Report: Iran Drops India from Rail Project after Tehran Inks $400 Billion China Deal

Iran Railroad
Abbas Tehrani/Unsplash

Iran reportedly dropped India from a major railway project amid reports China has finalized a 25-year, $400 billion “strategic partnership deal” with the Islamic Republic, Radio Farda reported Tuesday.

Strategically important for Iran, the 840-mile eastern railway would “connect Chabahar, Iran’s only major port on the Indian Ocean, to Afghanistan and Central Asia with [the] potential to carry seven million tons of goods per year.”

The rail line would have allowed India to “circumvent Pakistan and export its goods to Afghanistan and Central Asia via Chabahar,” according to the report.

The Hindu reported that “last week, Iranian Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process for the 390-mile 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 Indian newspaper revealed.

“[T]he development comes as China finalizes a massive 25-year, $400 billion strategic partnership deal with Iran,” the Hindu added.

“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,” India’s Economic Times predicted Wednesday.

Previously one of Iran’s most significant trading partners, India is the Islamic Republic’s second-biggest oil customer after China, Radio Farda reports. Data from India’s Ministry of Economic Affairs indicate that India’s exports to Iran declined “38 percent in the first quarter of 2020” compared with the same period in 2019.

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