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Indian foreign policy failure? China to take advantage of Iran's 'no' to Chabahar project

By Shabir Ahmad*
In a major foreign policy setback for India, Iran has decided to drop India from the strategic Chabahar rail project by citing a delayed funding from Indian side. This strategic railway project in Iran was supposed to be executed by Ircon International Limited, formerly Indian Railway Construction Limited, in association with the Iranian railways.
The construction of this project has been delayed over the past four years. By citing India's delay in funding the project, Iran has decided to drop India from the project and execute it on its own. To understand why this is a major foreign policy setback for India, one needs to understand the strategic significance of the Chabahar port and the Chabahar railway project.
The Chabahar port is located in South-East Iran on its Arabian coast. It occupies a strategic location. It is a strategic choke point through which all the oil shipments from the Persian Gulf enters the Arabian sea. From here, the shipments move on to the Indian Ocean region and the Mediterranean sea.
It is also not without significance that, to the east of Chabahar port, we have the Gwadar port of Pakistan that is located in its Baluchistan province, which is a part of the China–Pakistan Economic Corridor (CPEC).
Keeping these factors in view, India has desired to establish close connectivity with Afghanistan and central Asian countries, and having access to the Chabahar port is considered very critical for access these countries. Indeed, India enjoys close political and strategic relations with Afghanistan as well as with all central Asian countries. 
These countries are very rich in natural resources, including oil and natural gas, hydro-power, valuable metal, etc. With an eye these resources, India has sought to establish a close trade relationships with them.
A major roadblock for India's ambitions has been lack of connectivity between India and Afghanistan and between India and the central Asian countries. India shares no land border with any of the central Asian countries and with Afghanistan. A small 80 km border with Afghanistan which India claims is part of the Pakistan occupied Kashmir (PoK).
The only land route through which India can connect with these countries passes through Pakistan, but any such land transit corridor that connects India with Afghanistan and central Asian countries is not feasible, because Pakistan would not permit such land based transit connectivity with India. Even if it permits such land corridor, it would be highly vulnerable due to constant political instability between India and Pakistan.
In order to bypass this handicap posed by Pakistan, India came up with the grand and ambitious plan to connect with Afghanistan and central Asian countries via Iran. As a part of this strategy, India has long pursued the development of the strategic Chabahar port and a railway line under a road project that subsequently connects Chabahar port with Afghanistan.
This, it was thought, would allow India to establish maritime connectivity with the Chabahar port through the Arabian sea and then further transfer goods and products through the land route all the way up to Zahedan, which is an Iranian border town located at its borders with Afghanistan. From here, the road and rail corridor will connect with Afghanistan's border town Zaranj, which is already a part of the Zaranj-Daleram Highway that has been constructed by India.
In 2016, India, Iran and Afghanistan signed a tri-lateral agreement to develop the Chabahar port and the Chabahar railway project. Last year, Iran gave operational control over one of the terminals of the Chabahar port, and through this terminal India started trading with Afghanistan. 
India and Afghanistan also established an air corridor in order to facilitate the transportation of perishable goods and other items. But with Iran deciding to drop India from any further involvement in the Chabahar railway project by citing India's inability to fund, things seem to be moving in the reverse gear.
No doubt, recently Pakistan decided to allow Afghanistan to take its exports that are headed towards India via Pakistani territory by making use of integrated check posts that India and Pakistan have established at the Wagah-Attari border. Under a Pakistan-Afghanistan trade agreement, Pakistan is supposed to help and promote Afghan exports.
But in view current hostilities with India, Pakistan would never permit Indian exports that are headed towards Afghanistan and other central Asian countries. Even if it permits Indian exports, that would be highly volatile and vulnerable due to frequent tensions between the two countries. 
Fear of American sanctions pushed India to slow down its funding and as well as its construction activities with regard to Chabahar port and Chabahar railway line
Iran’s decision to drop India out of the Chabahar railway project is seen as related to the ongoing geopolitics involving US, Iran, China and India. Iran has been placed under economic sanctions by the US, which is essentially looking to cripple its nuclear weapons programme. Through these sanctions, the US is looking to squeeze the key sectors of Iranian economy, oil and energy.
Iranian President Hassan Rouhani with Chinese counterpart Xi Jinping
Both India and Iran have not only shared close trade relations but they strategic relations. In fact, India and Iran coordinated with each other in order to stabilise Afghanistan, ripped with extremist violence. However, the close economic and strategic relationship between India and Iran has come under severe pressure due to American sanctions.
When the first set of sanctions were imposed upon Iran by the US, India managed to bypass these by working out an alternative payments system for Iranian oil. This pleased the Iranian government about India's conviction to protect the economic relationship, especially oil imports, from the threat of American sanctions.
But in order to please the US, India decided to back out from the Iran-Pakistan-Iran gas pipeline project. This way, India was trying to strike a balance between the interests of the US and Iran. It was trying to protect its own national interests, especially in its energy security. In return, India tried to reward Iran by allowing greater Indian involvement in the development of the Chabahar port and the Chabahar railway project.
However, recently, the Donald Trump administration decided to walk out of the Iranian nuclear deal, and it decided to reimpose economic sanctions against Iran. Since then, the Trump administration has been exerting pressure on all the countries that import oil from Iran, including India, to zero out their oil imports. This time India succumbed to American pressure. 
It has not only reduced oil imports from Iran. It has almost zeroed out oil imports. Until recently, Iran, which was the top oil supplier for India, has been cut off from exporting to India as a result of American sanctions.
The fear of American sanctions pushed India to slow down its funding and as well as its construction activities with regard to the Chabahar port and the Chabahar railway line. No doubt, India managed to convince the US and gained one-time exemption for the Chabahar railway project. Indian investments and involvement in the port and the railway project were exempted from the threat of American sanctions.
Yet, despite of this exemption, India has failed to execute the project on time, mainly due to technical and logistical delays on the part of India. In the eyes of Iran, India has succumbed the fear of American sanctions – not only has it failed to protect Iran’s trading relations, it has also failed to deliver the committed project on time.
Alongside, Iran has seen India's growing contiguity with the US and Israel with lot of suspicion. Over the last one-and-a-half years, Iran has adopted aggressive and hostile approach towards India, especially in International platforms.
Thus, at the UN and the conferences of Islamic nations, Iran has repeatedly brought up human rights violations by Indian security forces in Jammu and Kashmir (J&K). Iran also sided with Pakistan,
The author
Turkey and Malaysia in criticising India's decision to abrogate Articles 370 and 35A. These factors have pushed Iran closer to China, thus posing a major threat to India's national interests in the region.
Quite like India, China is heavily dependent on oil imports from Iran. In fact, it is one of the top recipients of Iranian oil. Iran and China have come very to close to signing a landmark agreement that involves massive economic and strategic partnership between the two countries. 
As per the agreement, China is expected to invest billions of dollars in the Iranian economy, especially in oil and energy sectors and in the port and infrastructure, which have been hardest hit as the result of the American sanctions.
Since China has the capacity and capability to bypass American sanctions, Iran might be looking to hand over strategic infrastructural projects such as the Chabahar port and the Chabahar railway project to China. This could possibly explain as to why Iran has decided to drop India out of the project. It is not just the Chinese factor which has led to these developments. It is also the result of India's failure to protect its own national interests.
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*Freelance writer and IAS aspirant from Raiyar Doodhpathri, Jammu and Kashmir

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