India's loosing out on diversified energy sources to fuel growth...

Iran recently signed an agreement with Pakistan under which the latter would get an annual eight billion cubic metres of natural gas. Originally meant to partner the $7.2 billion gas pipeline project, India stayed out though Iran would like it to come aboard. On paper, an Iran-Pakistan-India (IPI) pipeline seems a win-win deal for all concerned.

With the world's second-largest gas reserves after Russia, Iran wants to sell. India is a massive, expanding market, ever on the lookout for diversified energy sources to fuel growth. Pakistan also needs to meet increasing domestic demand. IPI would run over 2,775 kilometres from Iran's South Pars gas field through Pakistan and on to India. Such an overland linkage has economic and functional logic. A deep-sea pipeline would cost four times more while liquefied natural gas (LNG) trade involves long-distance sea transport. On delivery at port terminals, LNG needs to be regassified for piped distribution. Though a viable alternative for India, which imports LNG from countries like Qatar, it is logistically circuitous.

On the diplomatic front, it's been argued that shared stakeholding in a "peace pipeline" would improve India-Pakistan ties. Finally, as a pressure tactic, Iran has hinted that Beijing might enter if New Delhi exits. A project of this transnational scale would, however, have long-term implications in a world of rapidly mutating geopolitical contours. There are nettlesome issues of pricing as well, with Iran on gas price and with Pakistan on transit costs. Even if these were resolved, times have changed since 1993 when this initiative for South-South cooperation was visualised. Indo-Pak ties have been strained by the repeated torpedoing of a peace process by Pakistan's disingenuous postures on terrorism emanating from its soil. From Kargil to 26/11, it has been a story of eroding trust. Pakistan's internal situation must improve drastically for IPI to be risk-free. There are security concerns about the 475-mile stretch of pipeline that would traverse Baluchistan. This strife-prone region's separatist tribes have blown up pipelines in the past. And, with Islamabad's writ not running in vast swathes of the country, its ability to protect vital installations even nuclear facilities has been in question. The Taliban and other extremists run free and a multibillion-dollar gas pipeline would be a sitting duck in their destructive path. So, persuasive as the pro-IPI arguments are, India would do well to look before it leaps.