The decision, which is part of Washington's "maximum pressure" campaign against Tehran, will have an impact on Indian trade

The US has decided to revoke the 2018 sanctions-waiver it gave to India for its operations at Iran's Chabahar Port.

This decision, announced on Tuesday, under the Iran Freedom and Counter-Proliferation Act (IFCA), is a part of Washington's "maximum pressure" campaign against Tehran and it takes effect from September 29. 

"Once the revocation is effective, persons who operate the Chabahar Port or engage in other activities described in IFCA may expose themselves to sanctions under IFCA", the US State Department said in a statement.

In February Washington passed an executive order to exert "maximum economic pressure" to "impose sanctions on the Iranian government, aiming to restrict its access to funds, including those generated through oil exports, ports, and related businesses."

The revocation will have an impact on India's trade as New Delhi sees Chabahar as a potential gateway to Afghanistan, Central Asia and the Caucasus.

In 2024, India and Iran signed a deal that allows India to equip and operate the Shahid Beheshti terminal at Chabahar port for the next decade. The port was conceived as a strategic hub for the International North-South Transport Corridor (INSTC), developed by India, Iran, and Russia as an alternative shipping route to the Suez Canal.

The INSTC originates in Mumbai, traversing through Iran's Bandar Abbas, Bandar-e-Anzali, and Chabahar, before crossing the Caspian Sea to reach Astrakhan in southern Russia. It then connects to Moscow and St. Petersburg via rail and road links. Another extension of the corridor links India with Armenia via Iran.

A few days after the February announcement, India pledged continued support for its joint project with Iran at Chabahar Port. Speaking at an event in February to mark the 46th anniversary of the Islamic Revolution of Iran, Jaideep Mazumdar, a high-ranking official of the Indian foreign ministry described regional connectivity as a "crucial" aspect of relations.

He added that the development of the Chabahar deepwater port is a key example of the two countries' "shared vision for mutual benefit through connectivity."