Iran,pakistan india pipeline

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IRAN-PAKISTAN-INDIAPIPELINE: THE BALOCHWILDCARD

For both energy hungry India and its swiftly growing neighbor, Pakistan, the need for

natural gas is more pressing than ever. Pakistan has one of the worlds fastestgrowing populations and its demand for gas will expand significantly over the next

two decades. Indias gas demand will almost double by 2015 and due to the declineof its reserves it will be forced to import increasing amounts of gas. As the worlds

second largest gas reserve, Iran is the most geographically convenient supplier ofgas to both countries.

India considered three transport routes for gas from Iran: shipping it through the

Arabian Sea on board tankers in the form ofLNG, sending it through a deep seapipeline, or alternatively transporting it on land via a 1700-mile pipeline from Irans

South Pars field to India. The latter option means 475 miles of the pipeline will pass

through Balochistan in southern Pakistan.

A land based pipeline would be four times cheaper than any other option, even after

taking into account transit fee payments to Pakistan. But for a long time politicaltensions between India and Pakistan made it difficult for Delhi to accept an energy

project that would create dependence on a neighbor with whom its relations are farfrom stable. Recent improvement in the relations between the two neighbors has

bought India to finally consider joining forces with Pakistan for the mutuallybeneficial pipeline project, estimated to cost around $4 billion. A third of the gas

would be delivered to Pakistan and the rest to India.

For Iran, Indias participation in the project is of paramount importance. In additionto a broader market for its gas Iran hopes to gain political support from India as it is

facing strong international pressure to terminate its nuclear program. In return forIndia's agreement to buy large quantities of gas, Iran has awarded Indian gas

companies major service contracts and also granted them participation in refiningand other energy related projects to the tune of $40 billion. Irans relations with

Pakistan are also strategically important. With American troops stationed inneighboring Afghanistan and Iraq, Iran is trying to check U.S. influence in the region
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by strengthening its ties with Pakistan, one of Americas most needed allies in thewar on terror. The Pakistanis, for their part, would like to see their territory used as a

transit route to export natural gas to India. This would not only guarantee a sourceof income for them but also increase stability in the region. Pakistani Prime Minister

Shaukat Aziz said the Iran-Pakistan-India gas pipeline is "a win-win proposition forIran, India, and Pakistan," that could serve as a durable confidence-building

measure, creating strong economic links and business partnerships among the threecountries.

But this win-win proposition seems to be threatened by terrorists. A few days after

Irans Oil Minister Bijan Namdar Zanganeh arrived in New Delhi to discuss the futureof the pipeline, terrorists in Pakistan blew up two gas pipelines sending a message to

all parties involved that the "pipeline of peace" might be anything but peaceful.

The area of the Balochistan-Punjab border where the pipeline is supposed to run isone of Pakistan's poorest areas and its most restive province. In recent years it has

been a battleground of private militias belonging to Baloch tribes. Sporadic armed

clashes resulted in attacks against water pipelines, power transmission lines and gasinstallations. Yet, the region strategically important due to its large reserves of oil

and gas. But these riches did little for the Baloch tribesmen. Over the yearsIslamabad has failed to provide a fair share of the oil and gas wealth. Lack ofeconomic progress and a deep sense of disaffection has contributed to the distrust

between the federal government and the Baloch people. As a result, the tribes nowoppose any energy projects in their area. In January 2003, sabotage of a gas

pipeline from Sui cut off supply to the Punjab. Later, in June, a wave of attacksagainst gas installations caused the government to send troops to protect the

installations. For the rest of 2003 and the following year the confrontation wasdefused but the underlying grievances of the local population were not addressed. To

calm the area Islamabad recently added carrots to its policy of sticks by increasinginvestment in regional development projects. However, it seems that violence has

resurfaced and the region is sliding into a near war situation.

On the night of January 8 terrorists belonging to the Baloch Liberation Front (BLF)fired rockets at the pipeline and exchanged gunfire with the security forces for

several hours. During the fire exchange the pipeline caught fire, disrupting supply toa power plant. Six people were killed. In a separate incident the BLF launched an

attack on the pipeline close to Sui township, 250 miles north of Karachi. This areaalone produces about 45 percent of Pakistans total gas production. Some rockets

also exploded close to the main pipeline supplying gas to Sindh and Punjab provincesbut did not cause any damage. On January 11 Baloch gunmen stormed facilities

operated by state-run Pakistan Petroleum Ltd (PPL) in Sui. The gunmen overpoweredthe guards and damaged pipelines and a purification plant. Gunmen also Kidnapped

10 employees of the Water and Power Development Authority (APDA), Pakistans

main water and power utility. The attacks disrupted gas and power production as well

work in fertilizer and chemical plants.

Many in the region believe that the recent attacks in Balochistan province are meantto sabotage the pipeline project as well as other projects connecting Sui gas

installations with the Turkmenistan gas fields. If true, these pipeline attacks areunsettling and will raise to the surface India's concerns about the reliability of the

project. The possibility of sabotage of the proposed Iran-India pipeline by militantgroups in Pakistan is becoming increasingly feasible as terrorists learn from their

allies in Iraq about the strategic gain in conducting a sustained sabotage campaign
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against oil infrastructure. This is especially true after last months exhortation byOsama bin Ladin to his cohorts to target oil pipelines in the Persian Gulf. In the next

few weeks India will have to make a final determination if it wants to join thepipeline project. If Pakistan truly wants India to share the burden of the project it

should demonstrate to Delhi that it can ensure security and stability along thepipeline route.

Pakistan's President Pervez Musharraf warned the Baloch tribesmen to stop their

violence, threatening to use force: "Don't push us... it is not the 1970s, and this timeyou won't even know what has hit you," he said, referring to a crackdown in the

1970s on separatists in the area. As we have seen in other parts of the world wherepipelines are under attack, ending the onslaught may well prove to be mission

impossible. Nevertheless Islamabad has already indicated that the pipeline projectwill be pursued even were India to decide not to join.

Gal Luftis Executive Director of the Institute for the Analysis of Global Security.

Pipeline deal 'soon', says India

India will soon sign an agreement with Iran and Pakistan to const

billion dollar gas pipeline, its petroleum minister has said.

Murli Deora said some "minor problems" over the pipeline had been sorted out.

The pipeline will transport gas from Iran to India through Pakistan, and is seen as crucial to Ind

Analysts say the pipeline could contribute to regional security as Iran, Pakistan and India would

more.

A deal has been stalled by disputes over transit fees and security issues.

Mr Deora, who attended a meeting of leading oil exporting countries in Saudi Arabia, told an Ind

the agreement to construct the pipeline would be signed "very soon".

"There were... some issues with Pakistan that have been taken care of," he said.

In April, Iranian President, Mahmoud Ahmadinejad, had told the Indian Prime Minister, Manmoh

obstacles holding up the long-delayed project would be resolved within 45 days.

The 2,600-km (1,620-mile) pipeline would initially transport 60 million cubic metres of gas (2.2b

The Indian government has said the project is feasible, but needs to be financially viable with as

The pipeline is crucial for India's energy supplies
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India has boycotted trilateral meetings since mid-2007, saying it wants to resolve the issues of t

transportation tariffs with its long-standing regional rival Pakistan first

Analysis: Iran-Pakistan-India Gas Pipeline Imperiled (2005)

By Bill Samii

As the owner of the world's second-largest proven natural gas reserves, Iran is keen toexploit this resource as a source of revenue. It is therefore pursuing gas export deals witha number of countries.

One of the biggest potential customers so far is India, and negotiations for a pipelinestretching across Pakistan have been going on since the mid-1990s. A recent flurry of

diplomatic visits suggested that the deal was about to be concluded, but U.S. securityconcerns and Indian anger over Iranian business practices are putting this in doubt.

Iran and India signed an agreement for an overland natural gas pipeline in 1993, and in2002 Iran and Pakistan signed an agreement on a feasibility study for such a pipeline.India-Pakistan tensions over Kashmir and related security concerns have delayed theproject. In late-February and early-March diplomats from all three countries said a dealwould be signed soon, and Iranian Foreign Minister Kamal Kharrazi said the pipelinewould be 2,700 kilometers long, and India would buy 7.5 million tons of LNG [liquefiednatural gas] a year for 25 years (see "RFE/RL Iran Report," 7 March 2005).

