Iran drops India from the Chabahar project for Chinese deal

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Iran has dropped India from the $1.6 Billion Chahbahar-Zahedan railway project and has decided to kick off the project on its own, citing funding delay from New Delhi.

According to the sources, Iran has dropped India from the Chahbahar railway project and has decided to execute the enterprise on its own. Last week, the Iranian Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process of the 628 km line that runs along the Afghanistan border. According to the officials, the project would be completed by March 2022 through $400 million from the Iranian National Development Fund.

The construction of the Chabahar-Zahedan railway line was meant to be India’s commitment in the trilateral agreement between India, Iran and Afghanistan in 2016. The agreement ostensibly aimed to sideline Pakistan by providing an alternative path from Afghanistan to Central Asia.

The Indian Railway Construction Limited (Ircon international) had signed a MoU with the Iranian Railway Ministry, promising to provide the services and the $1.6 billion financial assistance.

The Ircon engineers had visited the site multiple times with in the four years since the MoU endorsement. However, India never proceeded with the construction, seemingly due to the fear of US sanctions, even though the US had provided a sanctions waiver for the project. Despite the US involvement, the equipment suppliers have been reluctant to supply the required material for the project, allegedly worrying trade sanctions. In the past, India had already ceased its oil trade with Iran due to US sanctions.

This development came as Iran finalised a $400 billion 25-year strategic partnership with China which will include Chinese involvement in Chabahar’s duty-free zone, oil refinery and possibly a larger role in the Chabahar port, according to The Hindu.

According to a leaked facsimile of the 18-page “Comprehensive Plan for Cooperation between Iran and China”, the Sino-Iranian cooperation will extend to energy and transport facilities, port refurbishments and refinery instalments. In return, Iran will supply discounted oil and gas to China for 25 years.

The Indian ambassador to Iran cautioned that through this deal — and the China Pakistan Economic Corridor centered in Gwadar, Balochistan — China would extend its coastal ambit through the Iran-Pakistan coast.

It is to be noted that the habitants dominate the region from Gwadar to Chabahar are Baloch ethnic, who claim the Chabahar (currently Iran) to Gwadar (currently Pakistan) the coast line is historically Baloch territory. Whereas, Baloch people have been struggling to regain their independence from both the Pakistan and Iran.

It is the fifth insurgency going on in eastern Balochistan against Pakistan state, and recently after the Chinas’s one belt and road initiative and involvement in Balochistan’s Gwadar port and the gold mines of Saindak, which was welcomed by Pakistan, the China is considered a new enemy by Baloch insurgents.

Baloch armed groups have targeted Chinese engineers in Gwadar and Saindak, as well as they have carried out massive attacks on Chinese Embassy in Karachi and a five start hotel ‘PC’ in Gwadar, in the past.

The same group, Baloch Liberation Army carried out an attack on Pakistan Stock Exchange in Karachi, on 29 June this year, according to reports in which China holds at least 40 percent equity.

The BLA spokesman said in his statement after the attack: “Not only Pakistan but China is also involved in every step of exploitation of Balochistan’s resources. We had warned China to cease her expansionist and exploitative ambitions. In order to stop China from advancing, Majeed brigade has already attacked Chinese Engineers in Dalbandin, Chinese consulate in Karachi and an attack of Chinese delegates at PC hotel Gwadar. China holds about 40% equity in the Pakistan stock exchange through the Shanghai stock exchange, Shenzhen stock exchange and China financial future exchange. That is why the attack was not only aimed at Pakistan’s but also an attack on Chinese economic interests and if China continues to take part in Balochistan’s exploitation they will face more attacks.”

As per the reports, under the agreement, China and Iran will exchange intelligence, including training exercises, joint research and weapons development. The aim will be to fight terrorism, eradicate drug and human trafficking and curb crime in the border areas.

According to regional analysts, this cooperation between the two countries will possibly hit hard the Baloch pro-independence forces of the Pakistan-Iran border region, who are a big threat for China due to the previous attacks by Baloch groups on Chinese projects including engineers; where China’s multi-billion projects are based on both sides of the border as well.

Strategic affairs expert Brigadier (retd) NK Bhatia says the growing ties between Iran and China are certainly a matter of concern for India. Especially in a situation where China and Pakistan have very close relations and Pakistan’s attitude towards Afghanistan-India relations is well known.

According to Brigadier Bhatia, China’s growing presence in Iran will have a lasting impact not only on India-China relations but also in Afghanistan and Central Asian countries, DW reported.


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