Iran drops India from Chabahar rail line project amid China's multi-billion dollar deal

Iran has dropped India from a railway project linking the Chabahar port to Zahedan city, citing delays from the Indian side in funding and starting the construction, according to reports.

India and Iran had signed an agreement four years ago to construct a 628-kiolmetre railway line from the strategically vital port to Zahedan, along the border with Afghanistan. The Iranian government has reportedly decided to go ahead with the construction on its own.

According to a report by The Hindu, Iran’s Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process last week for the line. The line will be extended to Zaranj across the border in Afghanistan.

The newspaper report cites officials as saying that the entire project would be completed by March 2022, and that Iranian Railways will proceed without India’s assistance. The country would use approximately $400 million from the Iranian National Development Fund.

This comes amid China finalising a 25-year, $400 billion strategic partnership deal with Iran.

Chabahar is the only seaport Iran has in its energy-rich Sistan-Balochistan province by the Gulf of Oman and consists of two ports with five berths each. The port is a counter to Pakistan's Gwadar port which is being developed with the Chinese investment.

The port, inaugurated in December 2017, has opened a new strategic route connecting Iran with India and Afghanistan bypassing Pakistan.

In December 2017, India took over the operations of port and commissioned the second port this January, marking the country's maritime entry into a foreign land.