New Delhi: One of India’s most ambitious outreach projects, involving an investment of $120 million, is starting to suffer due to the ongoing Middle East crisis.
The Ministry of External Affairs (MEA) has acknowledged that the war is a “complicating factor” as it holds talks with both Washington and Tehran over options to safeguard its investment in Iran’s Chabahar port.
“This issue is under discussion with both Iran and US,” MEA spokesperson Randhir Jaiswal said in a statement on Monday. “Obviously, the current conflict is also a complicating factor,” he added, as reported by The Print.
In 2024, New Delhi signed a 10-year contract with Iran’s Port and Maritime Organization, seeking to develop Chabahar as an alternative gateway to ship goods to Afghanistan and Central Asia, bypassing Pakistan. The US gave India a sanct
ions waiver in 2018 to operate at the port. That exemption was revoked in September 2025. However, after much lobbying from New Delhi, a waiver was given until April this year.
Had things been normal, the sanctions waiver may have been extended. However, with tensions rising between the US and Iran, this now seems unlikely, Bloomberg News reported earlier this month, citing people familiar with the matter.
The report said that India is now mulling a range of options, including a possible temporary divestment from the port. However, India doesn’t want to completely exit the port, since there are plans to expand connectivity at the harbor through a rail link.
India is now attempting a balancing act. Relations with the US hasn’t been at its best since Donald Trump took over for the second term. New Delhi, however, shares long-standing relations with Iran.
The Middle East war that started on February 28, added a new layer of complexity in US-India relations. While Trump has ordered a naval blockade of the Strait of Hormuz to force Tehran to the negotiating table, India – which is heavily reliant on energy supplies through the narrow passage – has been negotiating separately with Iran to allow its tankers to pass.