A deal on the $7.4 billion Iran-Pakistan-India pipeline project appears to be moving towards the finishing line.
Last week, following his visit to Pakistan, Petroleum and Natural Gas Minister Murli Deora announced that India and Pakistan had almost worked out a general agreement on the transit fee and that a deal between India, Pakistan and Iran on the pipeline would be “clinched soon.” Iranian President Mahmoud Ahmadinejad has added further clarity to that statement. Following his interaction with Prime Minister Manmohan Singh on Tuesday during a brief stopover in the capital, Ahmadinejad said that a deal would be finalised “within 45 days.” This is welcome news. Negotiations on the IPI pipeline have been dragging on for several years now. India has had concerns over several issues including Iran’s pricing of gas, Pakistan’s levy of transit fees, the route of the pipeline and the security of the region through which it would run. There have been times when India’s commitment to the pipeline project seemed in doubt. The project has been dismissed by some in India as economically unviable.
Questions have been raised over the reliability of supplies given Pakistan’s tense relations with India. Besides, given the growing international isolation of Iran, was a pipeline project with that country a wise decision? And with India’s ties with Iran cooling somewhat thanks to Delhi’s growing proximity to the US, it did seem that the negotiations on the IPI deal had run aground. Statements on the imminence of a deal are therefore heartening.
India is under considerable pressure from the US to pull out of the IPI deal as the pipeline will enhance Iran’s revenues. India has tended to buckle under this pressure on occasion but this is not in its interest as it has sent out a negative signal to Teheran. India needs oil and gas and if what Iran has to offer suits India and enhances its long-term interests, Delhi must work on accessing it.
Given its enormous energy requirements, India needs to work on all available options to improve its energy security. The IPI deal is therefore as important as a nuclear deal that will enable India to engage in nuclear trade with the international community. Sections in India, Iran and the US, unfortunately, see these issues as a zero sum game. They cannot be allowed to determine India’s decisions or direct its foreign policy.
