On separate occasions in recent days, the Iranian President has expressed optimism about the future of the proposed $7.5 billion, 2700-km, Iran-Pakistan-India gas pipeline project. The explanation for such optimism could be that keen to pick up an old thread India and Iran are trying to restore their 2003 equation when the then Iranian president was the chief guest at the Republic Day parade in New Delhi. Over the next five years, India- Iran relations have had some setbacks.
India and Iran may have shared near identical views on Taliban and the rise of terrorism in Afghanistan but Iran prefers to see India through the Pakistani prism. The rise of the Pakistani creation of the Sunni-dominated Taliban in Afghanistan may have savored Iran-Pakistan relations a bit but in the end the bond between the two prevailed. Again, Iran generally fails to take notice of the large Shia population in India, After the Islamic revolution close to 30 years ago Iran’s circle of friends has considerably narrowed.
Before the gas pipeline project was conceived, India and Iran were negotiating a $22 billion deal for supply of LNG to India over a period of 25 years. Just when everything was worked out Iran said that it wanted price negotiations to be reopened. The LNG deal is now virtually frozen, perhaps on way to burial, unless India accepts fresh Iranian conditions. This experience should deter India into believing that it will be smooth sailing once the gas pipeline project has been given finishing touches, culminating with a meeting of leaders of India, Pakistan and Iran in Tehran.
The political philosophy of the hard line Iranian president will also raise the fear that should he be upset with India over, say, another vote against Iran at the UN or the IAEA he could go to the extreme of stopping gas supplies to India. An angry India could deal with Pakistan by warning it of some retaliation. Though highly unlikely it could be a threat to withhold the flow of river waters. Such a move can devastate Pakistan which cannot survive without water from India. But India has no such leverage against Iran.
Undoubtedly, India's relations with Iran suffered after New Delhi voted against Iran twice at the IAEA. There was a point when it was suggested that the third party in the pipeline project should be China, a country awash with cash and many times hungrier for energy than India. If China responds positively to the move Pakistan is bound to pressurize India more into accepting its demand for exorbitant transit fees. Pakistan’s main interest in getting India on board is that it can make a killing with the huge transit charges. The displacement of India and the entry of China would act as a red rag for the Hindutva forces while the Left would see another sign of India losing out because it has pawned its foreign policy to the US. While the benefits that India, will derive from supply of Irani pipeline project and has to seek foolproof guaranteed supplies before it irrevocably commits itself to it.