Budget skips Chabahar Port allocation amid sanctions
India has not earmarked any funds for the Chabahar port project in the Union Budget, a move that comes amid renewed sanctions imposed by the United States on Iran. The decision marks a departure from India’s consistent annual allocation of around Rs 100 crore to the strategic connectivity project located in Iran’s Sistan-Balochistan province.
India has been a key partner in the development of the Chabahar port, which is seen as a critical gateway for enhancing trade and transit links with Iran, Afghanistan, Central Asia, and beyond. The project has also been jointly promoted by India and Iran as a vital component of the International North-South Transport Corridor (INSTC), a 7,200-kilometre multimodal network aimed at facilitating freight movement across South Asia, the Middle East, Central Asia, Russia, and Europe.
The absence of funding in the latest budget coincides with Washington’s tightening stance on Tehran. In September last year, the US imposed stringent economic sanctions on Iran, while granting India a six-month waiver specifically for its involvement in the Chabahar port project. That exemption is set to expire on April 26, adding to uncertainty around India’s future engagement.
External Affairs Ministry spokesperson Randhir Jaiswal had stated last month that India remains in dialogue with the United States on issues related to the Chabahar project. However, it is understood that New Delhi has been evaluating its options after the Trump administration warned of an additional 25 per cent tariff on countries continuing business dealings with Iran.
Despite the budgetary pause, Chabahar continues to hold strategic importance for India as it offers an alternative trade route that bypasses Pakistan and strengthens regional connectivity.
Whether the lack of allocation signals a temporary recalibration or a longer-term policy shift is likely to depend on evolving geopolitical dynamics and the outcome of discussions with Washington.
