Why Iran’s dropping India from Chahbahar Rail Project is a huge setback to India’s strategic interests?
By Mohammed Hussain siyasat.net
According to various media reports – Iran has dropped India from Chabahar rail project citing funding delays from India. This news has adverse ramifications to India’s economic and political aspirations in Iran, Afghanistan and the Central Asian countries.
The Iranian government dropped India from Chahbahar rail project ostensibly due to delays in funding from the Indian side. The railway project was part of a Trilateral agreement between India, Iran and Afghanistan to build a road and railway route from Chahbahar Port to Afghanistan.
It was during Indian Prime Minister Narendra Modi’s visit to Iran in May 2016 when Indian Railways Construction Ltd. (IRCON) had signed a MoU with Iranian Rail Ministry to construct the Chabahar Zahedan Railway line as part of transit and transportation corridor. IRCON had promised to provide all services, infrastructure work and financing for the project to the tune of $ 1.6 billion.
The report says that despite several site visits by IRCON engineers and preparations by Iranian railways, India never began the work, ostensibly due to worries that these could attract U.S. sanctions. Though the U.S. provided a sanction waiver for the Chabahar port and the laying of the railway line to Zahedan, it was difficult for India to find suppliers and partners who feared that they could be targeted by the U.S.A.
This sudden decision from the Iranian authorities is tantamount to a big setback to the India’s plan to build an alternative route to Afghanistan and Central Asian countries.
In February 2019, the first load of Afghan goods traded through Chabahar, highlighting the economic use of the project for greater stability of Afghanistan, a country the US is currently negotiating its way out of a 19-year-old war with the Taliban. With Chabahar being one of the few international trade routes operational for the Afghan economy, sanctioning India from building upon and operating it would have been too myopic even for the Trump administration.
Coinciding with this latest development there are reports of China – Iran long term strategic and economic partnership which has created an euphoria in Iran’s economic circles. ‘Tehran Times’ published a report yesterday on its front page about “Iran-China evolving strategic partnership”. According to this report China is going to come to the aid of the Iranian economy reeling under the USA-led sanctions. China is looking forward to have a 25-year long term agreement with the Iranian Government in investing $ 400 billion in Iranian infrastructure in return of guaranteed crude oil supply to China.
This long term Sino Iranian strategic partnership will pose a serious challenge to Indian’s ambitious plan to build, develop and operate Chabahar port as a part of it’s quest to have an alternative route to Afghanistan and the Central Asian countries.
India has invested more than $ 2 Billion in Afghanistan and wanted to have a trading route to this landlocked country as Pakistan had refused to provide access through its territory to these countries. India according to the trilateral agreement with Iran and Afghanistan was to build and develop Chabahar Port Road and Railway line upto Dilaram in Afghanistan through Zahedan.
Though India had succeeded in getting an exemption from the USA to continue work on its ambitious project at Chabahar which was to counter Chinese investment at Gawadar Port of Pakistan, it could not proceed with the work due to difficulties in getting the Contractors to take up work in Iran fearing American sanctions.
As for reasons behind Iran’s sudden decision, Iran was not happy with India for succumbing to the US pressures in stopping Iranian crude oil supplies. But the main reason behind Iran’s decision undoubtedly is the massive $ 400 billion Chinese investment in cash crunched Iranian economy. There is every likelihood that Iran’s decision is to please China which it sees has the wherewithal to stand up to USA sanctions preventing nations from having any economic ties with Iran.
This development must be more worrisome to the Indian Government in view of China’s policy to encroach into India’s geographical periphery. China has already entered into some long term deals with almost all the SAARC nations either through bi-lateral trading concessions or long term financial inducements China is well entrenched in Maldives, Sri Lanka, Nepal and even Bangladesh not to speak its all-weather friend Pakistan. It’s slowly but steadily busy in increasing its influence in Afghanistan which India sees as its traditional ally and wants to wean it away from Pak-China influence.
This development could also jeopardy India’s participation in the multi billion Farzad-B gas field and other as according to the reports the Iranians are likely to let Chinese money spill into its Oil and Gas infrastructure which can lead to growing Chinese footprint in this crucial sector.
As of now, Iran has only dropped India from its Railway Project from Chabahar to Zahedan. But there is every likelihood that China may intrude further to develop some peripheral infrastructure in and around Chabahar port itself especially in Chabahar Special Economic Zone and occupy its large portion to further its economic interests in the Gulf region. If such an eventuality takes place, China will create hurdles in the path of India to fulfill its plans concerning this crucial Port-road route to Afghanistan and other Central Asia countries.
By its latest move in Iran, China seems to have succeeded in encircling India from every side. However, Iran is very crucial to India’s geo-political and economic interests and India simply cannot afford to give up its economic interests in Iran. It will be tough time for the Indian authorities to counter Chinese moves in and around Chabahar to save its investments and efforts so far to achieve its strategic goals. Will India’s foreign policy planners rise to the occasion?
it seems that Tehran is staging a China-inspired bite-back at India, at a time when New Delhi is pushing out a Chinese app one day and a company on the next. Iran wants that deal, and no one can seriously malign it for that reason. But the deal will be troublesome internally and externally. Iranians are already dealing with a flood of Chinese goods killing off local competition, and any larger Chinese presence in Iran — particularly a military one — will be problematic for Beijing’s own West Asia policy, besides being against Iran’s own Constitution
(The author is a Freelance journalist)
(www.siyasat.net is Ahmedabad, Gujarat, India based website)
