Iran to develop Chabahar rail link on its own, but says ‘doors are open’ for India to join

India is unable to develop the Chabahar-Zahedan rail link under the second phase of the project due to US sanctions. Iran says there's ‘no limit’ to its relations with New Delhi.

Chabahar port | Photo: Commons

New Delhi: Iran is funding and developing a rail link under the second phase of the Chabahar Port on its own, but is leaving the door open for India to join at a later date, ThePrint has learnt.

India had developed the first phase of the project to modernise the Chabahar Port, and now operates it. It was also meant to be part of the second phase, but is unable to move forward due to US sanctions despite Iranian push.

“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 told ThePrint.

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.

This strategic transit is part of Iran’s International North-South Transit Corridor, which will significantly reduce the traditional trade routes between the markets of India and the European and Commonwealth of Independent States (CIS) countries. The link will also boost the Iranian economy.

The Iranian official said the understanding was always that apart from investing in the Chabahar Port, India was also looped in for phase II of the project. “But in the absence of an active Indian engagement and partnership, currently (the rail link) is under construction by Iranian funding and engineering capacities.”

However, he said Tehran considers “no limit” in its relations with New Delhi, adding that “India has always been welcomed and would be welcomed as a friend”.

According to Indian sources, Iran has decided to move forward on its own as New Delhi has informed Tehran that the stiff US sanctions are impeding its movement. However, New Delhi is confident that it will remain part of the project.

‘Won’t allow sanctions to hamper these projects’

Last year, the Iranian envoy to India Ali Chegeni had hinted that Tehran might have to fund and develop the project by itself.

Chegeni had said Iran has to go ahead with the projects with or without India because it won’t allow any “unjust unilateral sanction” to adversely impact these projects, and thereby “hamper these historical cordial relations and a genuine and sincere collaboration between the two countries”.

The China deal

The latest move comes at a time when Iran is all set to sign a strategic trade and security deal with China, notwithstanding the series of tough sanctions that the US has imposed on Tehran. Under this deal, Beijing has earmarked investments worth $400 billion into Tehran.

“Such agreements are fully in the line with Iran’s publicly declared ‘Look East Policy’ and suggest that Iran is determined to expand its relations with all Asian partners, in particular China and India as two friendly countries,” the official quoted above said. He stressed that “there is no hidden” agenda behind the China deal.

The Iranian government is of the view that for the country’s progress and sustainable development, both China and India are of “importance and priority”, said the official

“Accordingly, it has introduced and offered many investment opportunities to the said Asian countries, which, for that purpose, India and China are of particular importance and priority,” the official said.

Iran has offered many more investment opportunities to India, in road and railway, power, petrochemical, steel and fertiliser sectors in Chabahar Free Zone as well as the Makran Coast, the official added.

He also highlighted how the Chabahar Port has proven to be beneficial for Iran even during the pandemic, with goods increasingly transiting from the port.