Iran dismisses India from Chabahar Railway Line Project as it is close to complete the China deal, owing to delays in financing.

Authorities stated that the Iranian Railways will move ahead without support from India and will use almost $400 million from the Iranian National Development Fund for completing the project.


The Iranian government is determined to proceed with the construction of rail line from Chabahar port to Zahedan, alongside the border with Afghanistan, by themselves as it indicated latencies from the Indian side in financing and commencing with the project four years following the conclusion of an agreement.


By March 2022, the whole project would be concluded and the Iranian Railways will move forward without support from India and will use nearly $400 million from the Iranian National Development Fund, The Hindu stated.


Iran’s decision to dismiss the association with India comes as it terminates a sweeping 25-year economic and security association with China worth $400 billion. This union would exceedingly magnify Chinese presence in banking, telecommunications, ports, railways, and numerous other projects.


As stated by an Iranian official and an oil trader, in return, China would obtain a regular hugely discounted supply of Iranian oil throughout the forthcoming 25 years. An 18-page document elaborating on the proposed contract even outlines the deepening of military association,  potentially providing China a foothold in the province.


This contract is possible to hurt India’s possibilities in the region. The railway line was concluded in May 2016 in the course of Prime Minister Narendra Modi’s visit to Tehran to sign the Chabahar agreement with Rouhani Iranian President and Ghani Afghanistan President. 


It was a piece of India’s commitment to the trilateral agreement within India, Iran, and Afghanistan to construct an alternate trade route to Afghanistan and Central Asia. Government-owned Indian Railways Construction Ltd (IRCON) had pledged to supply all services, superstructure work, and funding for the project (around $1.6 billion).


Despite that, with the US thrusting permits on Iran, India never began with the work on the railway line even though various site visits by IRCON engineers.


The Hindu informed that although the US had provided a sanctions waiver for the Chabahar port and the rail line, India struggled to locate equipment suppliers as India was concerned about being penalized by the US. The Ministry of External Affairs and IRCON has denied to comment on this matter.  


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