On 16 March, however, Indian Petroleum Minister Mani Shankar Aiyar announced thathis country might withdraw from the gas deal. "We will not buy gas from Iran if wecannot sell it in India," Press Trust of India reported him as saying. Aiyar explained thatIran wants to charge as much for natural gas as it does for LNG (about $4 per millionBritish thermal unit [MBTU]), whereas the main Indian consumers -- the fertilizer andpower sectors -- are unwilling to pay more than $3 per MBTU. With the addition oftransportation and transit charges to the Iranian price, Aiyar said, the gas would end upcosting $4.50 per MBTU. Aiyar added that India and Pakistan will need approximately200 million standard cubic meters of gas daily, and Iran should offer a special price forsuch a large order.

Tehran, furthermore, is insisting on a "take-or-pay" agreement, in which India must payfor the agreed amount of gas even if it does not take delivery of it, Press Trust of Indiareported on 9 March. India reportedly prefers a "supply-or-pay" contract, in which Iranmust deliver gas to the Indian border or pay for the contracted quantity. Tehran alsorejected India's request for natural gas that is rich in petrochemicals, preferring instead todeliver "lean" gas that does not contain butane, ethane, or propane.


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It could be a coincidence, but Aiyar's suggestion that the deal could fall through comes atthe same time that U.S. Secretary of State Condoleezza Rice is visiting India andPakistan. In fact, she referred to the proposed pipeline during a 16 March pressconference in New Delhi, RFE/RL reported. She said, "We have communicated to theIndian government our concerns about gas pipeline cooperation between Iran and India. I

think our ambassador has made statements in that regard and so those concerns are wellknown to the Indian government."

The timing of the Indian petroleum minister's comments suggest that New Delhi ispressuring Tehran for a better deal, and it could be taking advantage of Rice's visit toleverage its position.

India's Other Suppliers...

India is a huge and growing natural-gas market. According to the Energy InformationAdministration, natural gas use was nearly 25 billion cubic meters in 2002 and is

projected to reach 34 billion cubic meters in 2010 and 45.3 billion cubic meters in 2015.India produces gas and has worked with outside partners -- including Bechtel, Gaz deFrance, General Electric, Total, and Unocal -- to increase production, but it is looking toother countries to fulfill its requirements.

One idea is to connect Bangladesh's natural gas reserves with the Indian gas grid. Burmacould be a source of natural gas, too. Two Indian companies -- Oil and Natural GasCorporation (ONGC) and Erstwhile Gas Authority of India, Ltd (GAIL) -- own equity inBurmese natural gas reserves, and Burmese officials have indicated an interest in runninga pipeline to West Bengal in India.

Qatar --with the world's third-largest natural-gas reserves (14.4 trillion cubic meters) -- isanother competitor for the Indian market. India's Petronet and Qatar's Ras Laffan LNGCompany (Rasgas) signed an agreement for the provision of 10.3 billion cubic meters peryear of LNG, and deliveries began in January 2004, according to the Energy InformationAdministration.

Indian Petroleum Minister Aiyar visited Moscow and Kazakhstan in late February todiscuss energy issues. He reportedly said that India is willing to pay $2 billion for a 15percent stake in Yuganskneftegaz, "The Financial Express" reported on 12 March. Healso said India could invest $25 billion in the entire Russian energy sector. India's cabinetrecently authorized discussion of the Turkmenistan-Afghanistan-Pakistan Natural-Gas

Pipeline Project (see "RFE/RL Afghanistan Report," 25 February 2005). Iran does not,therefore, have a stranglehold on the Indian market.

...And Iran's Other Markets

Iran natural-gas reserves is an estimated 26.6 trillion cubic meters, according to theEnergy Information Administration, but the country only produced about 76.5 billion


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cubic meters of natural gas in 2002. Most of that gas was used domestically, althoughIran did export to Armenia and Turkey.

Iran is eager to reach other markets. Iranian Petroleum Minister Bijan Namdar-Zanganehand Omani Oil and Gas Minister Muhammad bin Hamad bin Sayf al-Rumhi on 15 March

signed an agreement on the export to Oman of 10 billion cubic meters of natural gasannually, beginning in 2006, IRNA reported.

The same day, Zanganeh and Kuwaiti Energy and Oil Minister Ahmad Fahd al-Ahmadal-Sabah signed a deal for the export to Kuwait of 10 million cubic meters of natural gasa day, beginning in late 2007, IRNA reported. Zanganeh said the deal with Kuwait isworth more than $7 billion over 25 years. He went on to say that the legal documentsrelating to the deal will be drawn up in a few months.

Earlier in March the possibility of Ukraine purchasing 15 billion cubic meters of naturalgas from Iran every year was discussed at an Iran-Ukraine energy commission meeting in

Kyiv. Two pipeline routes are being considered -- Iran-Armenia-Georgia-Russia-Ukraineor Iran-Armenia-Georgia-Black Sea-Ukraine. Other countries that have signed gas-related memoranda or at least discussed the topic with Iran include Austria, Bulgaria,China, Greece, Italy, and Turkey.

Iran likes to present every meeting as a major accomplishment by staging the signing of amemorandum of understanding, but these are not binding contracts. Conclusion of thedeal with India is potentially very important for Iran, because it will curtail some of itspolitical isolation and will earn it a place in the international gas market. But Tehran'spricing policies and Washington's opposition may scuttle this effort to breakout.

Bill Samii is a regional analysis coordinator with RFE/RL Online and editor of the"RFE/RL Iran Report." He earned his Ph.D. at the University of Cambridge. His researcharticles have appeared in the "Middle East Journal," "Middle East Policy," and the"Middle East Review of International Affairs (MERIA) Journal." He has contributed toseveral books about the Middle East.

"Iran-Pakistan-India Pipeline: Is It a Peace Pipeline?"

Magazine or Newspaper Article, MIT Center for International StudiesAudit of the Conventional Wisdom, volume 7, issue 16

September 2007

Author: Abbas Maleki, Senior Research Associate, InternationalSecurity Program

Belfer Center Programs or Projects: Energy Technology InnovationPolicy; International Security; Science, Technology, and Public Policy
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A major natural gas pipeline that would stretch from the fields ofsouthern Iran to Pakistan and India itself a remarkable prospect is being planned. But it faces serious hurdles, not least the fierce

opposition of the U.S. government.

The history of relations between Persia and the Indian subcontinent ismore than 2000 years old. Until 200 years ago, Persian was thelanguage of literature and government in India. After separation ofPakistan from India, Iran faced a dilemma of its relations with thesetwo new states. During the Shah's era, Iran preferred to have closerelations with Pakistan, although economic ties with India were notignored. After the collapse of the Soviet Union and Pakistan's supportof hardliners in Afghanistan, Iran found India as a new partner in Asia.India has been slowly but surely forging a comprehensive relationshipwith Iran on energy and commerce, infrastructure development, andmilitary ties. Iran looks to India as a developed, democratic, andpolitically lucrative country for cooperation. For instance, some 8,000Iranian students are studying in India, compared with 2,000 in theUnited States.

A big market for India, Iran has the world's second largest oil and gasproven reserves, and acts as an important access route for India toCentral Asia and Afghanistan. Case in point: India is seeking newroutes to reach to Central Asia. One of them is the North-South

Corridor, which links India to Russia and all of the former Soviet Unionvia the Persian Gulf, Iran and Caspian Sea. Iran's considerations areboosting trade, having secure borders, and avoiding "encirclement" byAmerican proxies. At the same time, Iran is opposed to the hegemonicpresence of the United States and its troops in the Indian Ocean. Indiahas not been hesitant to play the Iran card to draw concessions fromthe United States on other matters of bilateral concern. So the pipelineis freighted with more significance than merely the delivery of naturalgas.

Iran-Pakistan-India Pipeline: Is it Possible?

Youth Ki Awaaz, Wednesday, June 3, 2009
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Harsh Kothari

The blend of American and Iranian tensions and the tensions between India and Pakistan in a neo-liberal

global order has formed a situation for India. India can neither adopt the decision to implement the Iran-

Pakistan-India gas pipeline, nor can she abandon the pipeline because the stakes of energy security and

geopolitics are too high for India to be able to afford losing the pipeline. Furthermore, the unfolding of

various events since the formation of the Indian and Pakistani states in 1947 has influenced the fate of the

trans-Pakistan gas pipeline.

