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Did Iran leave India out of the Railway project in Chabahar? Here is everything we know so far

Iran says there was no agreement with India on the Railway line, which is not correct. India has also reiterated that there was an MoU signed between the two countries. Only Iran can remove this confusion by coming clear with facts.

Confusion prevails over the status of India’s involvement in the Chabahar-Zahedan railway project in Iran after media reports that India has been dropped from the long-pending infrastructure project. While Iran says there was no agreement with India to begin with, India insists there was an MoU and it is still part of the project.

On July 14th, journalist Suhasini Haider reported on The Hindu that Iran government has decided to go ahead with the project to build a railway line from Chabahar port to Zaheban without the assistance of India, despite signing an agreement with India four years ago. The report quoted Iranian side as saying that the delay from India in starting and funding the project was the reason behind.

Last week the track laying ceremony was held for the project to build the 628 km long railway line. The Hindu quoted Iranian officials that the Iranian Railways will proceed without India’s assistance in the project, and it will be funded by Iranian National Development Fund. The Hindu report claims that while the Indian side visited the project site several times, work on it was not started, allegedly due to worries that it might attract sanctions from the USA.

After the Hindu report was out, Iran issued a statement denying that India has been dropped from the project. But strangely, they claimed that there is no question of India to be dropped from as there was no agreement with India on it. Iran govt said that the story was “totally false because Iran has not inked any deal with India regarding the Zahedan-Chabahr railway line”. An official of the Iran govt said that “Iran has only signed two agreements with Indians for investment in Chabahar: one is related to port’s machinery and equipment, and the second is related to India’s investment to the tune of $150m,” and denied any agreement with India on the railway line. He said that the issue of Chabahar railway infrastructure and the railway, but during the negotiations, it was not agreed.

But the Iranian claim is confusing because they had indeed signed an MoU with India for the Railway line during PM Narendra Modi’s Iran visit in May 2016. The website of Ministry of External Affairs lists 12 MoUs signed between the two nations during the visit, and the 11th MoU is between Ircon International Limited of India and CDTIC (Construction, Development of Transport and Infrastructure Company) of Iran, for services for the construction of Chabahar-Zahedan railway line. The MoU had included all superstructure work and financing the project worth around $1.6 billion.

MEA website lists India-Iran MoU on railway project

The MEA has also denied the report of India being thrown out by Iran from the project and said that feasibility survey has already been carried out and the spot assessment has been made for the same. MEA spokesperson Anurag Srivastava said that IRCON was appointed by the Government of India to assess the feasibility of the project, and it was working with CDTIC.

According to reports, there has been a change in Iranian policy on developing infrastructure, and they decided to develop the project on its own but will involve India at a later stage. Iran has hinted that while it will complete the current phase of the project on its own, India will be asked to join in the second phase, which will be from Zahidan to Zaranj on the Afghan side. Sources say although Iran decided to go ahead with the current project due to delays, it is keen on Indian involvement later as it is facing financial crunch due to US sanctions.

Therefore, while it is correct that Iran has dropped Ircon from the rail line project, its explanations regarding it does not match with facts. Iran says there was no agreement with India on the Railway line, which is not correct. India has also reiterated that there was an MoU signed between the two countries. Only Iran can remove this confusion by coming clear with facts.

It may be noted that India continues to operate the Chabahar Port in Iran, and India is among the few counties that still buy oil from Iran despite US sanctions.

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