New Delhi: Seven months after signalling its intent, the United States announced it will revoke the sanctions waiver for Iran’s Chabahar port on September 29, ending a seven-year exception that had allowed India to operate the facility as a route to Afghanistan and Central Asia.The decision was detailed in a state department release on Tuesday (September 16) outlining new actions against Iran’s financial networks. In that statement, the state department spokesperson said that in line with President Donald Trump’s “maximum pressure” policy, secretary of state Marco Rubio had revoked the sanctions exception granted in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA), to go into effect on September 29.The 2018 waiver had provided a legal shield for India’s work at the Chabahar port. Its withdrawal means that “persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions,” the state department principal deputy spokesperson said.India has so far not given a formal response to the US announcement.The revocation follows a national security presidential memorandum signed by Trump in February, just two weeks into his second term, that directed officials to roll back waivers providing Iran with any form of economic or financial relief.The memorandum specifically called for a review of exemptions tied to the Chabahar project.Before Washington’s reversal, India had deepened its commitment to Chabahar. In May 2024, during the Biden administration’s tenure, New Delhi signed a long-term lease agreement granting state-run India Ports Global Ltd (IPGL) the right to equip and operate the port for ten years.The agreement was signed in Tehran by India’s shipping minister Sarbananda Sonowal and Iranian minister for roads and urban development Mehrdad Bazrpash, with both sides describing it as a milestone in bilateral cooperation. The deal also included a provision to extend the arrangement beyond the initial term.Under the contract, IPGL pledged to invest about $120 million in port equipment and offered a $250 million credit line for “mutually identified projects aimed at improving Chabahar-related infrastructure”.Bazrpash announced at the signing that Iran expected the Chabahar-Zahedan railway, which will link the port to inland networks and ultimately to the Turkmenistan border, to be completed soon.The Iranian minister also floated the idea of launching a new joint shipping line.At the time of the 2024 agreement, Indian officials reported that since 2018, Chabahar had handled more than 90,000 20-foot equivalent units of container traffic and over 8.4 million metric tonnes of bulk and general cargo.For New Delhi, the 2024 lease formalised its role in a facility regarded as central to its connectivity strategy for Afghanistan and Central Asia, providing an alternative to overland routes through Pakistan.The project was also seen as a strategic counterweight to the Gwadar port in Pakistan, developed under China’s Belt and Road Initiative and located barely 170 kilometres away across the border.The waiver that kept Chabahar outside US sanctions was first granted in November 2018, following intense negotiations. That year, the Trump administration had withdrawn from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action, and reimposed sweeping sanctions targeting Tehran’s energy and financial sectors.At the time, the future of Chabahar looked uncertain. Both India and Afghanistan pressed Washington to preserve the project.Afghan President Ashraf Ghani personally lobbied US officials, arguing that Chabahar was essential for his country’s reconstruction and trade, since dependence on Pakistan left Kabul vulnerable to border closures and political disputes.Indian diplomats likewise emphasised that the port was not simply an economic venture but a strategic initiative that would contribute to regional stability.Eventually, Washington agreed to exempt Chabahar from sanctions, allowing Afghanistan-reconstruction and development projects tied to the port to proceed. The waiver was seen as a recognition of both Afghan humanitarian needs and India’s regional role.However, private companies had already been reluctant to engage with Chabahar even during the period of exemption, wary of reputational and financial risks linked to US sanctions.When the Trump administration returned to power earlier this year, that symbolic view which accepted the importance of the port for India and Afghanistan seemed to have been abandoned.In February 2025, the presidential memorandum made clear that exemptions would be curtailed.Indian officials, while awaiting the outcome, reiterated their commitment to the project. A senior diplomat said then that the “Chabahar port has proven its strong potential” as a connectivity hub, underscoring the port’s significance to New Delhi’s strategic calculations.With the waiver now set to lapse, India faces fresh uncertainty over a strategic investment. This move already comes against the backdrop of the US having imposed the highest tariffs in the world at 50% on Indian imported goods, half as ‘reciprocal’ duties and half as a penalty for continuing to buy Russian oil. Brazil is the only other country to face a 50% US tariff.Earlier, India had been blindsided when Trump invited Pakistan’s army chief, Field Marshal Asim Munir, to lunch at the White House – the first time a serving Pakistani army chief received such an invitation.The move followed a flare-up between India and Pakistan involving missiles and drones in May. It fed perceptions in New Delhi that Islamabad was being favoured, particularly as Trump claimed credit for brokering the end of hostilities between the two rivals – a claim that was not validated by India.Signs of a thaw appeared in early September, when Trump described Modi as a “friend” and spoke of a “special relationship” with India. Modi quickly responded on X, calling the partnership “very positive and forward-looking”.Four days later, on September 9, Trump posted on Truth Social that negotiations with India were “continuing”, in his first public confirmation in months that talks were still active.Modi replied that he looked forward to speaking with Trump soon, expressing confidence that trade negotiations would “pave the way for unlocking the limitless potential of the India–US partnership”.The two leaders eventually spoke by phone on Tuesday night India time, their first call since June, but publicly mentioned only birthday greetings and the Ukraine war.It was on the same day that the US state department announced the decision to revoke the sanctions waiver on Iran’s Chabahar port.