Iran Goes to Central Asia Without India

By Seymour Mammadov

Seymur Mammadov
Seymur Mammadov is the Director of the International Expert Club «EurAsiaAz» which deals with strategic issues of Eurasian Region.

Four years ago, India and Iran signed an agreement to build a railway line from the port of Chabahar to Zahedan along the Iran-Afghanistan border.

The other day it became known that the Iranian government decided on its own, without financial assistance from New Delhi, to begin construction, citing delays from India in financing the project.

India has failed Iran twice already – in May 2019, the Indian side completely suspended the import of Iranian oil under US pressure and now there is a new case related to the delay in financing the railway line from the port of Chabahar to Zahedan

Without securing financial support from New Delhi, Iran’s Minister of Transport and Urban Development Mohammad Eslami inaugurated last week the process of starting construction of a highway for the 628-kilometer Chabahar-Zahedan line, which will be extended to Zaranj in Afghanistan. The project is planned to be completed by the end of the 1400 Iranian calendar year (March 2022).

Back in December 2018, Iran transferred to India part of the port terminal of Chabahar for a period of 18 months with the possibility of extension to ten years

Frankly, Iran has remained silent for a long time regarding India’s slow action to finance the project, hoping that the Indian side will fulfill its obligations, but this did not happen.

The Iranian government has provided India with a good opportunity to enter the markets of Central Asia in the future.

Back in December 2018, Iran transferred to India part of the port terminal of Chabahar for a period of 18 months with the possibility of extension to ten years. Such a step on the part of Iran, in fact, was the practical implementation of the agreement between India, Iran and Afghanistan to ensure freight traffic between Afghanistan and India, which was reached back in 2016.

For India, the Iranian port of Chabahar is a strategic trading gateway to both Afghanistan and Central Asia. True, in order to fully reveal the potential of the port in the Central Asian direction, it is necessary to lay a railway line from the port of Chabahar to Zahedan along the Iran-Afghanistan border. However, India is already excluded from this project. And in the future, if the Indian side shows interest to this railway, the Iranian government may limit the preferences to Indian business circles, which Tehran may have promised to provide after the full launch of the project.

The announcement of the expulsion of India from the railway project provoked a violent reaction from opponents of Prime Minister Narendra Modi. The Congress Party on Tuesday criticized the Modi government. Congress spokesperson Abhishek Manu Singhvi wrote on Twitter:

Here’s what Singhvi tweeted: “India dropped from Chahbar Port deal. This is the diplomacy of the Modi Govt that won laurels even without getting the work done, China worked quietly but gave them a better deal. Big loss for India. But you can’t ask questions!”

Given that India does not have any borders with Central Asia, New Delhi has always shown great interest in working closely with countries in the regions. Not surprisingly, the Indian side is one of the initiators of the creation of the North-South international transport corridor with a total length of 7,200 km from St. Petersburg to the port of Mumbai (Bombay), which opens up promising opportunities for India to deliver its goods to Central Asia.

The corridor provides for three main cargo routes relative to the Caspian Sea, one of which is eastern: direct rail links through Kazakhstan, Uzbekistan and Turkmenistan with access to the Iranian railway network at the existing Tejen – Serakhs border crossing. Considering India’s tense relations with Pakistan and China, in fact, Iran is almost the only route for transporting Indian goods to Central Asian markets. However, this route is much long and costly. In this regard, the possibility of establishing transit trade with Pakistan could be considered, that is, India could export its goods to Central Asia through Pakistani territory, and the Central Asian countries would be able to export their goods to India.

There are favorable prerequisites for the implementation of this idea. At the special request of the Government of Afghanistan and with a view to facilitating Afghanistan’s transit trade, Pakistan has decided to resume Afghan exports through Wagah border crossing from 15 July 2020, after implementing COVID-19 related protocols. With this step, Pakistan has fulfilled its commitments under the Pakistan-Afghanistan Transit Trade Agreement (APTTA). Pakistan has restored bilateral trade and Afghan transit trade at all border crossing terminals to pre-COVID-19 status.

On the other hand, the North-South international transport corridor, the foundation of which was laid in 2000, has not yet been fully launched for a number of reasons. US sanctions against Iran have affected the schedule of projects in Iranian territory. For example, there were certain delays in the construction of the 164-kilometer Qazvin-Rasht railway. The construction of the railway line, which began in 2006, was completed only in March 2019. Within the framework of the Qazvin-Rasht-Astara railway project, the construction of the Rasht-Astara line was supposed to begin last year, which is designed to increase the transit capabilities of Azerbaijan and Iran, but there are no official reports on the timing of the start of construction.

In addition, one cannot discount the Chinese mega-project – “One Belt, One Road”, which has won great sympathy in many countries in a very short time. China has managed to prove to the world community the viability and profitability of this initiative. Currently, as many countries as possible are trying to join the Chinese initiative.

If Iran was forced to postpone the implementation of its projects within the North-South transport corridor due to US sanctions, which greatly weakened the country’s economy, India, in turn, could retreat from the mandatory provisions of the railway project (from the port of Chabahar to Zahedan), guided by their own political considerations, that is, India does not want to spoil relations with the United States for the sake of Iran. Perhaps the problem is not only in the US sanctions that could be taken against India if New Delhi would have approved this project financially but also in the pandemic, which severely damaged the Indian economy.

In addition, the United States itself is also not particularly interested in the implementation of new transport projects linking Iran with Afghanistan and Central Asia. Washington’s fears are caused by the possible strengthening of Iran’s influence in these regions.

Summing up the above, I would like to note that Iran decided to launch a railway project on its own and took the first step in this direction. India has failed Iran twice already – in May 2019, the Indian side completely suspended the import of Iranian oil under US pressure and now there is a new case related to the delay in financing the railway line from the port of Chabahar to Zahedan.

After the full launch of the project, Tehran will already be able to use all the possibilities of the port of Chabahar, for example, this will help strengthen and expand trade contacts between Iran and Pakistan. Here, of course, a large role will also be assigned to the port of Gwadar, which will become a strategic gateway for many countries after the full launch of the China-Pakistan economic corridor.