U.S. Abolishing Waivers Threatens India's Chabahar Port Investments and Iran Trade: $514 Million Exports and Growing Cargo Volumes Under Scrutiny, along with Focus on Armenia Trade Route
The Chabahar Port, located on Iran's southeastern coast, has seen a significant surge in activity over the past few years. This strategic port, managed by India Ports Global Limited, has handled more than 450 vessels, 134,082 TEUs of container cargo, and 8.7 million tonnes of bulk/general cargo since India Ports Global Limited took over in around 2018.
India views the Chabahar-Iran corridor as an opportunity to deepen its footprint in the region and strengthen ties with countries like Armenia. The corridor offers a rare open route for Armenia to bring in supplies from India due to tense or closed borders with Turkey and Azerbaijan. In fact, India has been exploring this corridor as a means to strengthen ties with Armenia.
The increased activity at the Chabahar Port is reflected in the significant rise in goods moved via the port. Between FY 21 and FY 24, the total goods moved via Chabahar rose from 1.2 million tonnes to 2.84 million tonnes. This growth is attributed to the export of various non-oil products, including basmati rice, bananas, soya meal, Bengal gram, tea, and more. In the first quarter of Iran's current calendar year (March 21 - June 21), India exported approximately USD 514 million worth of non-oil products to Iran. For all of FY 2025, India's total exports to Iran stood at roughly USD 1.24 billion, with basmati rice accounting for USD 753 million.
However, potential challenges lie ahead. The removal of the US waiver protecting India's projects at Chabahar from sanctions, effective September 29, 2025, could lead to higher insurance costs, difficulties in financing, or hesitation from foreign partners due to fear of sanctions. These potential issues could slow the growth of trade through Chabahar, particularly for goods or equipment that require international banking and shipping services.
To mitigate these challenges, India will need to negotiate, find safer financing and insurance channels, and work with partners like Armenia and Iran to keep trade flowing. India has already invested approximately USD 120 million for equipment and an additional USD 250 million in credit for infrastructure development at the Chabahar Port. Armenia, too, wants to use Iranian ports like Chabahar and Bandar Abbas for trade and defense purposes.
As the Chabahar Port continues to grow and evolve, it is clear that it plays a crucial role in India's strategic plans for the region. By strengthening ties with countries like Armenia and increasing trade, India is positioning itself as a key player in the region. Despite the challenges that lie ahead, the future of the Chabahar Port looks promising.
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