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Focus: GS-II International Relations

Iranian government has decided to proceed with the construction of rail line from Chabahar port to Zahedan, on its own without India’s support

Iran has cited delays from the Indian side in funding and starting the project as the reason.

in 2016, Prime Minister Narendra Modi was in Tehran to sign a trilateral trade and transit agreement with Iranian President Hassan Rouhani and Afghanistan President Ashraf Ghani
The railway project, which was being discussed between the Iranian Railways and the state-owned Indian Railways Construction Ltd (IRCON), was meant to be part of India’s commitment to the trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia.
India never began the work, ostensibly due to worries that these could attract U.S. sanctions.
It has been difficult to find equipment suppliers and partners due to worries they could be targeted by the U.S.

Connectivity is seen as a new currency these days. India’s loss could well become China’s gain.
Inability of New Delhi in dealing with Iran has raised questions on its commitment to strategic autonomy

This port is Located on the Gulf of Oman and is the only oceanic port of the country.

With this, India can bypass Pakistan in transporting goods to Afghanistan.
It will also boost India’s access to Iran, the key gateway to the International North-South Transport Corridor that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
It also helps India counter Chinese presence in the Arabian Seawhich China is trying to ensure by helping Pakistan develop the Gwadar port. Gwadar port is less than 400 km from Chabahar by road and 100 km by sea.
With Chabahar port being developed and operated by India, Iran also becomes a military ally to India. Chabahar could be used in case China decides to flex its navy muscles by stationing ships in Gwadar port to reckon its upper hand in the Indian Ocean, Persian Gulf and Middle East.
Trade benefits: With Chabahar port becoming functional, there will be a significant boost in the import of iron ore, sugar and rice to India. The import cost of oil to India will also see a considerable decline. India has already increased its crude purchase from Iran since the West imposed ban on Iran was lifted.
From a diplomatic perspective, Chabahar port could be used as a point from where humanitarian operations could be coordinated.