The Iranian government has announced that it will proceed with the construction of a railway line linking the Chabahar port with Afghanistan on its own, citing delays from India in funding and starting the project, The Hindu reported on Monday. India had signed the highly-anticipated deal on the port, which lies in a free trade zone, in May 2016.

The development came as China finalised a 25-year strategic partnership deal with China worth $400 billion (approximately Rs 30 lakh crore). Tensions between New Delhi and Beijing hit at an all time high after the recent border standoff between the countries. At least 20 Indian soldiers had lost their lives in the worst border clash with China in over 40 years at the Galwan Valley in Ladakh last month.

India has invested $500 million (approximately Rs 3,700 crore) in the Chabahar project, which will connect the country with Afghanistan and Central Asia, bypassing Pakistan. The first phase of the strategically-located project was inaugurated in December 2017.

Unidentified Iranian officials told the newspaper that the entire project would be completed by March 2022, and that Iranian railways will proceed without India’s assistance, using approximately $400 million (Rs 3,017 crore) from the Iranian National Development Fund. Last week, Iranian Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process for the 628 km Chabahar-Zahedan line, which will be extended to Zaranj across the border in Afghanistan.

The Congress on Tuesday hit out at the Bharatiya Janata Party-led government at the Centre calling the fallout of the deal a big loss for the country. “India dropped from Chabahar Port deal,” party leader Abhishek Singhvi said in a tweet. “This is the diplomacy of the Modi government 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.”

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Why India must move fast on the Chabahar Port project in Iran

The railway project was between the Iranian railways and the state-owned Indian Railways Construction Limited. It 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. The deal also represented a strategic victory for India over China, which has been competing to develop the port, according to Reuters.

In May 2016, when Prime Minister Narendra Modi had signed the Chabahar agreement with Iranian President Rouhani and Afghanistan President Ghani in Tehran, IRCON had signed a memorandum of understanding with the Iranian rail ministry. But despite several site visits by IRCON engineers, and preparations by Iranian railways, India reportedly did not begin the work. However, when asked if the memorandum of understanding with IRCON had been cancelled, an unidentified Ministry of External Affairs official said India could still join at a “later date”.

Tehran’s recent economic and security partnership with China is expected to vastly expand Chinese presence in the country’s banking, telecommunications, ports, railways and dozens of other projects. In exchange, China would receive a regular and heavily discounted supply of Iranian oil over the next 25 years, unidentified Iranian officials told The Hindu. An 18-page document detailing the proposed agreement also described deepening military cooperation, potentially giving China a foothold in the region.