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Iran drops India from Chabahar rail project

Topics Covered: India and its neighbourhood- relations.

Iran drops India from Chabahar rail project

Iran has decided to move ahead with the construction of a railway line from Chabahar port to Zahedan without any assistance from India due to delay in funding.

What’s the issue?

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

  • The deal was finalised during Prime Minister Narendra Modi’s visit to Tehran in 2016.

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

  • While there was a waiver on US sanctions for the specific railway line project, India found it hard to pick equipment suppliers who were worried about possible action from the US.

Concerns for India:

The development comes at a time when Iran is seeking to finalise a 25-year economic and security partnership with China. The deal is worth $400 billion.

  • The deal between Iran and China — if finalised — could result in a vast expansion of Chinese presence in various sectors of Iran including banking, telecommunications, ports, railways and numerous other projects.

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

Where is Chabahar Port?

Located on the Gulf of Oman and is the only oceanic port of the country. 

Why Chabahar port is important for India?

  1. With this, India can bypass Pakistan in transporting goods to Afghanistan.
  2. It will also boost India’s access to Iran, the key gateway to the International North-South Transport Corridor that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
  3. It also helps India counter Chinese presence in the Arabian Sea which China is trying to ensure by helping Pakistan develop the Gwadar port. Gwadar port is less than 400 km from Chabahar by road and 100 km by sea.
  4. From a diplomatic perspective, Chabahar port could be used as a point from where humanitarian operations could be coordinated.

InstaLinks:

Prelims Link:

  1. Location of Chabahar Port.
  2. What is INSTC?
  3. Gulf of Oman.
  4. Zahaden.
  5. Countries in the Indian Ocean region.

Mains Link:

Discuss why Chabahar port is significant for India.

Sources: the Hindu.