'Disappointing for both countries': Iran reacts as India drops funding for Chabahar Port

Iran's Foreign Minister Abbas Araghchi has expressed disappointment over India's decision not to allocate funds this year for the Chabahar Port project, describing the initiative as a strategically important connectivity corridor for both countries.

Speaking in an exclusive interview with India Today, Araghchi said the absence of budgetary support affected not just Iran but India as well. "Well, I think it's a disappointment for both Iran and India," he said.

Also Read | 'Everyone would be replaced through established procedures': Iran says killing Khamenei wouldn't collapse regime

'Golden gateway' for regional connectivity

Highlighting the project's long-term importance, Araghchi referred to earlier remarks by Prime Minister Narendra Modi about the port's strategic value.

"Chabahar, as Prime Minister Modi once said, is a golden gate that connects the Indian Ocean area to Central Asia, the Caucasus, and then to Europe — and vice versa. It is a very strategic port. If fully developed, it can play a very important role in connecting India through Iran to Central Asia, to the Caucasus, and then to Europe," the Iranian minister said.

He added, "That would be the best transit route, I think. I hope that one day we can witness the full development of this port."

Located in southeastern Iran, the Chabahar Port project is aimed at providing India with direct trade access to Afghanistan and Central Asia while bypassing Pakistan. The project has been viewed as a key element of regional connectivity and economic cooperation.

Budget gap amid geopolitical pressures

This year’s Union Budget marks the first time since India signed a development agreement for the port in 2024 that no funds have been allocated. Earlier Budgets had set aside Rs 100 crore annually for the project in Iran's Sistan-Baluchestan province.

Also Read | 'Shaandaar!': PM Modi responds as Israel PM Netanyahu appears in traditional Indian attire to surprise his 'friend'

The decision comes amid renewed tensions between the United States and Iran. In September last year, Washington imposed stricter economic sanctions on Tehran but granted India a six-month exemption for its involvement in Chabahar, set to expire on April 26.

External Affairs Ministry spokesperson Randhir Jaiswal recently confirmed that India continues discussions with the United States regarding issues linked to the project.