Indian Prime Minister Narendra Modi on Monday signed a pact with Iran to construct an ambitious port in Iran's southernmost city of Chabahar. Indian foreign experts have noted that the historic agreement would give New Delhi much-needed trade access to Central Asia and Europe by by-passing Pakistan.  The project would also allow India to establish a strong foothold in Pakistan's neighborhood.     

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However, Indian media have reported that New Delhi could have lost the critical Chabahar Port Project to its regional rival China if the Indian government had delayed its negotiations with Iran.          

According to Indian media reports, ahead of Chinese President Xi Jinping's visit to Iran in January, officials from a Chinese consortium had visited Chabahar and expressed their desire to construct a trade port. China's interest gathered further momentum after Beijing and Tehran mentioned in a joint agreement signed during President Xi's visist that the development of ports would be one of their important areas of cooperation.

Officials in New Delhi were apparently uncomfortable about China's interest in constructing a port in Iran amid hanging negotiations for the Chabahar port project. However, it was reportedly Iran's unpredictable moves in the past few months (with Tehran playing the "China card") that pushed New Delhi to the negotiating table.  

The Indian government, as per the local press, quickly arranged for the credit for the project through an agreement between India's EXIM Bank and Iran's Central Bank of Iran. According to the agreement, both banks would arrange credit up to Rs 3,000 crore for the project.

With China steadily increasing its influence with India's neighbors, sealing the Chabahar port project was considered highly important for India. India originally expressed interest in constructing the Chabahar port in 2014, mainly in response to China's Gwadar port project in Pakistan.

China's port projects in Bangladesh and Sri Lanka have stroked security concerns in New Delhi. New Delhi considers China's port projects as a part of Beijing's 'String of Pearls' strategy to surround India's maritime border.

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