Golden Gate

Few stretches of coastline are as geopolitically freighted as the one around Iran’s Chabahar port. At the mouth of the Gulf of Oman, overlooking the Strait of Hormuz, the Shahid Beheshti terminal has long been coveted as a maritime gateway to landlocked Afghanistan and Central Asia. For India, which has invested heavily in the project, Chabahar - long called the ‘Golden Gate - represents both a lifeline and a lever: a way to bypass hostile Pakistan, expand trade into Eurasia and counter China’s inroads through Pakistan’s Gwadar port. For Washington, however, the calculus has shifted.

On September 29, the Trump administration will revoke the sanctions waiver that had shielded Chabahar since 2018. From then on, anyone involved in operating, financing or servicing the terminal will face the same Treasury restrictions as other Iranian entities. This decision, framed as part of Trump’s “maximum pressure” campaign on Tehran, will reverberate far beyond Iran’s shores.

The origins of India’s involvement go back decades. As early as 2001, Atal Bihari Vajpayee’s government signed accords with Tehran to develop the port. Plans faltered when George W. Bush cast Iran as part of an “Axis of Evil,” making partnership toxic. But India returned to the project with fresh vigour in subsequent years, culminating in a 2024 deal under Joe Biden’s administration that gave India Ports Global Ltd a ten-year lease to equip and operate Chabahar. That agreement included $120m in promised investment and a $250m line of credit. India has already supplied cranes and other gear. Chabahar has also served humanitarian purposes, such as the supply of vaccines during the pandemic and pesticides to Iran during locust infestations.

In 2018, when America grudgingly allowed Chabahar to function, the rationale was Afghanistan: then run by an elected government, the country needed reliable access to supplies. That logic, Washington argues, no longer applies. Since the Taliban’s takeover in 2021, the port’s role in reconstruction has evaporated. What remains, in the eyes of Mr Trump’s officials, is a revenue stream for Tehran’s regional mischief-making.

Yet the collateral damage will hit India. New Delhi is not only exposed financially - as millions already sunk into port infrastructure are now at risk - but strategically as well. Chabahar is a node in the International North-South Transport Corridor, a route meant to tie the Indian Ocean to northern Europe via Iran, the Caspian and Russia. Undermining this project diminishes India’s reach into Eurasia, just as Beijing expands its Belt and Road network. With Gwadar less than 200 km away, China gains from any weakening of India’s position.

This comes at a time when relations between New Delhi and Washington are already strained over Trump’s punitive tariffs on Indian exports. For the Modi government, which has tried to balance its relations with both Iran and America, the revocation forces a stark choice: risk American ire by persisting at Chabahar, or retreat and cede the field to rivals.

For years Washington urged India to play a bigger role in stabilising Afghanistan and diversifying regional supply chains. Chabahar was the instrument for precisely that ambition. By suddenly rescinding the waiver, America not only hurts India but also narrows its own options in South and Central Asia. Afghanistan, now under Taliban rule, remains isolated. Central Asian republics, meanwhile, increasingly tilt towards Russia and China for connectivity. Washington may weaken Iran, but it inadvertently strengthens Beijing.

India’s room for manoeuvre is limited. Yet it cannot abandon Iran as Chabahar remains the only viable overland route to Afghanistan and Central Asia that bypasses Pakistan. New Delhi may try to lobby Congress or the State Department to restore a carve-out, citing the port’s humanitarian role. Failing that, it could seek creative workarounds. But any such moves would be fraught with risk.

For Iran, the sanctions cut both ways. Tehran wants Indian investment to offset its economic isolation. It also values India as a counterweight to China’s growing dominance. If India retreats, Iran may have little choice but to lean harder on Beijing, deepening the very dependency New Delhi fears.