For this reason this dissertation analyzes various factors and relationships in a complex set of geopolitical

relations in a globalized world, which influences the fate of the trans-Pakistan gas pipeline. In view of the

various geopolitical problems, the ultimate argument of this essay is that India should delay the gas pipeline

project until the various geopolitical tensions are ironed out in the future.

What international political constraints is India facing in relation to the Iran-Pakistan-India pipeline? What

international political tactic should India pursue with to suit her interests in relation to the Iran-Pakistan-India

pipeline?

This issue can be divided in 5 parts.
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Part one: Introduction: The Need for a Gas Pipeline

At an age of globalization and interdependence, India, the largest democracy in the world, with a population

of more than one billion people has been economically growing at the rate of more than 8%1 until the

financial crisis began. Even then, a third of the population is living below the poverty line.2 In pursuit to uplift

the poor, and at the same time continue a steady growth rate at a globalizing age and become a super-

power, India is and will be heavily dependent on hydrocarbon energy.3 To acquire the required

hydrocarbons, Indias foreign policy must tackle the foreign policy of other States who have conflicting

interests not in energy related matters alone but also in overall security issues. The following dissertation will

discuss the vitality of the Iran-Pakistan-India (IPI) gas pipeline, and will analyze the foreign policy constraints

that India is facing in relation to the IPI gas pipeline. This dissertation will further investigate to emphasize

what the ideal foreign policy for India ought to be in response to the challenges and constraints faced in

pursuit to the IPI gas pipeline.

Before this dissertation continues the discussion of the IPI gas pipeline and the foreign policy in relation to

that, it is paramount to first understand the phrase energy security. Daniel Yergin4 mentions that energy

security for countries like India, lies in their ability to rapidly adjust to their new dependence on global

markets, which represents a major shift away from their former commitments to self-sufficiency.5 However,

this articulation of energy security, whilst relevant, does not suffice because it is not broad enough to

consider the various factors such as the cost and availability of energy when a nation like India considers

energy security, hence Talmiz Ahmads6 articulation of energy security as the assured, where possible,

exclusive access to energy resources at affordable prices to obtain sustainable growth rates and national

economic development7 helps relate the issue of the IPI gas pipeline to energy security. Furthermore, Shiv

Kumar Vermas8, while mostly echoing Yergins9 notion of securing energy helps understand the meaning

and requirements of energy security in Indias context to the trans-Pakistan pipeline. For India to be

secured with its energy it firstly has to diversify her sources of energy, so that there is higher resilience from

disruptions.10 Though in a globalizing world where there is much dependence on external countries, India

must recognize the need to integrate with well informed institutions11 in order to gain more feedback about

the energy markets. By ensuring the above, India would be able to comfortably face disruptions caused by

political or technical realities12, and would also be able to forecast and calculate the political and

commercial maneuverings globally with the use of more information. In order for India to achieve this, it is

paramount for India to strongly consider the trans-Pakistan gas pipeline option in order to secure energy

since it will help India tap into the Iranian energy market, which will diversify sources for Indias gas


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consumption, making India more resilient to withstand energy shocks, and will also help India be more

informed of the hydrocarbon market through collaboration and cooperation with energy producing nations

like Iran and institutions related to it such as BHP Billiton or Donner Gas.

However, in order to understand Indias strive to energy security, it is important to note that the IPI gas

pipeline is a proposal that comes with a package of intense geopolitics. Thus, it is crucial to understand the

meaning of the term geopolitics. Coming up with a definition for geopolitics is notoriously difficult.13One

possible definition for geopolitics, as coined by Rudolf Kjellen in 1899, which Gearoid Tuathail14 expresses

is the relationship between the physical earth and politics.15 However, this definition is too broad to directly

apply in a neoliberal global order, especially in the context of the IPI gas pipeline. Tuathail16 therefore sheds

light by describing geopolitics in todays world as the politics that deals with a world dominated no longer by

territorial struggles between competing blocs but by emerging transnational problems like terrorism, nuclear

proliferation and clashing civilizations.17 This notion of geopolitics suits this essay ideally because issues

like terrorism, nuclear proliferation and the clashing interests of various states undermines the trans-national

gas pipeline, hence creating a problem, not only in the area of energy security but also in overall security

matters for states such as India and America. With this said, when analyzing Indias geopolitical situation, it

is important to understand the advantages and threats that India faces, since this scenario will influence

Indias maneuverings and decisions on the IPI gas pipeline.

Furthermore, before embarking on the constraints of the IPI gas pipeline, it is vital to contextualize the

pipeline in Indias energy situation. At this point, India is the fifth largest consumer of energy, and by 2030 it

is expected to become the third largest consumer of energy, overtaking Japan and Russia.18 In the current

energy mix of India, gas accounts for 8% of the total energy and is expected to be 10% by 2030.19 In fact

India consumes 49 billion cubic meters of gas, and can even potentially source 52 billion cubic meters

domestically.20 Based on these figures, it may seem that India may just manage being largely self-sufficient

with its domestic gas sources, hence the IPI gas pipeline may seem unnecessary. However, it is paramount

to consider that electricity is arguably the most vital element that would guide India to be a greater economic

power than it is already. Therefore it is imperative to acknowledge that currently there is a shortage of

electricity of 11% at peak supply times.21 This shortage subsists where the supply of electricity already

exists, but one must also consider that 17.8% of Indian villages do not even have access to electricity22,

and 10% of the electricity is sourced from gas.23 As such, by 2024-25, India expects to have a gas demand

of 125 billion cubic meters24, leaving a gap of a staggering 75 billion cubic meters25. In fact, 25% of the

Indian gross domestic product (GDP) is based on Industry26, so it is even more important for India to have


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enough electricity to support her growth rate in the industrial sector. In addition to that the Indian government

also seems to be trying to persuade its citizens to be more dependent on compressed natural gas (CNG) in

order to run their vehicles27 because the Indian government believes that, as Talmiz Ahmed28 puts it,

"Natural gas, being a 'clean' fuel, is increasingly seen as the fuel of the 21st Century."29 In fact, Rahul

Tongia30 further adds that natural gas has extensive domestic uses, some of which include, cooking,

generating electricity, and aids in the fertilizer and petrochemical industries.31 Furthermore, most buses in

New Delhi are meant to be converted into CNG run vehicles, just like the rickshaw, which is a mass source

of public transport in India.32 For this domestic reason, it is important for India to consider the IPI gas

pipeline option.

In order to present my argument coherently in regards to the trans-Pakistan pipeline, I will firstly discuss the

geopolitical situation of India and the challenges India faces that both prompts and deters India to consider

the IPI gas pipeline. However, the geopolitics of India today cannot be separated by the notion of neo-

liberalism since the idea of complex interdependence33 is rather relevant in understanding Indias

dilemmas and constraints when considering the IPI gas pipeline, even though the notion complex

interdependence has been deliberated in relation to information and power rather than transnational

pipelines specifically.34 Furthermore, this dissertation will discuss Indias dilemma caused by the rift

between America and Iran, followed by the tensions between India and Pakistan, which influence the

tensions in implementing the IPI pipeline. Additionally, I will discuss how India should pursue with the IPI

pipeline and its politics throughout the essay. Overall, I will be arguing that India must not under any

circumstance abandon the pipeline project, since it will undermine Indias geopolitical and energy interests.

At the same time I will also maintain the stance where I advocate that India at this point, cannot afford to

infuriate the American government by supporting Iranian foreign policy so openly, nor is India in a situation to

open arms of friendship with Pakistan entirely. Hence my final argument will be that India should take a

middle ground between Iran and America, and at the same time resolve other matters that are more relevant

to the India-Pakistan tensions before the Iran-Pakistan-India pipeline is implemented. Therefore the best

option available is to delay the gas pipeline until the opportunity to implement the proposal ripens.

Part two: The Neo-Liberal context of Indias Geopolitics.

The Iran-Pakistan-India gas pipeline, also known as the trans-Pakistan gas pipeline35 or the peace-


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pipeline36 is an opportunity for Iran, Pakistan and India to be interdependent on each other37 in pursuit to

peace and energy security. For Iran, this pipeline will mandate energy security because it will tap into the

South Asian markets in order to earn revenue for the country38, whilst India and Pakistan, who have high

energy demands39, would find the import of gas through a pipeline at a reasonable price to be a boon.

