India Concerned Over Strategic Investments as Iran-Israel Conflict Escalates

New Delhi: 20 June 2025

Rising hostilities between Iran and Israel have raised alarm bells in New Delhi, placing India’s strategic investments particularly the Chabahar Port and the International North-South Transport Corridor (INSTC) under a potential security cloud. India has invested nearly $550 million in these initiatives, which are vital to its outreach to Afghanistan, Central Asia, and Russia.

While no Israeli strikes have targeted Iranian ports so far, recent reports of attacks on Iran’s coastal regions have intensified India’s concerns over the safety and continuity of its infrastructure projects in the area.

India’s Deepening Strategic Stake in Chabahar

India signed a 10-year agreement in May 2024 to operate the Shahid Beheshti Terminal at Iran’s Chabahar Port. The management of the project is handled by India Ports Global Limited (IPGL), a collaborative effort by the Jawaharlal Nehru and Kandla Port Trusts.

India has invested $85 million in building Chabahar and has also offered a $150 million credit facility through the EXIM Bank. An additional $400 million credit line was offered to support the Chabahar-Zahedan railway project—key for connecting to Afghanistan and further to Central Asia.

Afghanistan’s Dependence and Pakistan’s Calculated Position

Afghanistan, currently dependent on Pakistan’s Karachi port, has shown interest in Chabahar as a vital alternative. The Taliban government is reportedly uneasy about any disruptions to the port’s viability. A weakened Chabahar could tilt regional dynamics in Pakistan’s favor, as it seeks to retain its leverage over Afghan trade.

Regional Diplomacy and the Way Forward

The 19th round of India-Iran Foreign Office Consultations, held in January 2025, saw both nations recommit to advancing their partnership on Chabahar and INSTC. However, should the Iran-Israel conflict escalate further—and especially if global powers like the U.S. become directly involved—India’s projects in the region could face significant headwinds.

Western sanctions on Iran have already slowed project progress, and a worsening geopolitical situation may bring further delays or operational risks.

Private Sector Eyes on Chabahar

Indian private sector giants like the Adani Group and Essar have also shown interest in Chabahar’s logistics potential, highlighting the port’s growing importance in India’s commercial and geopolitical calculus.

Strategic Patience and Policy Agility Needed

Chabahar and the INSTC are not just trade corridors—they are central to India’s long-term regional influence and connectivity strategy. In the current environment, India must employ strategic patience, bolster diplomatic engagement with Tehran, explore contingency routes, and encourage deeper private sector participation to safeguard and stabilize these crucial investments.