Iran drops India from Chabahar Rail Project citing ‘delay in funds from the Indian side’

Iranian government has made a decision to move ahead on its own

Citing ‘delays from the Indian side’ in funding and initiating the project four years after an agreement was signed, the Iranian government has made a decision to move ahead with the construction of rail line from Chabahar port to Zahedan, along the border with Afghanistan, on its own.

According to a report by a Delhi based newspaper The Hindu, The Iranian Railways will proceed without any assistance from India, aiming the completion of the project by project by March 2022.

Approximately $400 million from the Iranian National Development Fund will be used for the same.

As Iran finalises a sweeping 25-year economic and security partnership with China worth $400 billion, it has decided to drop its partnership with India. The partnership is aimed at vastly expanding Chinese presence in banking, telecommunications, ports, railways and dozens of other projects.

According to an Iranian official and an oil trader, China would in exchange receive a regular, heavily discounted supply of Iranian oil over the next 25 years.

An 18-page document detailing the proposed agreement also describes ‘deepening military cooperation, potentially giving China a foothold in the region’.

The agreement could possibly miff India’s prospects in the region. The railway line was finalised in May 2016, during Prime Minister of Inia Narendra Modi’s visit to Tehran to sign the Chabahar agreement with Iranian President Rouhani and Afghanistan President Ghani.

It was part of India’s commitment to the trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia.

Government-owned Indian Railways Construction Ltd (IRCON) had promised to provide all services, superstructure work and financing for the project (around $1.6 billion), the report said.

However, India never started the work on the railway line despite several site visits by IRCON engineers with US imposing sanctions on Iran.

While the US had given a sanctions waiver for the Chabahar port and the rail line, India found it difficult to find equipment suppliers ‘due to worries they could be penalised by the US’, the Hindu reported.

The Ministry of External Affairs and IRCON have declined to comment on the issue, the report added.

On this, the opposition party Indian National Congress has taken a dig at Narendra Modi led government, stating that it is a big loss for India.

“India dropped from Chahbar Port deal. This is the diplomacy of the Modi Govt that won laurels even without getting the work done, China worked quietly but gave them a better deal. Big loss for India. But you can’t ask questions! (sic),” the congress spokesman Abhishek Singhvi tweeted.


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