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India is reviewing its strategic options regarding its investment in Iran’s Chabahar Port as a key U.S. sanctions waiver nears expiration, raising uncertainty about the future of New Delhi’s involvement in the project. Officials familiar with the discussions say the government is considering several possible steps, including a temporary transfer of its stake to an Iranian partner while continuing long-term engagement with the port’s development.

According to officials involved in the matter, India has been holding parallel discussions with both Washington and Tehran to determine how best to safeguard its approximately $120 million investment. One proposal under consideration involves temporarily shifting ownership responsibility to an Iranian entity in order to maintain operational continuity without fully withdrawing from the infrastructure project. Authorities indicated that India does not intend to permanently exit the port, particularly because it remains central to broader connectivity plans linked to regional transport corridors.

The uncertainty follows expectations that the U.S. sanctions waiver allowing India to operate at Chabahar would be extended. However, worsening tensions between the United States and Iran have made an extension less likely. Officials said a final decision on India’s future participation has not yet been reached as diplomatic consultations continue.

India signed a 10-year agreement with Iran’s Port and Maritime Organization in 2024 to develop Chabahar as a key logistics hub for trade routes connecting Afghanistan and Central Asia while bypassing Pakistan. The United States initially granted India a sanctions exemption in 2018 because of the port’s importance for humanitarian and regional connectivity goals. Although the waiver was withdrawn in September 2025, a temporary extension was later granted until April 2026 following diplomatic engagement from New Delhi.

External Affairs Minister Subrahmanyam Jaishankar told lawmakers earlier this year that India remains actively engaged with relevant international partners to address the implications of changing geopolitical developments surrounding the project. Reports in Business Standard also suggested that New Delhi has explored the possibility of transferring its stake to an Iranian entity as part of contingency planning.

The issue reflects India’s broader effort to balance its strategic relationship with the United States alongside its longstanding ties with Iran. Rising tensions in the Persian Gulf region, including security concerns affecting shipping routes through the Strait of Hormuz, have added complexity to India’s policy decisions. The Chabahar Port continues to play a significant role in the International North-South Transport Corridor, a major logistics network linking India with Russia and Central Asia. Since 2018, India has used the port to send more than four million tonnes of humanitarian food assistance to Afghanistan, underscoring its continued importance in regional trade and development planning.