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India dropped from Iran’s Chabahar railway project

July 15, 2020 at 12:57 pm

Iranian flags flutter. [ATTA KENARE/AFP/ Getty]

Iran has reportedly decided to proceed with construction of the Chabahar railway project without India’s assistance citing a funding delay from New Delhi and will instead tap into approximately $400 million from its National Development Fund, according to the Hindu newspaper.

The construction agreement was signed four years ago between the two countries to construct a rail line from Chabahar – Iran’s only oceanic port to Zahedan, along the Afghan border. The port was opened in 2017 and connects Iran with India and Afghanistan bypassing Pakistan.

The track-laying process for the 628 kilometre line was inaugurated last week by Iran’s Transport and Urban Development Minister, Mohammad Eslami. According to officials, the project is expected to be completed by March 2022.

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The move is seen as a setback for India as Chabahar was intended as a strategic response to the China-Pakistan Economic Corridor (CPEC). The move also comes amid China’s economic and security partnership deal with Iran worth $400 billion, which once signed and approved by parliament will grant China heavily discounted oil over the next 25 years in exchange for investment in various sectors and offers Tehran a line-life in the face of economic pressure caused by US sanctions.

However the Times of India reported today that New Delhi has refuted Iran’s claims that it is no longer a partner in the railway project, with senior Indian officials saying that India remains “committed” to financing and building the railway. Iran’s PressTV meanwhile says that India has been hesitant in becoming actively involved over the threat of US sanctions.

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