India Dropped from Chabahar Rail Project, Experts Cite Iran-China Proximity

New Delhi: In a setback to Indian Railways, a big-ticket Indian project with one of its oldest allies has run aground as Iran has dropped India from Chabahar rail project, citing funding delay.

India and Iran had signed an agreement to construct a rail line from Chabahar port to Zahedan, along the border with Afghanistan. However, Iran has now decided to go solo for the rail line project that was slated to be carried out with Indian assistance.

The unexpected development comes four years after the two sides had reached an agreement to construct the 628 km long rail line along the Iran-Afghanistan border.

According to railway sources, the preparatory work had already begun and Indian engineers had visited the site many times to construct the rail line. India has already invested $500 million (approximately Rs 3,700 crore) in the Chabahar project,

The development assumes significance as it comes after China has finalised a massive 25-year, $400 billion strategic partnership deal with Iran.

The much-touted railway project, discussed between the Iranian Railways and the Indian Railways Construction Ltd (IRCON), a railways PSU, 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.

In May 2016, during Prime Minister Narendra Modi’s visit to Tehran to sign the Chabahar agreement with Iranian President Rouhani and Afghanistan President Ghani, IRCON had signed an MoU with the Iranian Rail Ministry.

The MoU was to construct the Chabahar-Zahedan railway as “part of transit and transportation corridor in the trilateral agreement between India, Iran, and Afghanistan”. IRCON had promised to provide all services, superstructure work, and financing for the project (around $1.6 billion).

However, Iran has now announced that it will pool from the Iranian National Development Fund to go ahead with the rail line without Indian help. The Railways or IRCON officials declined to comment on the development stating that "the issue is a sensitive one".

Former Indian ambassador to Iran KC Singh has cautioned Indian authorities to observe the Iran-China proximity carefully.

"[The Iran-China deal] impinges on India’s “strategic ties” with Iran and the use of Chabahar port. Jask lies west of Chabahar & right before the Straits of Hormuz. China would thus extend its control along the Pakistan-Iran coast," he wrote in a Twitter post.

Quoting New York Times, he added that if China got access to Iranian city of Jask (supposed entrance to the Persian Gulf), it would give China a strong hand in the sea route for most of the world's oil.

Hitting out at the Bharatiya Janata Party-led government at the Centre, the Congress called it a big loss for the country. Party leader Abhishek Singhvi said in a tweet, “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."

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