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Iran withdraws from chabahar rail project

Iran has been decided to move ahead with the construction of a railway line from the Chabahar port to Zahedan that without any assistance from India because of a delay in funding. India has been dropped around four years after the project was finalized as part of a broader trilateral agreement as well.

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Briefly, According to a report published in The Hindu, the entire project would be completed by 22nd March, and also will around $400 million will be sanctioned by the Iranian National Development Fund for the project. The project, that however, will be completed without any assistance from India as well.

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Additionally, The railway line project was the part of India’s commitment to the trilateral agreement along with Afghanistan and also Iran to build an alternate trade route to Afghanistan as well as Central Asia.

The deal was finalized during Prime Minister Narendra Modi’s visit to Tehran in 2016 after he signed an agreement with the Iranian President Hassan Rouhani and Afghanistan President Ashraf Ghani.

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Indian Railways Construction Ltd (i.e.vIRCON) had promised assistance to the railway line project besides the financing worth $1.6 billion. However, the work was never even started as the United States imposed sanctions on Iran also.

Iran-China deal connection
The deal between Iran and with China —that if finalized — which could result in a vast expansion of the Chinese presence in various sectors of Iran which including banking, telecommunications, ports, railways, and numerous other projects.

In return, China will receive a heavily discounted supply of Iranian oil regularly for the next around 25 years. An 18-page document listing the proposed agreement that also talks about deeper military cooperation as well.

Considering that Iran has been an important strategic ally for New Delhi, the deal can hurt India’s prospects in the region, especially at a time when its relations with China have been soured further in the aftermath of the recent border standoff.

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