On February 4, 2025, U.S. President Donald Trump signed an executive order reimposing “maximum pressure” on the government of the Islamic Republic of Iran. The anti-Iran campaign is intended to deprive the country of any financial gain, including oil exports, port operations, and ancillary industries.
Under the order, the U.S. State Department is tasked with reviewing sanctions waivers related to Iran, particularly those regarding the deep-sea port of Chabahar. The possible rescinding of sanctions waivers related to the port will primarily affect the geoeconomic interests of India, which has been modernizing Chabahar for many years and has spent tens of thousands of dollars on the project. The port plays a critical role in New Delhi’s transport strategy, providing access to the markets of Iran, Afghanistan, and Central Asia while bypassing its main opponent in the region, Pakistan. At the same time, Chabahar is a key link in the supply chain between India and Russia, organized under the International North-South Transport Corridor (INSTC).
In 2018, having obtained sanctions relief from Washington on Chabahar in exchange for refusing to import Iranian oil, India took over the management of the Shahid Beheshti port terminal. In May 2024, Tehran and New Delhi signed a 10-year contract to operate the Chabahar port. An initial agreement between the two countries was first reached in 2016, against the backdrop of the conclusion of a nuclear deal with Iran by the P5+1 – the U.N. Security Council’s five permanent members (China, France, Russia, the United Kingdom, and the United States) plus Germany. Later, Afghanistan joined the Chabahar Agreement, seeking to gain access to sea routes in the Indian Ocean.
Under the updated contract, India intended to invest $370 million to improve Chabahar’s infrastructure. However, restoring the “maximum pressure” campaign on Iran by the United States could derail this plan and threaten the further development of the strategically important transport hub.
New Delhi will likely try to shield Chabahar from a new wave of anti-Iran sanctions, as it did in 2018 during Trump’s first presidency. Indian Prime Minister Narendra Modi likely discussed the issue with Trump during their recent talks in Washington.
The port of Chabahar has direct access to the Indian Ocean, making it a valuable asset for many countries in continental Asia. The facility is involved in the operation of international trade routes connecting Central Asia with the Middle East. The earliest of these was launched in 2016 on the basis of the Ashgabat Agreement. The Central Asia-Persian Gulf transport and transit corridor consists of two parts: one running on the Uzbekistan-Turkmenistan-Iran railway, and the other via sea from the Iranian ports of Bandar Abbas or Chabahar to the Oman coast of the Persian Gulf.
Uzbekistan, a landlocked country, has shown particular interest in the transit potential of Chabahar. Tashkent was granted the right to jointly use the Iranian port in the open ocean. The construction of a logistics center on the Shahid Beheshti terminal is planned, which is expected to boost Uzbekistan’s foreign trade, including with such an economic giant as India. In 2024, trade between Uzbekistan and India reached almost $1 billion. For greater efficiency the parties intend to create a new multimodal corridor, Uzbekistan-Turkmenistan-Iran-India, using the Chabahar port. Other Central Asian countries, such as Kyrgyzstan and Tajikistan, which depend on Uzbek transit for access to sea routes, may join this project in the future.
Iranian ports have also attracted the attention of the Taliban government in Afghanistan. Tensions with Islamabad, caused in part by Pakistan’s tightening policies on Afghan transit cargo, have pushed the Taliban to actively use Chabahar as an alternative to maritime transportation through Pakistan. The Khaf-Herat railway, which Iran has almost completed, will create even more favorable conditions for such a reorientation.
If the activities of the Chabahar port and other Iranian transport facilities are restricted under U.S. pressure, the Central Asian states and Afghanistan would lose a reliable source of transit services and would have to rely solely on Pakistan for access to the southern seas. This will certainly strengthen Islamabad’s position in the international transport system, as well as the geopolitical effect of the China-Pakistan Economic Corridor (CPEC), known as the flagship project of the China’s Belt and Road Initiative (BRI).
Under CPEC, China is sponsoring infrastructure development of Pakistan’s Gwadar port, which is located on the same coastline as Chabahar. These projects are supported by opposing powers India and China, making competition between them inevitable. Containing the development of the Chabahar port through international sanctions will lead to an outflow of goods to Pakistan, benefiting Beijing but harming India by complicating its land route to Central Asia. This development is likely to result in additional freight costs and a slowdown in mutual trade.
Another beneficiary of Pakistan’s growing transit importance could be Uzbekistan, which initiated the creation of the Kabul Corridor (Termez-Mazar-i-Sharif-Kabul-Peshawar railway). The implementation of the $6.9 billion project has been delayed for financial reasons. Perhaps stimulating demand for cargo transport through Pakistani ports could increase its investment attractiveness, accelerating the construction of the Trans-Afghan Railway and expanding opportunities for economic cooperation between Central and South Asia.