Amanullah Khan Jadoon40 phrases that, The South Asia region will benefit from the Iran-Pakistan-India

pipeline project as it will provide a foundation for future economic growth, peace and cooperation throughout

the region."41 However, there are various geopolitical challenges to the trans-Pakistan gas pipeline project

that include terrorism and nuclear proliferation. The following chapter will outline what the major challenges

are for India that links to the trans-Pakistan gas pipeline when considering energy security in a neo-liberal

world order. Furthermore, throughout the chapter, it will be emphasized that India should neither abandon

nor embark upon the pipeline project since it is necessary for India to balance her actions in geopolitics to

suit her interests.

Joseph Nye and Robert Keohanes42 notion of complex interdependence43, which analyzes various

transnational issues44 helps us understand how India considers various networks of relationships in

pursuit to deciding whether the trans-Pakistan gas pipeline can be implemented or not. The most important

evaluation that India has to make is whether she can achieve her national objective of energy security with

the given gas pipeline project and at what expense. At this point, the theory of neo-liberalism, whereby

security and force matter less and countries are connected by multiple social and political relationships45

is relevant in understanding both the opportunities and challenges that come with the possible

implementation of the trans-Pakistan gas pipeline. Nye and Keohane46 acknowledge that military force still

plays a significant role in relations between states, and in a crunch, security still outranks other issues in

foreign policy47. This acknowledgement helps describe Indias dilemmas that weigh the possibility of

having a 2,775 kilometer pipeline48 with a diameter of 44 inches49 that can help India save $300 million per

year in energy transport50, and about $10 billion over a decade because of cheaper gas through a gas

pipeline51 with a volume capacity of at least 3.2 billion cubic feet per day (BCFD)52 against risks of possible

pipeline disruptions that may be caused in turbulent areas of Baluchistan in Pakistan that runs for 475

miles53, or for that matter being sucked in the political baggage of the key regional and geopolitical players

that are somehow linked to the trans-Pakistan gas pipeline. With this dilemma in mind, the importance of

neo-liberalism marks a grave sense of importance because although there is the concern of national security

for India, and even though Indias major political rival, Pakistan, is involved in the pipeline, the mere fact that

both India and Pakistan strive for energy creates a situation where they both are prepared to consider a

proposed pipeline that could make the two rivals heavily interdependent. Nonetheless, the subsequent


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paragraphs, will evaluate the geopolitics of the trans-Pakistan gas pipeline in linkage to neo-liberalism, and

will serve as a precursor of the explanation for Indias relationship with Iran and America, and Pakistan,

which would be further explained in succeeding chapters.

As mentioned in the introduction, Indias economy is growing at a rapid rate, and so in order to be able to

meet the energy demands, India will need more sources of energy, and one of them is gas, which comes

from the South Pars of Iran54. Although India has various sources of partnerships and synergy from where

hydrocarbons can be imported from, such as the Gulf countries like Saudi Arabia, and also other countries

from around the world like Russia, Kazakhstan, Uzbekistan, Turkey, and Nigeria55, it is still in Indias interest

to further look for more partners with reliable quantities of energy. Furthermore, it is noteworthy to remark

that Iran holds 16% of the gas reserves in the world56, which also makes the Iranian gas reserves the

second largest in the world after Russia57. This means that the gas that would come from Iran into India is

most likely not to dry out soon; In fact, Shiv Kumar Verma58 suggests that Iranian gas could supply India for

the next 200 years59. Interestingly however, Talmiz Ahmed60 contradicts Verma by estimating that

hydrocarbons will not last for more than 60 years in the world at this rate of consumption61. Vermas figure

however, seems more convincing because Ahmed does not consider that a lot of the gas in Iran has not

been exported because of American sanctions imposed on Iran, which is caused due to Irans nuclear

enhancement62. Furthermore, Verma also explicitly noted that the Iranian government claims that their gas

will last for another 500 years63, and Ahmads estimation of only 60 years maybe coming from what the

Indian government estimates since Ahmad is an Indian diplomat64. Therefore, he may only present figures

that the Indian government officially estimates. Hence, it is important to consider that Iran is in a better

position to judge how much gas they have and how long it will last than India simply because they are closer

to that resource. The larger point is that America dissents any collaboration with Iran, which is illustrated by

the sanctions that restrict any party to invest more than $20 million in the Iranian hydrocarbon industry65.

The Indian government, on the other hand, is still open to consider Iran as a mutual partner. For India,

however, the rift between Iran and America is a strong dilemma that has occurred due to the emergence of

neo-liberalism. Indias strong economic ties with the United States is important for India according to

Stephen Cohen66 because India needs American investment and technology67 when considering that

India is a critical supplier of software and other computer products68. Such a relationship has led a sense

of strong interdependence between India and America. The finalization of the civil nuclear energy agreement

between India and the United States, which happened after the Senate and the Congress, passed the bill on

the 28th September and 1st October 2008 respectively69, has further increased the interdependence

between the two countries.


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With American pressures to discourage India to not collaborate with Iran, as Sharmila Chaudhary implies70,

a country with whom India has an agreement to import 7.5 million tonnes of liquefied natural gas (LNG) for

25 years from 2009 onwards71, becomes difficult because India has to please both the countries and at the

same time disappoint both because of the complex relations and interdependence that exists between the

concerned countries in relation to the trans-Pakistan gas pipeline. Hence, it is evident that neo-liberalism

and complex interdependence is an important factor in understanding the options for India in securing the

gas pipeline. In order for India to secure energy in a neo-liberal global order it is important to maintain

relationships with both America and Iran. When considering the massive opportunities that lay with the

implementation of the gas pipeline for India, it is illogical for India to afford to abandon it, yet at the same

time to jump into it by disappointing America also seems unfeasible. Hence the most palpable option is to

weigh out the options over time by balancing the interdependence that India has with Iran and America, and

using the interdependence to Indias advantage.

Whilst the acknowledgement of the vitality of neo-liberalism is important in determining Indias behavior in

pursuit to energy security and the trans-Pakistan gas pipeline, the realist assumption about the dominance

of military force and security issues remain valid72 in establishing Indias actions. This is especially true

when considering the relations between India and Pakistan. Sumit Ganguly73 explains that India and

Pakistan have been rivals since the British colonial withdrawal from the subcontinent in 1947.74, and since

then the most vital issues has been the Kashmir crisis75. Ganguly further implies throughout his book that

unless the Kashmir issue is resolved, peace between the two countries is unlikely76, which is rather

convincing because in most conflicts and tensions that India and Pakistan have had, the Kashmir question

has been the center piece of attention. For this reason India has made sure that she has been spending on

her defense adequately with a figure of 45432.26 crore (1 crore equivalent to 10 million) rupees for 2007-

2008 according to the Annual Indian Defense Report77 in order to ensure that rivals such as Pakistan, and

for that matter even China are deterred from entering in any military operation against India, as implied by

the defense report at various instances78. This system however has led to the emergence of a complicated

type of warfare in the subcontinent, that of terrorism, which was seen during the 60 hour terrorist siege of

various prime buildings in Mumbai79. Interestingly India has managed to gather enough evidence against

Pakistan to conclude that terrorist activities in India are supported by the Pakistani government80.

Unfortunately, this does not undermine the notion of neo-liberalism alone but also the plausibility of the

trans-Pakistan gas pipeline being implemented. However, for Pakistan this gas pipeline is worth $14 billion

of income over 30 years81, and $700 million of income every year through transit fees from India82. In


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addition to that Pakistan has been suffering from severe shortage of foreign exchange83. Taking this into

account, the trans-Pakistan gas pipeline could result to be a massive boon to Pakistan, but this could only

happen with the support of India. Since Pakistan is not too keen on being dependent on India for this

pipeline, it is looking for new partners such as China, who may join the pipeline running from Iran to Pakistan

if India will not take part in the pipeline84. Despite the hostility between India and Pakistan, the time of

globalization, and the transnational nature of energy constraints have forced the two countries to strongly

consider a pipeline that will make the two of them interdependent. In fact, Pakistan can potentially import

gas at quantities of 2.8 billion cubic feet per day through the pipeline85, which can cover up the natural gas

demand and supply gap of 0.8 BCFD as of 200586. It is therefore only logical for Pakistan to take every

effort to pursue with this pipeline. However, unless India is not a part of this project, Iran may not be too

keen to export this gas to Pakistan because the volumes may not be high enough for Iran87 despite the

availability of funding for the pipeline. This scenario blends in rather smoothly with the concept of neo-

liberalism because although there are hostilities, the need for cooperation and integration for a transnational

project supersedes the coercive nature of an offensive state, such as Pakistan. For India this project is

definitely worth considering because it is an opportunity to have Pakistan be dependent on India, whilst at

the same time the risks of cooperating with a hostile nation also exists. Nevertheless the focal point is that at

a time of globalization and, when sustaining a growing economy is at the forefront of Indian priority, the

Indian government is induced to consider the trans-Pakistan gas pipeline to attain energy security against

overall state security.

