Union Budget 2026: No funds for Chabahar port project amid US-Iran tensions
In September last year, the United States announced strict economic sanctions on Iran but granted India a six-month waiver for its participation in the Chabahar project.
PTC News Desk: India has substantially reshaped its overseas development assistance in the Union Budget 2026–27, opting for the first time not to earmark any funds for the Chabahar port project, a move that signals caution amid the reimposition of US sanctions on Iran.
Developed jointly by India and Iran, the Chabahar port is designed to enhance regional trade and connectivity. New Delhi and Tehran have also pushed for the port’s integration into the International North–South Transport Corridor (INSTC), a 7,200-km multi-modal freight network linking India with Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe. In earlier budgets, India had allocated Rs 100 crore annually to the project in Iran’s Sistan-Balochistan province, where it has remained a major development partner.
In September last year, the United States announced strict economic sanctions on Iran but granted India a six-month waiver for its participation in the Chabahar project. That exemption is due to expire on April 26.
Last month, External Affairs Ministry spokesperson Randhir Jaiswal said India is in active discussions with Washington regarding issues related to Chabahar.
According to sources, New Delhi has been weighing alternative approaches to the project following warnings from the Trump administration of an additional 25 per cent tariff on countries engaging in trade with Tehran.