In a decision that could negatively impact India’s strategic interests, US President Donald Trump has ordered his administration to revoke the ‘sanctions waivers’ for Iran’s Chabahar port.

Previously, the US had exempted the modernisation of Chabahar port from sanctions, recognising its importance as a gateway for India to send humanitarian aid to Afghanistan. In November 2018, Trump granted India a limited waiver to develop the port, enabling access to Afghanistan while avoiding Pakistan. The White House issued a "Presidential National Security Memorandum" outlining several steps to deal with Iran.

“The Secretary of State – Marco Rubio — shall modify or rescind sanctions waivers, particularly those that provide Iran any degree of economic or financial relief, including those related to Iran’s Chabahar port project,” reads the memorandum. This is terrible news for India. In May last year, India and Iran signed a 10-year agreement to further develop the Chabahar port. The goal was to make it a key trade hub, improving India's connectivity with Afghanistan, Central Asia, and Eurasia. To equip the port, India Ports Global Ltd (IGPL) was entrusted with investing about $120 million.

Additionally, India extended an offer to Iran to credit $250 million for infrastructure development related to Chabahar. IPGL and the Ports & Maritime Organisation of Iran (PMO) have inked a contract that calls for IPGL to further equip and run the port for the next ten years, after which the two organisations would continue to work together in Chabahar. Chabahar is a deep-water port in Iran's Sistan-Baluchestan province. It is the nearest Iranian port to India and is located on the open sea, making it easily accessible and safe for large cargo ships.