Even as the extended US sanctions waiver on India’s Chabahar Port is set to expire this Sunday, India is preparing to divest its stake in the Chabahar Port project and transfer it to a local Iranian entity, Business Standard reported on Friday.
According to the report, a proposal has been worked out under which India Ports Global Ltd (IPGL) would sell its holding in India Ports Global Chabahar Free Zone (IPGCFZ) to an Iranian entity. The move is being considered as the current sanctions relief is set to lapse on Sunday.
The report said New Delhi has also explored an interim arrangement where a domestic Iranian operator would manage the port during the sanctions period, with an understanding that operational control could return to India once restrictions are lifted.
Queries sent by Business Standard to the Ministries of External Affairs and Ports, Shipping and Waterways had not received a response at the time of publication.
India’s engagement at Chabahar has enjoyed US sanctions exemptions since November 2018. However, Business Standard said that in February 2025, the US administration asked the Secretary of State to review or withdraw waivers that provide Iran any economic or financial relief, including those linked to Chabahar. The report added that the US State Department later withdrew the original 2018 waiver on September 29 last year.
Citing a statement made by the Ministry of External Affairs in Parliament, Business Standard said the US Department of the Treasury had issued a letter on October 28, 2025, clarifying that activities at Chabahar Port would remain protected from US sanctions until April 26, 2026.
India has invested nearly $120 million in equipment procurement for the Chabahar project, according to the report. The port has also been used to facilitate humanitarian assistance and emergency supplies to Afghanistan.
Last September, the United States had enforced stringent economic sanctions on Iran, while allowing India a temporary six-month exemption for its involvement in the Chabahar port project.
In 2024, India signed a 10-year agreement with Iran to operate a terminal at Chabahar after years of negotiations. The port is seen as strategically important for India because it provides access to Afghanistan and Central Asia while bypassing Pakistan. It is also viewed as a counterweight to China-backed development of Pakistan’s Gwadar Port.
Chabahar is a key node in the proposed International North-South Transport Corridor (INSTC), which seeks to connect India with Central Asia and Russia through a multimodal trade route and reduce transit times.
Business Standard further reported that the Indian government had internally examined the risks of continued involvement in Chabahar if sanctions relief was not extended. Legal experts reportedly warned that companies associated with the project could face sanctions exposure, potentially affecting India’s broader ambitions in overseas port operations.
IPGL, which operates the India-backed terminal at Chabahar, is a wholly owned subsidiary of Sagarmala Development Corporation Ltd, now renamed Sagarmala Finance Corporation. The company is also part of the Bharat Global Ports consortium launched in February 2025 to pursue international port opportunities. IPGL additionally operates Myanmar’s Sittwe Port.
If the proposed stake transfer is completed, sanctions-related risks tied to the Chabahar project could ease significantly, Business Standard said.