To further assert the importance and linkage of complex interdependence to the trans-Pakistan gas pipeline,

it is important to gather in the China factor. If China may be prepared to fund Pakistan for this gas

pipeline88, then China must be considered as a vital element in the pipeline equation. Chinas ulterior

motives in being part of the pipeline is possibly to restrict India from getting the energy boost from Iranian

gas imports, and at the same time create a strong rapport with Iran and Pakistan, and hence take an upper-

hand in Chinas geopolitical situation in comparison to India. As such India and China are rivals, and they

have even had a war in June 196289 over a border dispute in the Aksai Chin region90. However, contrary to

the expected competition between the two countries, the two countries are drawn in to a situation whereby

they are compelled to cooperate and collaborate with each other in the energy sector. The production of

hydrocarbons in India and China put together accounts for only 2% of the worlds production91; in contrast

India and China are responsible for the 35% growth in hydrocarbon consumption in the world92. India and

China account for a third of the world population, and so their energy needs would be similar. With such

similarities, both the countries have acknowledged the need to cooperate. This was evident when a high


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level Indian delegation went to China when one of the Chinese delegate said that the two countries have

great potential of cooperation. They further agreed to cooperate bilaterally on various matters including

joint ventures in exploration and production of energy resources, and refining petrochemicals, and even in

upstream exploration and production. Nonetheless, China does continue to try and disrupt Indias energy

security by supporting coercive Pakistani intentions by, for example, helping Pakistan test their cruise

missiles93 and supplying advanced fighters- the JF-7 and the F10 to Pakistan.94 This juxtaposition is

created because of the emergence of a neo-liberal global order, where even countries like India and China

that are also fundamentally rivals see opportunities to cooperate with each other despite the fact that the

Chinese keep trying to cut Indias security down, in order to, arguably disrupt the trans-Pakistan gas pipeline

project to undermine Indias energy interests. This scenario is linked to a globalized world order also

because bilateral exchanges between Indian and Chinese companies have been intensified95. So it only

makes commercial sense for the two countries to cooperate with each other on certain energy matters, yet

at the same time the two are wary of each other from a security point of view, hence creating a unique

geopolitical oxymoron.

An important aspect of neo-liberalism is that international politics is not constrained just to the states or

supra-national organizations such as the United Nations. Neo-liberalism allows Non-governmental actors

have much greater opportunities to organize and propagate their views96, these can include corporate

companies as well, because, as Anne Mette Kjaer97 articulates, financial markets have become

increasingly integrated98. For example some companies have found a vested interest in participating in the

trans-Pakistan gas pipeline, of which one of the major company being BHP Billiton Ltd.99 As such the

history of the trans-Pakistan gas pipeline dates back to 1989 when Pakistan floated the idea of an overland

pipeline from Iran to Pakistan100, and interestingly BHP Billiton Ltd. With the support of Australia conducted

a feasibility study for Pakistan without charging any fees101. This portrays the dependence of states on non-

state actors. Then, in 2003, BHP Billiton Ltd was assigned to assess the gas pipeline102, and the results

seemed rather favorable. The company also projected that Pakistan, from the pipeline, will gain 60 whilst

India 90 million metric standard cubic meters per day (MMSCMD)103. The dependence of Iran, Pakistan,

and India to rely on the information given by BHP Billiton, an external party beyond the three states,

explicitly shows that at some point or the other there is some interconnectedness between the three

countries despite the existing cynicism. From a financial perspective, $7.5 billion104 is a steep task to get

funds between the three countries. However, according to Narsi Ghoban105, An Iranian Company called

Donner Gas in Dubai recently secured a contract from Iran to pipe gas to Dubai.106 As such the initial

public offering (IPO) in the Dubai stock market was worth $660 million107, and most fortunately for Iran the


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company eventually raised $78 billion108. Therefore, it is possible to raise three to four billion US dollars for

an international pipeline such as the India-Pakistan-Iran pipeline.109 This information helps us further link

the notion of complex interdependence because various institutions and states link in directly or indirectly to

contribute to, in this case, the trans-Pakistan gas pipeline. Such sort of interdependence means, for India,

the opportunity to communicate and collaborate with various institutions, states, and individuals. This

ultimately will mean that India will have her ears closer to the ground to understand the energy market

better. This would enable India to play a more proactive role in the global energy sector, and ultimately suit

her own interests through the network by being more informed, hence more calculated, and at the same

time finding access to a variety of sources, thereby making India a more resilient country in energy security.

Finally, Joseph Nye and Robert Keohanes110 notion of complex interdependence111 helps us understand

how India considers various networks of relationships in pursuit to deciding whether the trans-Pakistan gas

pipeline can be implemented or not. However, the decision is not going to be black and white, because

whilst neo-liberalism persists in guiding the fate of the trans-Pakistan gas pipeline, the realist notion of the

importance of security continues to emerge to fight the neo-liberal global order, hence becoming an obstacle

for the implementation of the trans-Pakistan gas pipeline. For the United States of America, the Iranian

nuclear enhancement is seen as a security risk112 for which reason America is isolating Iran in order to

ensure that the nuclear enhancement remains for civilian uses only113. This sense of skepticism creates a

situation whereby the American government does its best to ensure that the allies of America do not

encourage any financial developments with Iran, which would help Iran build economically to support the

nuclear enhancement programs. At the same time Iran would try hard to undermine American hegemony

and try to dodge sanctions by forming alliances with South Asian countries like India and Pakistan. On the

other hand India and Pakistan themselves have had a tense history since their independence from British

rule114, and the fact that the two countries have been at war thrice does not help the development of the

trans-Pakistan gas pipeline even though both of the countries are aware that cooperating for this pipeline

would ultimately benefit their energy needs. In the long-run, with the continuation of a neo-liberal global

order, companies such as BHP Billiton and Donner Gas may continue to play a significant role in

determining the behavior of states in relation to a particular project or an issue. Hence, when considering

Indias take on the current pipeline scenario, it is important that the country continues to uphold the spirit of

neo-liberalism, since it is the idea that time has chosen. With this said, India should communicate, and

collaborate with every country that plays a geopolitical role in relation to the trans-Pakistan gas pipeline. The

problem with this is that various states would have conflicting interests, and India becomes the state in

between that needs to wriggle through these conflicting interests like with the case of Iran and America.


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Finally, Girijesh Pant115 argues concisely that India will not kill the project but is neither desperate.116 By

this he implies that India will delay the pipeline until time has ripened to suit Indias political interests, and

this is precisely what India ought to do. Pants argument, however, is counter-argued by Ahmad117 who

states that the project is based purely on a commercial basis and not to permit any whiff of politics to

influence the negotiations."118 Ahmads argument however is unconvincing because interdependence

between the geopolitical actors has increased to such an extent, that although there is a need to implement

the pipeline for Iran, Pakistan and India, the relationship between each of these countries with companies

and nations like the United States alike forge to create a complicated set of geopolitics making any progress

on the pipeline rather difficult.

Part Three: India and the Iran-America rift

The United States of America and Iran have a bitter relationship. This creates various repercussions to

Indian foreign policy since India has cordial ties with both, Iran and America. In fact, it is in Indias interests

to have close ties with Iran, a country with 16%119 of the worlds gas reserves. At the same time, Indias

relationship with the United States reached a milestone in July 2005 when the Bush administration declared

its ambition to achieve full civil nuclear energy cooperation with India.120 As explained in the introduction, it

is paramount for India to diversify its energy sources, especially gas, since gas reserves will support Indias

economic growth in the near future. For this reason, despite American pressure on India to abandon

economic ties with Iran, it is important for India to continue strong cooperation with Iran and eventually

succeed in implementing the IPI gas pipeline, which would help India significantly. The following chapter will

evaluate Indias compromises and successes in negotiating American dissent to the trans-Pakistan pipeline,

which is further tightened due to Irans nuclear enhancements. This evaluation will help in understanding the

extent to which India is effective in managing the rift between Iran and America, and how this management

should be pursued by India.

