Chabahar Port has been built in southeastern Iran close to Pakistan. Photograph:( Zee News Network )
Iran is now constructing the railway line alone. It wants to complete the project by 2022. It is a big roadblock in India's strategic ambitions in central Asia.
Iran's Chabahar port is the only deep seaport and India's gateway to central Asia. The port was inaugurated in 2017, it not only side-stepped Pakistan but also counter-balanced the Chinese-controlled Gwadar port.
India had an ambitious plan - offload shipments in Chabahar, load them on trucks and trains, send them to Zahedan in Iran, go further to Zarang in Afghanistan and take the goods to the central Asian republics.
For this plan to be successful, India needed to develop better connectivity to the port - enter the Chabahar-Zahedan railway line, the 628-km-long track connecting the port to Zahedan.
India and Iran had agreed to jointly construct the railway line with 34 stations estimated to ferry 2.8 million tonnes of freight per year. The deal was reached in 2016 during Indian Prime Minister Narendra Modi's visit to Iran. Four years on, Tehran has thrown New Delhi out of the project. It now wants to construct the railway line alone. Reports claim that Iran has already inaugurated the track-laying process.
Tehran claims New Delhi has been delaying funding. The project was being stalled because of US sanctions on Iran, although it was waived in 2018 but finding suppliers and partners continued to remain a challenge as banks too were reluctant to provide loans.
Iran is now constructing the railway line alone. It wants to complete the project by 2022. It is a big roadblock in India's strategic ambitions in central Asia. It loses its influence in the trade corridor and it is a setback for India's bigger plan since the railroad was supposed to be a transit corridor to Afghanistan after connecting Chabahar to Zahedan, the railroad was to be linked to Zaranj in Afghanistan.
The plan may now need a rethink. The loss is diplomatic too. It is a sign of Iran losing confidence in India.
India's loss is China's gain. The development comes at a time when China is finalising a $400 billion strategic partnership deal with Iran. Not surprising given the two countries have a common enemy - the United States.
Beijing is set to gain from Chabahar development. Firstly, it will ensure a tighter grip over Iran which is a country with a population of 80 million with 60 per cent people under 30.
Secondly, Chabahar's loss is Gwadar's gain. The two ports are just 172 km away. Gwadar already has better connectivity, and China is unlikely to be shy of promoting it as the go-to port for trading with central Asia.
Also, by kicking India out of a project in Iran, China gets to poison one more of India's allies and China gets to carve its way into trying to influence the affairs in Chabahar.
India must learn from the episode. New Delhi cannot take its allies for granted especially when the expansionist Dragon is on the loose and desperate.