NEW DELHI — In a high-stakes diplomatic balancing act, the Government of India is exploring aggressive “workaround” options to safeguard its operations at Iran’s Chabahar Port. On Friday, January 16, 2026, officials confirmed that New Delhi is in deep negotiations with Washington to extend a conditional sanctions waiver that is set to expire on April 26, 2026.
The pressure has intensified following US President Donald Trump’s recent social media announcement of a “final and conclusive” 25% tariff on any country doing business with Iran—a move that coincides with a severe crackdown on anti-government protests within Iran.
1. The “Safety Net” Strategy: Insulating Officials
To prevent the US Treasury from targeting Indian bureaucrats personally, the government has already initiated a tactical retreat of personnel:
- Mass Resignations: All Indian government officials serving on the board of India Ports Global Limited (IPGL)—the state-owned entity managing the Shahid Beheshti terminal—have resigned.
- New Operational Entity: New Delhi is considering forming a “shadow” or “special purpose” entity to manage the port. This new body would be designed to function without exposure to the US financial system, theoretically shielding the Indian government from secondary sanctions.
2. Trump’s “25% Tariff” vs. Strategic Reality
While Trump’s Truth Social post sent shockwaves through global markets, the Ministry of External Affairs (MEA) is projecting a calm front:
- Minimal Trade Exposure: India’s trade with Iran for 2024-25 stands at roughly $1.68 billion—merely 0.15% of India’s total global trade.
- Oil Factor: India has not imported Iranian crude since May 2019, significantly reducing its vulnerability to energy-linked sanctions.
- The “Guidance” Letter: MEA spokesperson Randhir Jaiswal noted that India is currently working within the framework of an October 2025 “guidance letter” from the US Treasury, which provided a temporary six-month breathing room.
3. Why Chabahar is “Non-Negotiable” for India
Despite the friction, India remains committed to the $120 million long-term agreement signed in May 2024. The port serves three critical pillars:
- The Pakistan Bypass: It is the only viable route for India to reach Afghanistan and Central Asia without crossing Pakistani territory.
- The INSTC Node: Chabahar is a cornerstone of the 7,200-km International North-South Transport Corridor connecting Mumbai to St. Petersburg.
- Strategic Counterweight: It remains India’s answer to China’s presence at the Gwadar Port in Pakistan, just 170 km away.