Energising relations

India ignores U.S. pressure and holds talks on further steps towards the gas pipeline project during Iranian President Ahmadinejads visit.

in New Delhi

IRANIAN President Mahmoud Ahmadinejad, who was on a whirlwind tour of South Asia in the last week of April as part of his governments look East policy, made a working visit to New Delhi on April 29. The visit, the first by an Iranian head of state to India since the state visit of President Muhammad Khatami five years ago, coincided with heightened tensions in the Gulf region.

Around the time Ahmadinejad was holding talks with the Indian leadership on important issues such as the Iran-Pakistan-India (IPI) gas pipeline project, United States Defence Secretary Robert Gates issued bellicose statements against Teheran. He accused Iran of killing American servicemen inside Iraq. The Pentagon announced the despatch of a second aircraft carrier to the Persian Gulf and ordered military commanders to develop new options for attacking Iran.

In a press briefing on the eve of Ahmadinejads visit to the subcontinent, U.S. State Department spokesman Tom Casey suggested that India ask Iran to suspend its uranium enrichment programme and become a more responsible player on the world stage. New Delhi refused to play ball. In a strong response to the Bush administrations suggestion, the Ministry of External Affairs emphasised that India and Iran were both ancient civilisations that are perfectly capable of managing all aspects of their relationships with the appropriate degree of care and attention. Neither country needs any guidance on the future conduct of bilateral relations.

Briefing the media, Foreign Secretary Shiv Shankar Menon made it clear that Iran had the right to gain access to nuclear energy for peaceful purposes.

Washington was irked by the red carpet welcome India and Pakistan accorded the visiting leader at a time when it has been calling for international sanctions against Iran. Senior Bush administration officials have not been circumspect about their views on the India-Iran relations. Last year, the Secretary of State publicly advised New Delhi against pursuing the gas pipeline deal with Iran. In January 2006, the U.S. Ambassador to India, David Mulford, stated that the U.S.-India nuclear deal could be jeopardised if India did not vote against Iran in the International Atomic Energy Agency (IAEA).

New Delhi temporarily succumbed to pressure and voted with the West that year against Iran. That vote facilitated the passage of the United Nations Security Council resolutions against Iran, leading to limited international sanctions on it. The Iranian leadership was, naturally, upset with India over its unexpected position on its nuclear programme but pragmatically decided to close that chapter and move ahead.

New Delhi also adopted go-slow tactics on the gas pipeline negotiations. Nicholas Burns, former U.S. Under-Secretary of State for Political Affairs, had claimed in a lecture at Harvard University that he and Secretary of State Condoleezza Rice had convinced India to stay out of the pipeline project. Rice, in her testimony to the U.S. Congress in 2006, stated that participation in the pipeline project would be a violation of the Iran Sanctions Act that penalises governments investing more than $20 million in Irans energy sector.

In recent months, the Indian governments position on Iran has become more forthright. The United Progressive Alliance government seems to have finally broken free from Washingtons shackles. External Affairs Minister Pranab Mukherjee said recently that the U.S. should not arrogate to itself the role of the IAEA in pronouncing judgment on the nature of Irans nuclear programme. He said in Parliament in the last week of April that the U.S. had no right to pass such a judgment.

But with the U.S.-India nuclear deal put on the back burner, there is a newfound enthusiasm for the IPI gas pipeline project. The subject was on top of the agenda during Ahmadinejads visit. At a press conference in New Delhi, the visiting President, who has been calling the pipeline project the peace pipeline, said that the proposed project would be finalised in the near future. According to reports, Prime Minister Manmohan Singh assured the President that New Delhi was serious about the deal. During his interaction with the media, Ahmadinejad described the U.S. as a declining power which would be forced to leave both Iraq and Afghanistan.

Despite the arm-twisting by the U.S., Pakistan has gone ahead and signed the pipeline deal with Iran. Indian Petroleum Minister Murli Deora was in Islamabad in the last week of April for talks on extending the pipeline to India. Deora told the media that both sides had almost finalised the transit fee. Iran has indicated in recent months that if New Delhi kept vacillating on the pipeline issue, the gas would be diverted to China via Pakistan. Trilateral talks relating to the pricing of the gas and the security aspects are expected to start soon. Ahmadinejad said the talks on the $7.4-billion project would be completed within 45 days.

Shiv Shankar Menon was more cautious in his remarks. He told the media that while the IPI project was doable, there was still a long road ahead as a lot of spadework was required. Echoing Ahmadinejads views, he said the project had the potential to emerge as a confidence-building measure between the three nations.

Disagreeing with Washington on the need to isolate Iran diplomatically, Menon argued that the more engagement there is, the more Iran becomes a factor of stability in the region. He said that the Iranian side did not raise the issue of the Indian Space Research Organisation launching an Israeli spy satellite. The Iranian government was known to be upset as the Israeli spy satellite is specifically targeted at Iran, Pakistan and Syria. The Foreign Secretary said India was willing to cooperate with Iran in the area of space technology but added that there were no specific requests from Teheran so far.

The Indian government seems to have belatedly realised that energy-rich Iran can remove the roadblock to Indias economic growth. Iran is the second largest supplier of oil to India. With global oil prices reaching astronomical figures, the demand for cheaper gas is expected to increase further. There is already a supply-demand mismatch in India. A recent report about the energy scenario in India stated that against an overall requirement of 77 million standard cubic metres per day (mmscmd) of gas between April 2007 and January 2008 only 37 mmscmd was supplied. Iran has 17 per cent of the worlds proven gas reserves. These can meet the gas requirements of India, which are set to quadruple in the next 10 years.

Good relations with Iran would also help India have access to gas from Turkmenistan. Iran wants to be the energy corridor of the region. Iranian gas is finding its way to European countries such as Italy through Turkish pipelines. However, the proposed Turkmenistan-Afghanistan-Pakistan-India pipeline is likely to remain a pipedream, with Afghanistan in turmoil.

Talks are also on to iron out the differences over the pricing of the liquefied natural gas (LNG), which Iran agreed to supply following a contract signed with India in 2005. India and China are major shareholders in a joint venture to develop one of Irans largest oilfields the Yadavaran.

Shiv Shankar Menon said the bilateral talks held during Ahmadinejads visit focussed on the joint venture to develop the Persian Gulf port of Chahbahar, the construction of a highway from the port city to link it with Afghanistan and Central Asia and the 2001 agreement on the North-South rail corridor connecting Iran, Russia and India. The North-South corridor has the potential to provide speedier access to Indian exports to the Central Asian region and Eastern Europe. The Chahbahar port could emerge as a rival to the ambitious Gwadar port in Pakistan built with Chinese assistance.

Another important topic discussed during Ahmadinejads visit was the security situation in West Asia and Afghanistan. Both Teheran and New Delhi have considerable stakes in the West Asian region. Recent statements from Western capitals threatening military action against Teheran, coupled with Israels proclivity for violence against the people under its occupation, have made the situation more volatile. Israel is threatening to go to war against Syria and has indicated that it is keeping its military options open against Lebanon.

In Afghanistan, India and Iran have common strategic interests. Both countries had backed the Northern Alliance in its fight against the Taliban. Now, with a resurgent Taliban extending its influence once again to northern Afghanistan, the two countries have reasons to be worried.

Teheran is well aware that the three South Asian countries he visited are all strategic allies of the United States. At the same time, these countries, especially India and Pakistan, attach great priority to energy security. Their national interests leave them with no option but to have bilateral ties with Iran.