Iran Chooses China Over India On Long Term Rail Road Partnership

Last updated on February 14th, 2023 at 12:40 pm

Iran has decided to sideline India and move ahead to implement its plans to lay down a rail line that it had initially planned to build with India along the border of Afghanistan.

The Iranian government has decided to go solo, owing to reasons of delay in funds from the Indian side in starting the project. The strategic partnership was signed in 2016 to construct a rail line from Chabahar port to Zahedan in Iran. Economists believe this could be due to China’s plans to tie up with Iran over a 25 year long massive $400 billion investment deal with Tehran.

The railway project, which was being discussed between the Iranian Railways and the state-owned Indian Railways Construction Ltd (IRCON), was meant to be part of India’s commitment to the trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia. As a part of the trilateral agreement, IRCON would have provided all services, superstructure work and financing for the project (around $1.6 billion).

Iran has already started work on the project and plans to complete in by 2022. On its part, India could not resume work due to apprehensions that it would attract the possible wrath of the US. Washington has been systematically sanctioning and bullying nations that have been in any kind of trade with Iran.

While it is confirmed that the US had provided sanction waivers in this particular case, India was still lagging behind in timelines as it found it difficult to find the right kind of equipment suppliers, which he felt would primarily be American companies only.

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As Iran starts off on its own, India still has hopes of joining in at a later stage.  Meanwhile, Iran is closing in a huge deal with China where both nations enter into a 25-year Strategic Partnership. This synergy will see Chinese involvement in Chabahar’s duty free zone, an oil refinery nearby, and possibly a larger role in Chabahar port as well. In such circumstances, India’s participation is something that might enrage China, owing to the fact that the vibes between Beijing and New Delhi have not been extremely disturbed. India is concentrating all its efforts right now, in re-kindling its economy post a 90 day lockdown period which has pushed the migrant population back to native villages.  Focus is on state employment and green energy efficiency for rainier days to come ahead.