India’s long-dormant Chabahar port project has once again been thrown into limbo because of the recent military attack by the United States and Israel on Iran. With U.S. sanctions against Tehran tightening, New Delhi is facing a familiar dilemma of trying to protect a strategic investment in Iran while not jeopardizing India’s growing bilateral ties with the U.S. and Gulf countries.
Despite the geopolitical upheaval, experts say there is no likelihood that India will walk away from Chabahar. Rather, India will likely adjust its connectivity strategy behind the scenes by placing more emphasis on the India-Middle East-Europe Corridor (IMEC) while continuing to protect its longer-term investment interests in the Iranian port.
Why Chabahar is still important to India strategically
Chabahar, which is located on Iran’s southeastern coastline near the Gulf of Oman, is the closest legal port of entry from Asia to the Indian Ocean. This gives India direct sea access to the Indian Ocean. Located only approximately 170 km from the Chinese-funded Gwadar port in Pakistan, Chabahar has always been viewed as a strategic counterweight to Gwadar by New Delhi.
In 2003, India proposed the development of the Chabahar port as a trade route into Central Asia and Afghanistan that would bypass Pakistan. Under the framework of Chabahar, goods from India will be able to reach Afghanistan and Central Asia via the sea and then move inland through the existing road and rail transport infrastructure throughout Iran.
Chabahar Port also connects to the International North-South Transport Corridor (INSTC), an extensive (7,200 km) multimodal network that connects India with Central Asia, Russia, and Europe. The INSTC is expected to reduce transit times for freight by approximately two weeks from the traditional route via the Suez Canal.
For India, the priority of this project is ultimately the opportunity to access two-way trade with Eurasian markets without depending on land routes that go through Pakistan.
How sanctions and the Iran conflict complicate India’s plans
With the latest escalation between Iran and the United States, U.S. sanctions on Iran’s nuclear program are being reinstituted, causing all of the uncertainties created by the new geopolitical environment to put additional doubts on future waivers for India.
India signed a 10-year agreement with Indian Ports Global Limited in 2024 to manage the Shahid Beheshti terminal in Chabahar. As a result of U.S. sanctions, there are many concerns regarding the viability of managing financial transactions, providing any insurance coverage, and effectively shipping internationally from Chabahar.
Analysts will not be surprised if India employs quiet diplomacy in lieu of publicly confronting Washington. International relations expert Tarun Agarwal was quoted by Moneycontrol as stating, “I don’t think India will do anything major regarding Chabahar,” indicating that New Delhi will seek calibrated arrangements to protect its investments.
Why India is increasingly focusing on the IMEC corridor
In addition, India is broadening its ambitions for connectivity in other areas.
The IMEC, or India-Middle East-Europe Corridor, launched at the G20 summit in 2023, aims to physically connect India to Europe via the UAE, Saudi Arabia, and Mediterranean ports using rail and shipping networks.
Additionally, IMEC runs through countries that have significant ties to the United States, which reduces the risk of sanctions and political turbulence and provides access to major logistics hubs in the Gulf Region.
Therefore, India will likely begin to see the IMEC corridor as an alternate but complimentary route to connect with Europe and the Middle East, whereas Chabahar would continue to be the gateway to Central Asian and Afghanistan.
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What lies ahead for India’s connectivity strategy
While there have been numerous delays with Chabahar due to geopolitics, Chabahar continues to be an important long-term component of India’s long-term regional strategy.
Chabahar creates India’s presence on the Arabian Sea, counters China’s growing power at Gwadar, and further validates India’s desire to connect to the Eurasian trade corridor.
If India is to shift its focus to the IMEC corridor away from Chabahar, it will mean giving up one of India’s only strategic footholds in Iran and Central Asia.
For now, India’s approach is likely to remain pragmatic: expand new corridors where possible, but keep Chabahar alive as a long-term strategic option.
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