The Telegraph
Since 1st March, 1999
Email This Page
India warms up to gas pipeline via Pakistan

New Delhi, Jan. 13: India may finally agree to the Iranian proposal to lay the gas pipeline through Pakistan.

After consistently turning down the proposal for months, India is now veering round to the view that it has more to gain than lose if the pipeline comes through Pakistan.

A fresh proposal would be made by Iran during President Mohammed Khatami’s state visit to India from January 24.

Khatami, in Pakistan last month, discussed the proposed pipeline deal with President Pervez Musharraf and other senior Pakistani officials in Islamabad.

The Musharraf regime is keen to see the pipeline pass through Pakistan because it would allow the country to earn at least $50 million in transit fee.

A final decision is yet to be taken by Delhi. But indications suggest that in the next few days the Indian leadership would discuss the issue threadbare so that it can clearly state its position to Khatami and the Iranian delegation.

“A lot will depend on the conditions that Iranians attach to the proposal,” authoritative sources said. It was learnt that Iran recently proposed a low price and a new multinational corporate if India agreed to lay the gas pipeline through Pakistan.

Teheran is also talking of a consortium of international bankers and energy majors, led by Australia’s BHP, who would own and operate the pipelines. It would be their responsibility to ensure the gas reaches India.

The Pakistani leadership is keen on being involved in the proposed deal and this position has often been stated by Islamabad. So far, the hostile India-Pakistan relations had stood in the way of involving Islamabad in any agreement that was essentially struck between Delhi and Teheran.

Hawks in the Indian establishment had been arguing that the money Pakistan would earn in transit fee would be used to sponsor terrorist activities against India in Kashmir and elsewhere in the country. So Delhi, they said, should not agree to any proposal that involved Islamabad.

But there is now a growing view in the Indian establishment that Delhi would gain if Pakistan were to be involved in the proposed pipeline.

“Our attempt is to defeat Pakistan on the centrality of the Kashmir issue by engaging with it in trade and other issues,” sources in the government said. It is argued that if the Pakistani-based terrorists tried to disrupt the supply of gas, it would be a loss of face for the Pervez Musharraf regime.

“More than India, it will be the Iranians who will raise hell if such a thing were to happen,” sources said, while indicating that if they enter into an agreement, Pakistan would ensure gas supply without disruption.

Agreeing to the Iranian proposal would also help India in strengthening its ties with Iran, both in the political and economic spheres.

Policy-makers in Delhi feel that if India agreed to the Iranian proposal of laying the pipeline through Pakistan, it would also silence India’s detractors, who have been criticising its leadership of obstinacy for not resuming the stalled dialogue with Islamabad.

“If Pakistan agrees to the proposed pipeline, it will not have much of an argument left for not normalising trade relations with India. And once this happens, it will dilute the centrality of the Kashmir issue in India-Pakistan relations,” sources said.

The proposal for the pipeline came up during then Indian foreign minister Jaswant Singh’s visit to Teheran in mid-2000. The proposal was discussed again when Prime Minister Atal Bihari Vajpayee visited Iran the next year.

But though Delhi and Teheran agreed on the supply of Iranian gas to India, the two countries differed on how it would be brought to India.

Teheran is now willing to deliver gas onland at $1.8 an mmbtu (million metric British thermal unit).

This would cut down the price by more than half of what India pays for imported liquified natural gas. Iran might bring down the price further if India agreed to the pipeline to be laid through Pakistan.

Italy’s Snamprogetti and Australia’s BHP are carrying out feasibility studies on both the onland and the sub-sea routes for the gas pipeline. India agrees that the land route would be a cheaper option, though setting up the pipeline is the responsibility of Iran.

Email This Page