India likely to hand over the keys
The government has taken up a proposal to disinvest India Ports Global’s (IPGL) stake in India Ports Global Chabahar Free Zone (IPGCFZ) to an Iranian entity, an official in the know said.
India’s activities at the Iranian port will remain sanctions-free until Sunday, and it is eyeing an arrangement where a local entity would take over operations as long as US sanctions remain in effect, with a guarantee that it would be transferred back to India once sanctions are lifted.
Questions sent to the Ministry of External Affairs and the Ministry of Ports, Shipping and Waterways remained unanswered till the time of writing.
Amid the West Asia war, the Ministry of External Affairs (MEA) is holding talks with all stakeholders on the situation. India’s Chabahar operations were exempted from US sanctions on Iran in November 2018.
In February 2025, the US administration ordered the Secretary of State to modify or revoke sanctions exemptions, particularly those that provide any level of economic or financial relief to Iran, including exemptions related to Iran’s Chabahar port project. On September 29 last year, the US State Department had canceled the 2018 exemption.
“Following India’s representation, on October 28, 2025, the US Treasury Department issued a letter stating that activities at Chabahar Port will not be subject to US sanctions until April 26, 2026,” the Ministry of External Affairs told Parliament this February.
The ministry said India has invested about $120 million in the Chabahar project in purchasing equipment at the port, which was instrumental in providing humanitarian and other types of emergency assistance to Afghanistan.
India had signed a 10-year agreement with Iran to operate a terminal at the port in 2024 after several rounds of talks.
Given its proximity to Pakistan and Chinese investment in Pakistan’s Gwadar port, India considers its presence in the port strategically important.
It is an important gateway to the proposed International North-South Transport Corridor (INSTC) – a multi-modal route between India, Central Asia and Russia, reducing transit time for trade between the three regions.
Last year, the government assessed the spillover effects of investments in Chabahar should the sanctions exemptions not be retained, and legal experts opined that companies involved could be affected. If they are also banned, it could hamper India’s plans to become a global ports player.
IPGL, the operator of the India-funded Chabahar Terminal, is a 100 per cent subsidiary of Sagarmala Development Corporation (SDCL) – now rechristened as Sagarmala Finance Corporation. The company is India’s first maritime non-banking finance corporation. IPGL is also part of the India Global Ports Consortium, which was launched by Shipping Minister Sarbananda Sonowal in February 2025 to bid for overseas port projects. IPGL also operates the Sittwe Port in Myanmar.
If the stake transfer is made to a local entity, those risks will be eliminated.
