Why Iran is Crucial for Both India and Pakistan

by Tridivesh Singh Maini and Usman Shahid

The following article has been sent to us by Usman Shahid, a Pakistani national, from Lahore. He and Tridivesh Singh Maini (who is an Indian) have recently co-authored a book on Indo-Pak people-to-people contact to be published soon.

The Iran-Pakistan gas pipeline turned out to be the swan song of the Zardari Government as the President formally inaugurated the so- called peace pipeline project worth $ 7.5 billion with his Iranian counterpart on March 11, just five days before the dissolution of the National Assembly. Pakistan needs $ 1.5 billion to build the 785-kilometre track within its territory for which Iran has offered a $ 500 million loan. An Iranian-Pakistani consortium will complete the project and Pakistan is expected to start receiving gas after the pipeline is completed in December 2014.

“The completion of the pipeline is in the interests of peace, security and progress of the two countries... it will also consolidate the economic, political and security ties of the two nations,” Zardari and Ahmadinejad said in a joint statement.

Once the project is completed, it would ensure supply of 750 million cubic feet of natural gas per day and help bridge the energy gap of around 4000 MW, pivotal to run the industrial and commercial wheel in energy-deficient Pakistan. There is a debate on gas pipeline going on in Pakistan. Some dub it a bold move since in spite of US threats of sanctions, Pakistan finally sealed the deal. During the SCO summit in 2012, President Zardari discussed the IPI project with the Iranian President, and both agreed to urgently resolve issues of credit for the pipeline. According to the government supporters, even then, Pakistan decided to keep working on the IPI despite US pressure, whereas some took it with an iron hand calling it a political stunt to lure anti-US voters in the coming elections. Keeping the PPP’s five years in view, the latter makes sense. Yet, the next government will have to bear the brunt in case sanctions are imposed. For that matter, China has been involved and the decision to handing over the Gwadar Port seems to be part of a pre-emptive policy of the government to avoid US pressure. Pakistan desperately needs the gas, which is also not available on such favourable terms elsewhere. Having called it a ‘Peace Pipeline’, the Zardari Government sought improving relations with Iran at a time when America and the NATO are disentangling themselves from the region.

The original plan for the pipeline had an Indian leg. India is the second largest importer of Iranian oil after China. Despite US pressure, India continued improving trade and oil imports from the Islamic Republic. However, India used the IPI as a bargaining chip with the US for the nuclear pact, and ostensibly backed out in the guise of high prices. It also announced to cut imports of Iranian oil by 11 per cent in the FY 2012. Nevertheless, Iran is still hopeful that energy-hungry India won’t resist once the pipeline reaches Lahore and Multan, less than a hundred miles away from the Indian border. Due to US pressure, Japan, South Korea and China have reduced Iranian oil imports. Contrarily, New Delhi firmly rejected the sanctions hoping that Washington would give India a waiver, similar to the one granted to Japan in 2012, acknowledging its efforts to reduce imports.

India views Iran as a significant strategic ally. The Islamic Republic offers India access to Afghanistan bypassing the untrustworthy neighbour, Pakistan. In case India does not agree, both Pakistan and Iran are prepared to replace it with China.

Pakistan is facing two major challenges in this regard, that is, US pressure and terrorist threats to the pipeline. On the other hand, both Iran and India are focusing on Central Asia. India financed a $ 250-million road between Zaranj, at the Iranian border, and Delaram—a ring road connecting Kabul, Kandahar, Herat and Mazar-i-Sharif. India sees a potential market in Iran. Therefore, it is actively involved in the construction of a deep water port in Chabahar—alternating the Gwadar port built in southern Balochistan freeing it from Pakistani inter-ference to access markets in Afghanistan and Central Asia.

Only recently, President Pranab Mukherjee spoke about the importance of the New Delhi-Tehran ties, in the context of both geo-politics and economics, while welcoming a parliamentary delegation from Iran, led by its Speaker Dr Ali Larijani. The President spoke about civilisational linkages, saying: “Throughout history, both countries have seen an intermingling of people and cultures.” He also spoke about the economic potential of both countries, stating: ”India and Iran have a strong bilateral economic relation-ship and it needs to be further deepened for the benefit of peoples of both countries.”

Iran is the central hub for a possible silk route. Therefore, the US is determined to contain Iran and coming up with a new plan, that is, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

Having understood the energy crisis in India and Pakistan, the US signed a nuclear pact with India, and offered support to the latter to add 900 megawatts to the power grid by the end of 2013, fuelling an additional two million households, as well as work together on TAPI. US considers TAPI most significant to stabilise Afghanistan in the post-NATO withdrawal from Afghanistan. The project is a part of a US-sponsored New Silk Road concept.

The gas import from Iran has a strategic importance for the region. It remains to be seen whether India changes its mind and rejoins Pakistan and Iran for the originally scheduled IPI gas pipeline. This would further widen the economic horizons for both India and Pakistan and help them resolve conflicts. Both may add China (and later on Russia) to further the horizon and lessen international pressure.

All stakeholders mentioned above are working on a post-2014 scenario after the US leaves Afghanistan. In this case, it is mandatory for all of them to cooperate with each other for a better South Asian region. The new route will ensure connection between Europe and Asia; thus more markets and trade opportunities will be explored and accessed.

Indo-Pak peaceful ties and collaboration regarding trade route(s) are crucial. In case one tries to surpass other, both are feared to meet a tragic end.

With mutual interests and consent, the new Silk Road offers great opportunities, economic progress and prosperity, for South Asia, especially India and Pakistan. The two geos-trategic regions need integration to cope with the challenges raised in the new globalised world. Hence, South Asia could profit greatly from this new strategy, and India and Pakistan, being major players, should be working together to realise prosperity.

Tridivesh Singh Maini is a New Delhi-based columnist and independent foreign policy analyst.

Usman Shahid is a freelance journalist and a researcher based in Lahore. He is teaching journalism at the University of South Asia.