India loses Chabahar rail deal

“India dropped from Chabahar Port deal. This is the diplomacy of the Modi government that won laurels even without getting the work done, China worked quietly but gave them a better deal. Big loss for India. But you can’t ask questions!” tweeted Congress leader Abhishek Manu Singhvi citing a report in The Hindu.

Interestingly, the move comes as Iran is nearing a $400 billion 25-year strategic partnership with China. In its report, The Hindu stated that the partnership will include Chinese involvement in Chabahar’s duty free zone, an oil refinery nearby, and possibly a larger role in Chabahar port too.

India and Iran had signed an agreement to construct the rail line in 2016. Chabahar, which is located 72 kilometers west of Pakistan’s Gwadar port, holds immense strategic and economic significance for India.

Iran has now decided to go ahead with the project, which entails the construction of a rail line from the strategic Chabahar port to Zahedan running along the border with Afghanistan, on its own the report said.

The 628-km-long Chabahar-Zahedar rail line project was inaugurated by Iranian Transport Minister Mohammad Eslami recently.

The report said that the project is expected to be completed by March 2022, and the government will use funds from the Iranian National Development Fund.

India was expected to invest $1.6 billion in the project, which was meant to be a component of a trilateral agreement with Iran and Afghanistan to create an alternate trade route to Central Asia An MoU between the state-owned Indian Railways Construction Ltd and Iranian Rail Ministry was signed during Prime Minister Narendra Modi’s visit to Tehran to sign the Chabahar agreement with Iranian President Hassan Rouhani and Afghanistan President Ghani. 

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