India was kicked out of key Iran railway project as China finalizes a $400 billion deal with Iran. Iran said that India was delaying funding.
The unexpected development comes four years after the two sides had reached an agreement to construct the 628 km rail line along the Iran-Afghanistan border.
Iran's decision to cancel India's participation in the project is coming in the backdrop of a fast-moving strategic deal with China. China and Iran are giving final shape to a colossal partnership package worth $400-billion, to be spread over the next 25 years.
Iran's 1350-Kilometer eastern railway is strategically important Iran that will connect Chabahar, Iran's only major port on the Indian Ocean, to Afghanistan and Central Asia with a potential to carry seven million tons of goods per year.
The $1.6 billion contract for the railways was signed during the 2016 visit of Indian Prime Minister Narendra Modi to Tehran.
India would have circumvented Pakistan and export its goods to Afghanistan and Central Asia via Chabahar.
According to the Hindu, "Last week, Iranian Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process for the 628 km Chabahar-Zahedan line, which will be extended to Zaranj across the border in Afghanistan.
Officials told the Hindu that the entire project would be completed by March 2022, and that Iranian Railways will proceed without India's assistance, using approximately $400 million from the Iranian National Development Fund."
The Hindu added that "the development comes as China finalizes a massive 25-year, $400 billion strategic partnership deal with Iran, which could cloud India's plans."
The Hindu also pointed out that U.S. sanctions may have also contributed to pushing India out of the project.
The report added that despite surveys made by Indian engineers, the Indian Tracks Company did not take measures to start the project fearing the consequences of U.S. sanctions.
The daily quoted an Indian official as saying the United States has granted sanction waiver for this project, but under the sanctions, the Indian company found it difficult to supply equipment for the project. Nevertheless, the company says it might join the project again later.
The Economic Times opined that "Iran's decision to cancel India's participation in the project, coming at the backdrop of a fast-moving strategic deal with China, could soon whip up a storm in diplomatic circles.
The New York Times has reported that China and Iran have prepared a far-reaching commercial agreement that would offer Iran $400-billion in investment over 25 years in return for selling China a large proportion of the oil it produces over the same period.
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