’s development, allowing India to maintain support while limiting government risk.
In September last year, the Trump administration had revoked the 2018 sanctions waiver on Chabahar, only to extend a six-month exemption to India shortly afterward.
The latest 25 per cent tariff on countries trading with Iran is expected to have a "minimal impact" on India, government sources said.
Jaiswal said bilateral trade between India and Iran amounted to USD 1.6 billion last year, with India exporting USD 1.2 billion and importing USD 0.4 billion.
The Chabahar port is being developed to boost trade and connectivity, with both countries advocating for it to be part of the International North-South Transport Corridor (INSTC), a 7,200-km freight route linking India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia, and Europe.
Jaiswal added that the Indian embassy in Tehran is in touch with the roughly 9,000 Indians residing in Iran, most of whom are students.
"We are keeping a close watch on the situation there, and as far as our citizens are concerned, we are committed to doing whatever is necessary for their well-being," he said.
India has issued advisories advising its nationals in Iran to leave and discouraging travel to the country.
"If they hang them, you're going to see some things ... We will take very strong action if they do such a thing," US President Donald Trump said in a message to the protesters, adding that "help is on the way."
The protests, which began in Tehran after the Iranian currency rial fell to record lows, have spread to all 31 provinces, shifting from economic grievances to demands for political change.