Iran has almost finalized a huge 25-year bilateral agreement with China. Meanwhile, Tehran has pulled out of a major rail deal with India.
Recently, the Iranian government said that the project will be completed on its own. At the same time, the country said the decision was taken due to delays in the project and uncertainty over funding from India.
However, analysts say Iran is increasingly building good relations with China as tensions with the United States escalate. China is also keen to build good relations with Iran. Therefore, the exclusion of India from an important project has jeopardized the long-standing relationship between Tehran and New Delhi.
In May 2016, Indian Prime Minister Narendra Modi visited Tehran. At that time, a trilateral agreement was reached between India, Iran and Afghanistan for the construction of a 628 km long railway line from the seaport of Chabahar in Iran to the Iranian city of Jahedan near the Afghan border. The agreement was signed by Modi, Iranian President Hassan Rouhani, and Afghan President Ashraf Ghani. The main goal of the agreement was to build an alternative trade route for India with Afghanistan and Central Asian countries.
A senior Iranian government official told the media that Tehran’s railway authorities would run the project alone without any Indian assistance. The work will be completed by 2022. Iran’s National Development Fund will provide the USD 400 million needed for the project.