Iran open to working with India on Chabahar port, says Iranian envoy

Iran said it remains open to India’s involvement at Chabahar port, even as New Delhi cut budgetary allocation to zero amid US sanctions concerns

New Delhi: Iran remains open to working with India for operations at the Chabahar port, though there has been no official word from New Delhi on the facility following the allocation for the port being slashed to zero in the Budget for 2026–27, Iranian ambassador Mohammad Fathali said on Friday.

A six-month exemption from US sanctions applicable to Chabahar port is valid until April. (HT_PRINT)

There has been speculation about the future of India’s operations at the Shahid Beheshti terminal of the Chabahar port since the sudden winding up of India Ports Global Limited, the state-owned entity that had taken over operations at the port in 2018, and the resignation late last year of Indian officials serving in the firm in the wake of US sanctions.

Budget documents showed the allocation for Chabahar, revised from ₹100 crore to ₹400 crore for 2025–26, was cut to nil for 2026–27.

“You know that the port of Chabahar is vital and it can play a good role for accessing Afghanistan and Central Asia. We have good relations with some countries, particularly India, and believe that we should expand our relations on this issue,” Fathali said while addressing a media briefing at the Iranian embassy ahead of the 47th anniversary of the Iranian Revolution.

Fathali noted that the Chabahar port is part of Iran’s capacity for boosting regional connectivity and said questions about India’s continued participation in the development of the facility should be directed to the Indian side. “Up to now, we have no comment from the Indian side,” he said.

“We believe that Chabahar is Chabahar; the location won’t change and some countries use this geographical location for access to Central Asia and Afghanistan,” Fathali said, emphasising the strategic importance of the deep-water port’s location on the Gulf of Oman. “I think we have good relations with India on this issue, and we believe that in future, the Indian government wants to manage the situation,” he said, without giving details.

The government informed Parliament this week that India has fulfilled its commitment of contributing $120 million for procuring port equipment in keeping with the terms of the 10-year agreement signed by India Ports Global Limited and the Ports and Maritime Organisation of Iran in May 2024 for equipping and operating the Shahid Beheshti terminal.

Minister of State for External Affairs Kirti Vardhan Singh told the Rajya Sabha in a written reply on Thursday that the last tranche of the $120 million was transferred on August 26, 2025.

Singh reiterated this in another written reply in the Lok Sabha on Friday and said that on September 16, 2025, the US State Department revoked a sanctions exception issued in 2018 under the Iran Freedom and Counter-Proliferation Act for Afghanistan’s reconstruction and economic development.

“Pursuant to discussions with the US side, the latter issued guidance extending the conditional sanctions waiver until April 26, 2026. The Government of India remains engaged with all concerned in order to address the implications of these developments,” Singh said, without going into details.

People familiar with the matter said the two sides are exploring various options for operations at the Shahid Beheshti terminal, including the creation of a new firm without any exposure for government entities and officials to US sanctions, or the handing over of operations to an Iranian firm for the time being.

Fathali also told the briefing that Iranian President Masoud Pezeshkian is expected to attend the BRICS Summit to be hosted by India later this year. He said such a visit would be a “good opportunity for boosting our relations with India”. He added that dates are also being explored for a planned visit to New Delhi by Iranian Foreign Minister Seyed Abbas Araghchi.