Will India Enter the Peace Pipeline Deal?

NS: For several reasons, the most important perhaps Washington’s pressure. The U.S is forcing Pakistan and India to quit –or at least cap- energy cooperation with Iran. The White House wants Iran –its archenemy- to be fettered in every possible aspect. By assuming that Iran’s energy sector is highly vulnerable, Washington tries to pressure Tehran by depriving it of energy partners, one by one. The Peace Pipeline which connects Iran to Pakistan and India –and perhaps China in future- could increase Iran’s maneuverability and mitigate the pressure of U.S. sanctions.

IRD: Pakistan and Iran signed a gas import deal on May 29. Could that be a prelude to signing the Peace Pipeline with India as the third signatory, or will New Delhi refrain from doing so once again?

NS: India’s story is different. Islamabad shows more interest in the Peace Pipeline due to its urgent need of Iran’s natural gas to sustain its economic growth. Natural gas forms 60% of Pakistan’s energy basket. Besides, gas transit fees will be a lucrative income –an amount around 600 million USD- for Pakistan if India joins the deal. That number approximates the 700 million USD per year economic aid Islamabad receives from Washington.

Pakistan’s economic growth –or even economic survival- depends on the Peace Pipeline, which could bring it a remarkable sum of 14 billion dollars in the next 30 years. However, U.S. pressure and the perturbing fact that the pipeline passes across Pakistan -India’s archenemy- leaves New Delhi undecided as yet.

IRD: How serious are the differences between India and Pakistan and how could they affect the project?

NS: Iran could export its gas to India either through the seabed route, or the overland route and LNG (liquefied natural gas) tankers. The ground route which transfers the gas from the Asalouyeh gas field [in southern Iran] through Pakistan to India remains the most cost-effective option to date. But with a nearly six decade-long dispute over the Kashmir region, New Delhi worries that Islamabad could wield the pipeline as a lever to advance its territorial claims.

India is looking for some form of guarantee for a pipeline that traverses the land of its hostile neighbor, and as long as there is no guarantee, there is no future for the project. This is the outcome of a security-oriented policy, but from an optimistic point of view, the Peace Pipeline could mitigate the differences between these neighbors and turn into de-escalation factor.

IRD: India has announced that it will resume negotiations. Do you see any ray of hope?

NS: The Peace Pipeline is a necessity for India. It cannot rely on its domestic sources and the current volume of gas imports from other countries does not meet its energy demands. Iran is the best option for the Indians, but there is a need for a shift in New Delhi’s strategic approach. At the end of the day, India prioritizes cooperation with Washington.

However, partnership with the U.S. has a downside, as it sometimes falls at odds with New Delhi’s strategic interests. India views the Peace Pipeline through the microscope of neo-classical realism. India wants to maintain its close friendship with the U.S., but expects the Americans to consider its strategic interests, too. Washington cannot actually supply New Delhi with its energy demands, so Middle Eastern energy sources, including Iran’s, are crucial for India and it should be given the freedom to choose. If Indian statesmen altogether embrace this attitude, New Delhi will sooner or later initiate energy cooperation with Iran.

Nozar Shafee’i is an Indian Subcontinent affairs analyst.