New Delhi has said it is in dialogue with Washington amid reports it could exit the Chabahar port project

The Indian Foreign Ministry said on Friday that it "remains engaged" with Washington over the port of Chabahar in Iran, which has been sanctioned by the US.

The ministry was responding to reports that it could have to give up its role developing Chabahar in light of US sanctions, as well as political developments in Iran.

The Chabahar project has been facing US restrictions since 2012, although New Delhi secured a waiver in 2018 to be part of the development, which is viewed as vital for expanding its trade with Russia, Central Asia, and Afghanistan. The waiver was revoked last year, but India received an extension.

"As you are aware, on October 28, 2025, the US Department of the Treasury had issued a letter outlining the guidance on the conditional sanctions waiver valid till April 26, 2026. We remain engaged with the US side in working out this arrangement," Indian Foreign Ministry Spokesman Randhir Jaiswal said.

Earlier on Friday, the Economic Times (ET) reported that before Washington reimposed the sanctions, India transferred the funds to Iran to "liquidate its financial commitment" for developing the Shahid Beheshti terminal at Chabahar. India and Iran inked a ten-year deal for the development and operation of the terminal in 2024.

"When the sanctions are reimposed, transfer of funds would have become difficult. So, before the sanctions came, all the funds ($120 million) were transferred to Iran," ET quoted an unnamed government source as saying.

Another source allegedly told ET that India has "no choice but to exit the Chabahar port, unless the sanctions are eased by the US again."

The US temporarily waved sanctions for India after New Delhi provided plans to wind down all activities there, according to the ET report.

Chabahar, situated on the Gulf of Oman in southeastern Iran, is strategically located and is part of the International North-South Transport Corridor (INSTC), a shipping route developed by India, Iran and Russia, as an alternative to the Suez Canal.

Iran has been gripped by riots since late December, triggered by persistent inflation and a sharp dive in the value of the Iranian rial. Tehran insists that what began as a legitimate airing of economic grievances quickly spiraled into a quasi-insurrection, with foreign agents allegedly arming violent rioters.

Earlier this month, US President Donald Trump said any country doing business with Iran will face a 25% tariff, escalating his pressure campaign to isolate the Islamic Republic amid the unrest.