Indias increasingly strong ties with America have created a strain with Iran on various occasions; India has

still managed to retain a positive rapport with Iran. In fact, Harsh Pant121 articulates that With the signing of

the U.S.-India nuclear pact, Indias relationship with Iran has attracted an even closer scrutiny from

America122. On the other hand Pant123 informs that the trade between India and Iran is worth more than 3

billion dollars on an annual basis.124 The focal point here is that despite the case that the United States has


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made explicit warnings of setting up sanctions against countries that makes energy deals with Iran,125 India

has still managed to continue having strong hydrocarbon trade with Iran whilst pursuing with the nuclear

agreements with America. This, for a start, exposes the tactful diplomacy that India exerts in order to get the

best of both worlds. However, whilst Iran looks at India as its viable economic and strategic partner to

counter the growing American pressure126, Iran seems to have failed to make India a partner that counters

American pressure, because India has been influenced by American motives, which was evident because in

February 2006 when India referred Iran to the Security Council in relation to the Iranian nuclear program.

127 At the same time India is also keen to have Irans support in various matters, such as tapping into the

Central Asian and Caspian Sea energy resources.128 Such circumstance create various foreign policy

dilemmas for the Indian government, but despite the dilemmas the Indian government recognizes that the

1724 mile129(approximately 2775 kilometers) pipeline worth at least 7.4 billion dollars130 is vital if India

wants to secure energy and save up to 10 billion dollars over ten years131without even including the

amount India would earn because of productivity that is created because of the availability of energy with the

help of the gas pipeline instead of importing that same gas by ship. Furthermore, India also must ensure that

the trans-Pakistan pipeline must not be abandoned, even under intense American pressure, because on the

9th of March 2009, President Zardari announced Pakistans willingness to continue a gas deal with Iran

regardless of Indias involvement or not.132 Indias exclusion in this possible landmark deal would have

significant disadvantages to her energy security and geopolitical interests because if Pakistan starts having

more regional cooperation with other countries, especially Central Asian countries and the countries

surrounding the Caspian Sea basin, then the influence of Indias diplomacy could be weakened by Pakistani

tactics, which may be supported by China. The point being made here is that American pressure on India to

not participate in the trans-Pakistan pipeline could result with heavy setbacks for Indian diplomacy in

regional cooperation; hence the Iran-Pakistan-India pipeline must by no means be abandoned by India.

The Iranian isolation, which was perpetuated by the United States, has led countries like Russia and China

to support Iran both diplomatically and militarily like they did to India after the 1998 nuclear tests.133 This

scenario actually means that countries like Russia and Iran would be cooperating in determining where their

gas will be sold respectively. This means that Iran would not want to compete the Nabucco gas pipeline134

that goes from Russia to the west through countries like Turkey, Bulgaria, Romania, Hungary, and

Austria135, which is owned by Gazprom136. So if Iran builds a pipeline to fuel her economy, then the

Iranian pipeline would have to go eastwards in order not to clash with Russian interests, and for that reason

the Russian government does support the trans-Pakistan pipeline, since it also taps into the Asian

markets137via an ally, Iran. Due to this there is an increasing tension that continues to underlie between


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Russia and the United States. This means that the United States has an additional reason to dissent the

trans-Pakistan pipeline. On the contrary, according to Cohen138, the promotion of the Turkmenistan-

Afghanistan-Pakistan-India pipeline would suit American interests.139 The logical reasoning could be

because the United States would have a sizeable control over Afghanistan because of their occupation. This

would mean that a project such as the trans-Afghanistan pipeline would be in control of America, which also

competes the Iranian hydrocarbon market. Furthermore, if America keeps control of a pipeline that has

influence over the energy security, therefore the economy too, of South Asia, primarily major energy

consumer markets like India and to an extent Pakistan too, then the geopolitical significance of America

would further grow. An emerging power such as India would, in this respect, not find it appealing for another

power to have so much influence over her economy and geopolitics than it already has in other trade and

investment related sectors, which is already worth 27 billion dollars.140 On the other hand, Ariel Cohen141

referred to the Petroleum Minister of India, Murli Deora saying that both the trans-Afghanistan and trans-

Pakistan pipeline are important for Indias energy interests,142 This illustrates why India may be enthusiastic

about the two pipelines, specifically the trans-Afghanistan pipeline. Whilst Cohens argument is somewhat

credible, the statement made by Stephen Blank illustrates that the American tactic to undermine the Iran-

Pakistan-India gas pipeline by proposing the Turkmenistan-Afghanistan-Pakistan-India gas pipeline is

unlikely to succeed because India is understandably reluctant to allow Pakistan to have a hand on its gas or

oil supply.143 Blanks statement makes more sense than that of Cohen particularly when considering the

relations India has with Pakistan. This raises an important question for Cohen; to what extent can India

afford to be energy dependent on Pakistan? As such, should India consider the trans-Afghanistan pipeline

then, it would be necessary for India to have another pipeline that can offset Indias diplomatic strength

against that of America in the region, hence it would be ideal for India to also get the Iran-Pakistan-India

pipeline implemented against the trans-Afghanistan pipeline. As India has still not entirely committed to

either of the pipeline due to the various reasons of complications, it does seem obvious that India is playing

the right cards of a non-alignment type of a foreign policy.

From August 2006 to February 2007 there was a strong disagreement between Iran and India because of

the pricing at which the gas would be transferred144, and this disagreement worked to Indias advantage

when keeping in mind the relations between Iran and America. Iran was offering India $7.2 for every million

British thermal units, whereas India was negotiating for $4.2 mmBtu.145 Interestingly, during this time Iran

was being vehemently criticized by the United States and the United Nations Security Council146 regarding

their nuclear ambitions147, and so during this time, the Iranian government managed to hastily agree with

India in reducing the prices to secure alliance with India. A scenario such as this that comes with a statement


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made by former American President George W. Bush, our beef with Iran is not the pipeline, our beef with

Iran is the fact that they want to develop a nuclear weapon148 creates an impression on India such that the

Indian government is using America as a leverage to manoeuvre the economics of the trans-Pakistan

pipeline. Of course, on the other hand there is strong indication that it was Americas pressures that led India

to behave the way it did, and the IAEA meetings where India voted to refer Iran to the Security Council149 is

itself a clear indication of American pressures on India. The repercussion of this referral was that Iran

refused to ratify the previously agreed liquefied natural gas (LNG) gas deal with India150. Therefore,

based on the information above, what comes to light is that for petty matters such as price differences, the

Iran-America hostility can be used by India as a way to induce Iran to do what would suit India. The political

actions that India takes against Iran, however, seems to hurt India, because if Indias gas imports become

restricted, then it is bound to limit the economic growth of India. For this reason, it is in the Indian interest to

continue to postpone the pipeline so that India can get certain negotiation successes, as it seems that Iran is

rather desperate to get the eastern involvement in the Iranian economy. In the mean time, for India to submit

to American foreign policy in condemning and referring nations like Iran is against the energy security

interests of India.

