Chabahar Debt Settled: India Fulfills $120M Iran Port Pledge

The government has informed Parliament that India has fully paid its $120 million commitment for the development of Iran’s Chabahar port, well ahead of the expiry of the U.S. sanctions waiver in April 2026.

The disclosure comes shortly after the Union Budget for 2026–27 made no fresh allocation for the project, raising questions about India’s future engagement at the strategically important port. In a written reply in the Lok Sabha, the Ministry of External Affairs (MEA) said the payment fulfilled India’s obligations under a 10-year memorandum of understanding signed with Iran in May 2024.

“India has fulfilled its commitment of contributing USD 120 million for the procurement of port equipment,” the MEA said.

The Ministry added that following discussions with Washington, the United States had issued guidance extending the conditional sanctions waiver for the Chabahar project until April 26, 2026. “The Government of India remains engaged with all concerned in order to address the implications of these developments,” it said.

The response came in reply to questions from Congress MP Manish Tewari, who sought clarity on whether the government was scaling down its involvement in the project or withdrawing Indian personnel from the port. Mr. Tewari accused the government of acting prematurely and “officially giving up” on the warm-water port project on Iran’s southeastern coast, which India began developing in 2003.

Iran’s Ambassador to India, Mohammad Fathali, said New Delhi has not yet communicated its plans regarding future management of the port. He expressed the view that India would seek to resolve the issue without compromising its strategic interests in Chabahar, which has been critical for India’s access to Afghanistan for humanitarian assistance and food supplies.

The government’s statement, coming soon after the withdrawal of budgetary support for the project, suggests that India’s continued operations at the port may be constrained unless U.S. sanctions are lifted. Officials indicated that by disbursing the full committed amount in advance, the government may have sought to pre-empt complications arising from a prolonged sanctions-related process.

Mr. Tewari said the Chabahar port could have played a significant role in strengthening India’s engagement with Afghanistan and maintaining access to Central Asia, particularly at a time when the U.S. and Iran have resumed talks in Oman to ease tensions. U.S. President Donald Trump has warned of major action against Iran, even as Washington has also threatened India with steep tariffs if it continues trade with Tehran.

India has not imported crude oil from Iran since 2019–20, when it halted purchases amid earlier sanctions pressures, and has not resumed imports since.

News by Rahul Yelligetti.