Why Iran removed India from Chabahar Railway Line Project

Iran has decided to move ahead with the construction of railway line project linking Chabahar port to Zahedan city, along the border with Afghanistan on its own as it has questioned India for delaying the project four years after an agreement was signed. Reportedly, the entire project would be completed by March 2022 and Iran will proceed without any help from India and will use approximately $400 million from the Iranian National Development Fund.

Iran has also signed a 25-year economic and security partnership with China worth $400 billion at at time when India and China almost came at the brink of a war. The partnership will include China’s participation in Chabahar’s duty free zone, it may also lead to a larger role for chinese in Chabahar port as well. This would massively increase China’s presence in different sectors like banking, telecommunications, ports, railways and others. China would receive heavily discounted supply of Iranian oil over the next 25 years. A multiple page document also clearly states the  proposed agreement and describes the increased military cooperation, potentially giving China a foothold in the region.

This is a big blow to the Narendra Modi Government and the opposition party, the Congress on Tuesday called it a big loss for India and also questioned the diplomatic tactics of the Central Government. Senior Congress Leader Abhishek Manu Sanghvi  targeted the BJP government via a tweet. He showed anger on the country being dropped from Chabahar Port project and raised questions over the diplomacy of the Modi government that won laurels even without getting the work. He further added that it was a big loss and China on the other had quietly got the deal.

The partnership between China and Iran could hurt India’s prospects in the area. In May 2016, PM Narendra Modi’s had visited Tehran to sign the Chabahar agreement with Iranian President Rouhani and Afghanistan President Ghani.  Earlier, there was a trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia. Indian Railways Construction Ltd (IRCON) which is owned by the Government of India had promised to provide all services, superstructure work and financing for the project.

Since the United States 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.  India could never start the work on the railway line despite several site visits by IRCON engineers. Chabahar holds immense strategic and economic importance for India and is not located far from Pakistan’s Gwadar port.

It gives India access to Iran and Afghanistan. Apart from moving goods and equipment bound for Afghanistan, for India, it is also a trade link to lucrative markets in Central Asia and beyond. So, not only is an Iranian port helping the US rebuild Afghanistan, but it is also helping India as a counter to Chinese and Pakistani influence in the region.

Transport Minister of Iran Mohammad Eslami had inaugurated the track-laying process for the Chabahar-Zahedan line, which will be extended to Zaranj across the border in Afghanistan a week ago. According to the report, the project is expected to be completed by March 2022 and the government will tap into a $400 million corpus from the Iranian National Development Fund.

Earlier, Iranian Foreign Minister Mohammad Javad Zarif had talked upon the importance of completing the Chabahar-Zahedan rail network during his visit to the country in the month of january. He had said that connecting Chabahar to Afghanistan and to Central Asia through rail was an important issue to be discussed it should be on priority to complete the Chabahar-Zahedan rail network. He had said that they had the infrastructure for that, but needed rails. At that he had talked about negotiating and stressed that Iran and India need to work together on procurement of equipment for the port as well as finishing the rail link.

Chabahar is the only seaport Iran has in Balochistan province by the Gulf of Oman and consists of two ports with five berths each. Pakistan’s Gwadar port is being developed with the Chinese investment and this port is counter for that. The port was inaugurated in December 2017 and turned out to be a new strategic route connecting Iran with India and Afghanistan by passing Pakistan. In December 2017, India took over the operations of port and commissioned the second port later, leading to the country’s maritime entry into a foreign land.

Trump’s attempts to try and corner Iran is pushing Tehran to build alliances with China. Large oil suppliers such as Saudi Arabia recognize China’s place in the global disorder playing out. For India, going forward after the almost-war like situation with China in Ladakh, India had to take side of United States. Now, the Iran – China strategic partnership would be of vital interest to India not only as part of its relations with Tehran, but more importantly as as China would be looking to control Indian Ocean  and also looking to connect Gwadar, Djibouti and talk about permanent military support and arrangement with Iran. Chabahar port, with road and rail links through Iran, offers a more secure alternative route to Gwadar port in Pakistan, operated by the Chinese.

Now, with United States and China are also not in good terms of late and with this China-Iran deal, it remains to be seen how the Trump administration reacts in the near future and if China thinks of any other big deal with Iran. For now, India may made United States happy but losing such a key project of such strategic significance is a serious matter of concern especially with India’s continous tense situation with Pakistan and China and advantage it loses to keep China and Pakistan in check in the region.