Whilst delay is a necessity for the Indian government to play it safe with the trans-Pakistan pipeline, it is

equally important that India does not abandon or be perceived to forsake the pipeline. Signs of the Indian

government losing interest in the trans-Pakistan gas pipeline were becoming evident when the Indian

government replaced the former Petroleum Minister, Mani Shankar Aiyar, who was enthusiastic about the

gas pipeline, with Murli Deora who is perceived as belonging to the pro-U.S. lobby within Indias ruling

Congress party151. Murli Deoras strong ties with America were evident after the nuclear deal between

India and America passed after going through the Senate and the Congress on the 28th of November and

the 1st of October 2008 respectively.152 The Indian governments lack of cooperation with Iran and Pakistan

for the trans-Pakistan pipeline was obvious when there was no representation from the Indian

government153 during Murli Deoras term in office as Petroleum minister. Subsequently both Tehran and

Islamabad seemed frustrated, and even involved Beijing in the scene154. The Pakistani Foreign Minister,

Shah Mahmood Qureshi invited China to replace Indias position in the pipeline, or alternatively invest in the

pipeline, though there seems to be no official confirmation from the Chinese government.155 Although, as

discussed earlier, Iran may not see enough volumes in the Pakistani market alone, but it may still go ahead

if China supports the pipeline. Though on the other hand, according to Verma, China shows little interest in

this project because China feels that this project is full of challenges156. Though the point is that if China

refrains from being involved in the pipeline, then India should consider herself to be very lucky because the


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scenario for Indias geopolitical influence would have faced a setback, since Pakistan got an upper-hand in

regional and geopolitical cooperation, which India did not get. Pakistan, managed to gain Iran as a

diplomatic ally, and at the same time consolidated a diplomatic stance on the pipeline by inviting Chinese

neighbours, who also happen to be rivals of India at different levels of political and economic life. This has

also created a situation which may have reduced the impetus of Indian relations with Iran, which ultimately

has been caused by the American rivalry with Iran. With this said, it is important to note that upon

investigating this paper initially, the trans-Pakistan pipeline, also termed as the peace pipeline157 by some

academics since it is argued that it will create cooperation, integration, and interdependence between Iran,

Pakistan, and India.158 Academics such as Verma even argue that once the pipeline is implemented, India

and Pakistan would avoid conflict since Pakistan would be gaining $700 million in transit fees from India.159

However, upon deeper analysis, the trans-Pakistan pipeline is a formula for brutal geopolitical tactics to be

played at a diplomatic level. The reason for this is that Iran, Pakistan and India are not the only countries

involved in this geopolitical setting. Furthermore, the issue of nuclear proliferation has created a deep scar at

the fate of the IPI pipeline. Due to this, Indias foreign policy, which strives to gain energy security through

the collaboration of various states, seems to have gained to negotiate successes by taking advantage of the

vulnerable situation by being neutral. Though when it becomes evident that India sides America more than

Iran on matters that have a link to this pipeline, then the geopolitical setbacks become more palpable in the

pipeline and energy equation. So, Pants160 articulation, India must find its own balance in... shaping its

policy toward Iran161 is therefore well placed in context.

Contrary to the argument the last few paragraphs may have seemed to implied, India has not entirely played

to American pressures. In fact, Pant explains that India, during the time it voted Iran to the Security Council,

made sure that the draft of the resolution passed by the IAEA were diluted to a significant extent at Indias

insistence.162 Pant also explains that Iran, being a friend of India, has also played against the interests of

India since the Iranian government did not support Indias 1998 nuclear tests163 and asked India and

Pakistan to cap their nuclear capabilities by signing the NPT and the Comprehensive Test Ban Treaty

(CTBT).164 Furthermore, Iran also touched Indias nerve by not condemning terrorist attacks on the Indian

parliament in December 2001165, and further undermined Indian security interests by proliferating nuclear

technology with the help of one of Pakistans former nuclear scientist, AQ Khan166. Although this

information has is no direct link to the trans-Pakistan pipeline, it proves helpful to understand that it is not

American pressure alone that has led India to take certain decisions against Iran, but were concerns of

security interests for India. Jalil Roshandel167, in fact, emphasizes that the recent Mumbai attacks that were

perpetuated by Pakistan are a loss to Iran because it disrupted Irans politico-economic strategy168 of


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pursuing with the gas pipeline, which is practically impossible unless India and Pakistan come to peaceful

terms. It is perplexing to note that despite Roshandels accurate analysis of Irans loss, the Iranian

government still pursues a policy that does not favour Indias security. Furthermore it also helps one

understand that India and Iran have had a long-standing disagreement on the nuclear issue, and that Indias

actions are fair and balanced rather than biased in favour of American foreign policy. The point being made

here is that the perceived balance of the Indian foreign policy indicates an attitude by the Indian government

that treats every issue exclusive from the other. By this, it is meant that the Indian government does not link

the foreign policy of the trans-Pakistan gas pipeline to other issues such as the referral of Iran to the

Security Council not only because they are completely two different matters but also because it affected

Indias security interests. However, whilst this is worth appreciating, the Indian government must be shrewd

in noting that Iran and Pakistan consider and deliberate upon matters that are not directly linked to the trans-

Pakistan gas pipeline, and amalgamate all the issues to create an overarching foreign policy that dictates

and differentiates a friend, a rival, or both. Interestingly for India, Iran is not her friend, even though

academics such as Pant169 refer India as Irans friend because their cooperation is only limited to their

mutual interests and since their sphere of cooperation is rather limited, partly because of the American and

Iranian rivalry, India has to see Iran as both a rival and a friend.

It can therefore be safely stated that India is balancing her relationships based on her individual policy

requirements rather than the larger geopolitical requirement. This is clearly demonstrated by Talmiz Ahmed

when he quoted the Indian Foreign Secretary, "Shivshankar Menon who categorically stated: The nuclear

deal and the Iran-Pakistan-India gas pipeline projects are two separate issues and both are needed to

ensure Indias energy security." This creates situations where India gains friends and credibility at an

international level with countries like America, who are still insecure because they feel, as Roshandel

agrues, that "emerging strategic relations between Iran and India could lead to cooperation in the nuclear

sphere, or at a minimum provide the revenue that could be used to further Iran's alleged nuclear weapons

program and its support for terrorism."170 Paradoxically, Roshandels argument, as valid as it is, portrays

short-sightedness of the United States since Indias and Americas security interests merge at various

points. Nonetheless, it unfortunately is a loss for India on the coherence of a steady relationship with

countries like Iran and America, with whom India shares economic interdependence, but this very

interdependence creates a situation where India is compelled to reconsider her relationships in an unsteady

manner because of underlying security interests that clash, which for obvious reasons cause hindrances to

the implementation of the IPI pipeline. These challenges to the pipeline therefore demand more time until

the concerned parties find creative ways to solve their problems cumulatively.


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Part Four: India-Pakistan Relations

The India-Pakistan partition that was created in August 1947 created a strong rivalry between the two

neighbors171. Ganguly,172throughout his edition suggests that this rivalry will exist as long as there

remains a clash between the two countries for keeping a stronghold in the region of Kashmir173, which is

located in the North of India at the border with Pakistan. Although the Kashmir issue has a completely

different track record compared to that of the Iran-Pakistan-India gas pipeline, they both are connected

because the issue of Kashmir creates a relevance of peace between India and Pakistan, which ultimately

influences the implementation of the trans-Pakistan gas pipeline along with other issues such as prices,

transit costs, and the involvement of other geopolitical actors. The subsequent chapter will analyze how the

pre-existing relations of India and Pakistan creates obstacles to the trans-Pakistan pipeline and how other

factors, which are directly or indirectly related to the gas pipeline also downplay the implementation of the

pipeline. Ultimately though, I will be arguing that the best option for India is to wait until the Kashmir issue is

resolved before implementing the pipeline.

In order for the trans-Pakistan gas pipeline to be implemented by having India agree is rather difficult at this

position because before India risks continuing with this pipeline, it is paramount for there to be stability and

peace in the region, which in return are fundamental for the continued economic development and

prosperity of its people.174 A pipeline worth $7.4 billion175 can only happen if there is economic comfort in

India, and this economic comfort has a strong link with security matters. In relation to the trans-Pakistan

pipeline, security can be interpreted in various forms ranging from the security within India that encourages

investments in India, to issues like state-sponsored terrorism, militancy and insurgency in all relevant

countries, India, Pakistan, and Iran. Against the odds of the gas pipeline is, as Verma notes that The

strategic relationship between Pakistan and India remains undefined and unstable.176 However, Verma

also optimistically suggests that both India and Pakistan will cooperate with each other since there are five

major reasons for the two countries to rectify their relationships.177 Verma explains that the two countries

will not go to war for logical reasons such as the acknowledgment of people in India and Pakistan for

peace178, and that both countries are aware, perceivably from past experience, especially India, that a

coercive solution to the Jammu and Kashmir problem is detrimental to the interests of both countries. This is


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because it can lead to great chaos, as was noted by Timothy D. Hoyt who wrote in Sumit Gangulys179

edition that, when India and Pakistan were at a brink of a nuclear war after the 13 December 2001 attacks

on the Indian parliament180, the ruling BJP partys President, Jana Krishnamurthy stated that Pakistans

existence itself would be wiped off the world map.181 Hence Verma believes that the two countries realize

that they need to carefully manage their relations in a nuclearized environment.182 Finally, Verma also

insists that globalization will lead the two countries to have a strategy that will incentivize cooperation

between India and Pakistan183. It can be assumed, that the only possible cooperation the two countries can

have in a globalized environment at this point is a trans-national pipeline, which comes with a baggage of

complex interdependence that is being undermined by the need for state security. With these optimistic

assumptions, it seems that Verma has portrayed his unconvincing naivety by indirectly implying that the

trans-Pakistan gas pipeline will soon be implemented. However, I will argue that the relations with India and

Pakistan are not in a situation that can accommodate a pipeline that will make both countries dependent on

each other simply out of skepticism against each other, which is led by historic and current events that are

perpetuated by the clash of security and territorial interest.

