The Iranian government dropped India from the strategic railway project between Chabahar Port and Zahedan city, in what is considered a major blow to New Delhi, after Tehran signed a 25-year contract with China.
Back in 2016, Tehran and New Delhi signed an agreement for “trade transit” during the historic visit of Prime Minister Narendra Modi to Tehran, the first visit by an Indian premier to Iran since 2001.
The agreement stated that Iran’s railways, in partnership with India, would take over all works related to the railway and finance all project works.
However, it seems that Iran dropped India after it finalized a partnership deal with China, valued at $400 billion, that includes signing a major military and political contract.
Indian media said the Chinese deal with the Iranian government is significant, especially amid the current tensions between New Delhi and Beijing, which culminated in the bloody military confrontations on the border between the two countries.
They noted that the Chinese influence is clear through the course of the recent deal with Iran aiming to exclude India from the grand strategic project along the border with Afghanistan.
The Indian government has already invested nearly $500 million in Chabahar port, which overlooks the Oman Sea coast and has a unique strategic location.
Indian strategist Kabir Taneja revealed that in December 2019, reports suggested the US gave “written” assurances that it would give waivers to India to facilitate equipment purchase for the port development. However, most suppliers were European and, are now Chinese, raising fears their names would feature on US blacklists, delaying the project further.
The China-Iran agreement allows Beijing to invest $400 billion in the Iranian oil sector and establish major infrastructure projects, such as banking and telecommunications services, port and airport construction, high-speed rail lines, metro lines, and the establishment of free trade areas between the two countries.
Iran will also become a crucial party in the Chinese Belt and Road initiative, which links China with the Europe.
The two countries will discuss the military aspect of their coordination, which includes the implementation of joint military drills and joint search and rescue operations, as well as joint development of various weapons systems.
Accordingly, the Chinese government will obtain oil and natural gas, as well as Iranian oil derivatives at low prices.
Reports claim that the deal will include priority rights for the Chinese government in any major Iranian project, with concessions close to 32 percent. It also considers establishing a small Chinese military unit in the country.
