Explained Ideas: How India should react to the evolving dynamics of China’s relationship with Iran

Reports that Iran and China are close to concluding a 25-year strategic partnership — which may involve a trade and investment partnership totalling a massive $400 billion — have generated considerable angst in India. This is being linked to reports that Iran has decided to undertake the construction of the Chabahar-Zahedan railway line to the border with Afghanistan on its own because India continues to delay its implementation of the project.

However, says Shyam Saran, a former Foreign Secretary and a Senior Fellow at CPR, it is not just India but also other countries, including China, which have found it difficult to undertake projects in Iran because of US sanctions, particularly the denial of dollar financing.

That’s why Saran believes the 25-year strategic partnership plan should also be taken with a generous pinch of salt. “Though made much of by Iran, it has not been confirmed by China”. Saran says these reports are being encouraged by Iran to suggest that it has powerful friends and that the US has been unable to isolate it.

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