UNDERSTANDING WHAT HAPPENED

The Iranian government had decided to drop India from the project to construct a rail line from Chabahar port to Zahaden along the border with Afghanistan, and proceed on its own, citing delays from the Indian side in funding and starting the project, The Hindu reported on Wednesday.
“Iran Railway Department will proceed without India’s assistance, using approximately USD 400 million from the Iranian National Development Fund,”

India says Committed to Chabahar Project in Iran

UNDERSTANDING THE DETAILS

The Zahedan railway project, (connect Chabahar port to Afghanistan) according to Indian officials, has 2 components — the ‘sub-structure’ which is earth-moving and preparing the ground for the tracks and the ‘super-structure’ which includes the tracks and rakes.
The Government of Iran is responsible for the first and India has committed to do the rest. However, the Indian part needs which is currently under United States sanctions, and this has caused a delay.

THE PORT IS DOING BUSINESS AS USUALLY

The Chabahar port however, is doing brisk business, and has been firewalled from United States sanctions, which required some diplomatic heavy-lifting by the Indian leadership with their United States counterparts.

WHAT INDIAN GOVERNMENT IS SAYING

India refuted Iran’s contention that it is out of the Chabahar-Zahedan rail project, with Indian Govt senior officials saying that New Delhi remained
lt committed” to financing and building the Zahedan railway line which is an intrinsic part of the Chabahar port project.

India says Committed to Chabahar Project in Iran

MONEY ALLOCATED

India had allocated ₹ 100 crore for the Chabahar project in 2020 Budget.
The allocation of the funding signals India’s desire and commitment to be part of the Chabahar and Railway project, but it has to undertake “due diligence” before spending the money.

IRAN’S FIRST GOVERNMENT RESPONSE

“We are funding the project ourselves now… But still the doors are open for India, it is open to IRCON,” a senior Iranian government source
Indian public companies, IRCON and Rites, were awarded the second phase of the project to develop the rail link connecting the south-eastern port city of Chabahar to Zahedan, the provincial capital of Sistan-Baluchestan region, and from Zahedan to Sarakhs at the border with Turkmenistan.

CURRENT GEOPOLITICAL SCENARIO

U.S elections matter a lot and whoever wins in 2020 will decide the fate of Iran’s sanctions
India probably hopes that post 2020 Iran will get some relaxation under a new Iran Nuclear agreement

IRAN’S PERSPECTIVE

Iran knows that India is a massive market for its oil and if the geopolitical scenario changes India can provide it with a huge consumer base for its crude oil

A LARGER QUESTION FOR INDIA

Was it a right decision to boycott Iran’s oil after U.S asked India to do so?
Has India gained enough from the sacrifice?

India says Committed to Chabahar Project in Iran India says Committed to Chabahar Project in Iran