Budget 2026: No allocation for Chabahar port project in Union Budget

New Delhi: In a departure from the past, India has not allocated any funds for the Chabahar port project in its Union Budget, a move that came against the backdrop of Washington's fresh sanctions on Iran.

In the last few years, India has been making an annual outlay of Rs 100 crore to the mega connectivity project in the Sistan-Balochistan province in Iran's southern coast. India is a major partner in development of the Chabahar port.

In September last year, the US imposed crippling economic sanctions on Iran but had granted India a six-month exemption from the punitive measures on the Chabahar port project.


The waiver will come to an end on April 26.

Last month, External Affairs Ministry spokesperson Randhir Jaiswal said New India is engaged with the US on the issue related to the Chabahar port project.

It is learnt that India was mulling various options relating to the project after Trump administration threatened a 25 per cent additional tariff on countries doing business with Tehran.

The Chabahar port is being developed by India and Iran to boost connectivity and trade ties. Both the countries are also strongly pitching for making Chabahar port an integral part of the International North-South Transport Corridor (INSTC).

The INSTC is a 7,200-km-long multi-mode transport project for moving freight among India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.

Chabahar has been positioned as a cornerstone of India’s outreach to Afghanistan and Central Asia, and has been used in recent years to ship humanitarian aid, including food grains and medical supplies.

The port could play a larger role in regional logistics, with plans to link it to the International North-South Transport Corridor (INSTC), opening up trade routes to Central Asia, Russia and beyond.

Moreover, countries such as Uzbekistan have shown interest in using Chabahar as an alternative trade gateway, particularly as landlocked economies look to reduce dependence on existing routes dominated by China’s Belt and Road Initiative. Russia, too, has explored the possibility of routing some of its trade with India through Chabahar via Central Asia, adding to the port’s strategic weight.

With inputs from PTI