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July 15, 2020

Iran drops India from Chabahar rail project

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July 15, 2020

NEW DELHI: The Iranian government has decided to go ahead with the rail line project from the Chahbahar port to Zahedan on its own, four years after it inked a deal with New Delhi to begin this project along the border of Afghanistan.

The Iranian government has cited a delay in funding from the Indian side to initiate the 628-km-long project as the reason for it dropping India from the multi-million dollar project.

According to Indian publication The Hindu, the country will now use around $400 million from the Iranian National Development Fund, instead of relying on financial assistance from India.

The railways project, which will be completed by March 2022, witnessed the inauguration of its track-laying process by Iranian Transport Minister Mohammad Eslami last week. The blow to India comes in the backdrop of China finalising a huge $400 billion strategic partnership deal with Iran.

Indian Congress party called it a “big loss” for the country even as it questioned the diplomatic tactics of the Centre. “India dropped from Chahbar Port deal. This is the diplomacy of the Modi government 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!” senior Congress leader Abhishek Manu Singhvi tweeted.

In 2017, Iran opened on a $1-billion extension of its southeastern Chabahar port, competing with a nearby Pakistani port (Gwadar), to strike a strategic deal with India. The railways project is also a part of the port deal.

Indian Prime Minister Narendra Modi had hoped the project would help in reaching landlocked Afghanistan and Central Asia via the southern Iranian port of Chabahar. India had committed $500 million to the Chabahar port on the Gulf of Oman which is Iran’s closest to the Indian Ocean and would allow it to bypass rival Pakistan.

Earlier, The New York Times reported that China and Iran are reported to have quietly drafted a comprehensive military and trade partnership. The deal would make way for about $400 billion worth of Chinese investments into Iran’s key sectors, such as energy and infrastructure, over the next 25 years.

According to US officials, the agreement could also make way for Chinese military bases in Iran, fundamentally changing the region’s geopolitics. An 18-page draft of the proposed agreement talks about expanding Chinese presence in Iran’s “banking, telecommunications, ports, railways and dozens of other projects”. In return, Iran is to provide regular and “heavily discounted” supply of oil to China for 25 years.In the strategic realm, the proposed draft talks about deepening military cooperation, with “joint training and exercises”, “joint research and weapons development”, and intelligence sharing.