According to the Indian Defense Report, there are more challenges than opportunities to world peace and

regional security.184 As far as the trans-Pakistan gas pipeline is concerned, regional security takes priority

before such a project be insisted upon. In fact, there has been a significant corrosion in the home affairs of

Pakistan185, which is evident from various events such as the assassination of Benazir Bhutto186, the

bombings at the Marriot Hotel187 and the resurgence of the Taliban along the Pakistan-Afghanistan

border.188 When relating this security threat to the IPI gas pipeline, it is worthy of noting that if Pakistan is

not able to provide enough security for a prominent leader such as Benazir Bhutto, or for that matter keep

overall law and order, then the question of Pakistan being able to keep a trans-national gas pipeline safe

seems out of the question. Although the Indian government insists that Pakistan and Iran respectively

provide national treatment of pipeline189 , which means that any given country must provide security to an

international pipeline just as though it is a national pipeline190, the likelihood of Pakistan to be able to

support the security of such a pipeline seems unlikely since it seems definite that at this point Pakistan is

unable to maintain internal security and more importantly the Pakistani state may induce disruptions to the

pipeline. In fact, according to Hussain Haqqani in Gangulys edition191, there have been instances in history

where Pakistan had promised peaceful cooperation with India192, an example being when Nawaz Sharif,

the former Prime Minister of Pakistan met the former Indian Prime Minister Atal Bihari Vajpayee for

confidence building measures in Lahore in 1999, when Pakistan and India seemed to be going on a pathway

of peace, Sharifs government captured a strategic point over the Srinagar-Leh highway in India, and


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pursued with combat with the Indian army, which shattered the confidence building measures.193 The

tendency of Pakistan not being reliable on key security matters would convince one that a trans-Pakistan

gas pipeline makes the pipeline a far away dream, which is rather unlike what Verma naively implies. In fact,

it would be unfair to just assume that Pakistans inability to protect the trans-Pakistan pipeline is the main

reason for Indias hesitation to initiate the pipeline, but it is also that India is rather skeptical of Pakistani

intentions. As mentioned earlier, the Chinese government may possibly fund the pipeline from Iran to

Pakistan. The interesting aspect of this situation is that the Chinese government has given no official

confirmation of this in the media, but it is President Zardari, who in February 2009 announced Chinas

invitation for a financial role194. This from the Indian government could be perceived in various forms. One

interpretation of this announcement could be that China is perpetuating a situation whereby they can get

involved in the trans-Pakistan pipeline and restrict Indias possible gain of a geopolitical advantage. Whilst

on the other hand it is also possible that Pakistan has prompted a diplomatic situation where India may be

tempted to take rash decisions regarding the pipeline despite American pressures, hence forcing India into a

situation where India disappoints the American government and also loses a geopolitical grip against China.

Such diplomatic moves by Pakistan may compel India to be skeptical of Pakistans intentions in cooperating

with India. So the crux of the matter is that it is highly unlikely that the pipeline moves much forward before

there is some peaceful understanding between India and Pakistan.

Furthermore it is also vital to note that issues like terrorism are strongly linked to the relationship of India and

Pakistan. Throughout history there have been major terrorist attacks on India195, allegedly, but with strong

evidence, perpetuated by Pakistan.196 The most recent example being the Mumbai terror attacks on the Taj

Hotel and other key symbolic locations197. To state that such terrorist attacks do not help the India -

Pakistan relations and that this only becomes a setback to the trans-Pakistan pipeline would be euphemistic.

It is notable that terrorism is related to the ongoing Kashmir crisis198, and so before India and Pakistan work

on resolving the chances of starting the trans-Pakistan gas pipeline, it should be a priority for both countries

to agree a defined border for the current state of Jammu and Kashmir. As such, the Iran-Pakistan-India

pipeline does not pass through the troubled region of Kashmir, for which reasons one may argue that as

long as terrorism is only contained to Kashmir, then the trans-Pakistan pipeline should be pursued with,

though the flaw with this thought is that it is too narrow and does not consider that a tension in one region

affects an entire geopolitical arena. In fact, G. Parthasarathy199 articulates that there have been continuing

efforts of the Pakistan establishment and militant groups linked to the military establishment to promote and

participate in terrorist activities in Jammu and Kashmir and elsewhere in India."200 For this reason, it is only

logical for India to delay the trans-Pakistan gas pipeline, not only because of the above mentioned Iran-


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209 from the transit fees alone. For India to actually pay that amount in just transit fees could mean a

possible risk by actually financing a hostile country such that it can afford to increase a defense budget that

could undermine Indias efforts to curb terrorism. On the other hand, it could also be argued that such a

massive financial collaboration would create interdependence, which would compel Pakistan not to take any

coercive action against India. As such Shamila Chaudhary210 acknowledges that "India and Pakistan have

never been successful in negotiating Kashmir."211 Then, she argues that the trans-Pakistan pipeline will

compel the true countries to reconsider the whole Kashmir crisis. 212Nonetheless, based on the previous

terrorist acts that Pakistan has sponsored, it seems unconvincing to believe that such type of

interdependence will have Pakistan to stop sponsoring or supporting terrorism for the gain of Kashmir. It is

therefore wise, and logical for India to continue to delay the implementation of the pipeline, until there is

some sort of understanding and stability between India and Pakistan. At this point though, it is vital for India,

to negotiate a lower transit fee with Pakistan for this pipeline. Furthermore, India should also remind America

its responsibility to maintain stability in South Asia by not aiding Pakistan since that will help reduce terrorism

globally, and this would further help India get into a position by which it can take a decision that may help

implement the trans-Pakistan gas pipeline project with fewer risks. This however is bound to take time, so

delaying this project is inevitable and more importantly necessary.

Although there are political risks that come along with the gas pipeline for India, there are also some crucial

scenario types that must not be neglected. S. Pandian213 articulates that the pipeline project from Iran to

India would make more sense in financial terms, as its primary justification would be sales to India, with

Pakistan as only a secondary customer.214 The mere fact that Pakistan is a secondary customer to Iran is

an advantage to India because that would mean that the relations between Iran and Pakistan would be

dependent on India to an extent for the gas pipeline because Pakistans market for energy may not be large

enough for Iran to be interested solemnly on Pakistan, and so India has to be a part of the equation if there

is to be any gas pipeline deal between Iran and Pakistan unless the pipeline continues into China instead of

India. Amusingly, this situation links

in with the situation in Kashmir. Pant215 and Pandian216 both echo that Iran has previously supported

Pakistan with its claims on Kashmir instead of India. If the gas pipeline were to be implemented, then the

interdependence of India and Iran on such huge volumes of gas supply transactions would mean that India

can get an opportunity to have more bargaining power on the Kashmir issue with the help of Iran. The

dilemma however is that India and Pakistan would find it difficult to continue with the gas pipeline unless the

Kashmir problem is resolved, and Irans stance on Kashmir could be best negotiated if India continues with

the trans-Pakistan gas pipeline. Furthermore, it is vital to acknowledge that India has also sided America on


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Irans nuclear issue at various instances, but at the same time has also tried to dilute the Iranian nuclear

topic as far as she could217 so that the trans-Pakistan gas pipeline could have less interference from

America. It is important to acknowledge this because it helps understand the balance that India has to work

with. Whilst India does not want to disappoint Iran and America, India also wants the geopolitical advantage

of being a closer ally of Iran than Pakistan. Pandian218 expresses that Pakistan is strongly concerned with

Iran-India relations and has previously done its best to restrict a pipeline from Iran to India219. In fact,

Benazir Bhuttos government was even reluctant to have a feasibility study done when a proposed gas

pipeline from Iran to India was being considered to pass through Pakistans Exclusive Economic Zone

(EEZ), which was about 200 kilometers into the Pakistani shores.220 For India this wo

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