A view of Iran’s Chabahar port, in which India has invested.  

Iran dropped India from the Chabahar rail project because of “absence of active Indian engagement,” Iranian sources said on Tuesday, confirming The Hindu ’s report. Iran remains open to all, including India, for collaboration and investment but Tehran expects future projects should be safeguarded from third party unilateral sanctions.

“It was expected that in addition to the investment in Chabahar Port, India could also play a more crucial role in funding and constructing this strategic transit route from Chabahar to Zahedan and from Zahedan to Sarakhs at the border with Turkmenistan, which in the absence of an active Indian engagement and partnership, currently is under construction by Iranian funding and engineering capacities,” said Iranian sources.

The Hindu reported on Tuesday that Iran had gone ahead with the important transit project on its own citing delays from the Indian side in funding.

The delay has also indicated at possible impact of U.S. sanctions on India’s projects with Iran. Though India secured exemption for the Chabahar port from U.S. sanctions, bilateral ties with Iran took a hit in February after the riots in Delhi drew condemnation from Iranian Foreign Minister Javad Zarif.

India had firmed up the railway plans in May 2016 during Prime Minister Narendra Modi’s visit to Tehran.

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