India’s Pipeline Diplomacy: Case of Lost Opportunities

ISSSP Reflections No. 4, October 14, 2013

Author: Mr. Sanket Sudhir Kulkarni

Pipeline India’s pipeline diplomacy over the past year has been a mixed bag. All the existing cross-border pipeline projects, viz Iran-Pakistan-India (IPI) Gas Pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline and Myanmar-Bangladesh-India (MBI) Gas Pipeline have made some headway. India’s participation in these projects will contribute towards improving its energy scenario. The Government of India has already identified the importance of natural gas as a major contributor in India’s future energy mix.

Currently, the Liquefied Natural Gas (LNG) route is being used to procure natural gas from abroad. But, in comparison to the LNG route, pipelines are considered a more viable method of transporting natural gas. This is because the LNG route needs an elaborate infrastructure, at the supplier’s and receiver’s ends, thereby increasing the costs of energy transportation. Despite the obvious advantages of pipeline projects, the existing proposals face challenges owing to the unique geopolitical and security considerations prevalent in South Asia. 

Out of the three proposed pipeline projects, IPI and TAPI would be transiting through the volatile Af-Pak region. Since the early 1980s, this region has been in a constant state of flux thereby raising concern among Indian decision makers. The other project, i.e. the MBI Pipeline Project (Myanmar-Bangladesh-India) was envisaged with a view to bring natural gas from Myanmar via Bangladesh to India.

According to media reports, the Chinese have recently started drawing natural gas from a pipeline emanating from Myanmar. Few years back, a trilateral pipeline between Myanmar, Bangladesh and India was conceived which would have brought natural gas at India’s doorstep, however the deal did not materialise. This may be attributed to prolonged Indo-Bangladesh negotiations without meeting any success. New Delhi’s refusal to accommodate Dhaka’s demands, like allowing Bangladesh to access electricity and trade commodities originating from Bhutan and Nepal to pass through India and implement corrective measures by India to reduce trade imbalances have also believed to have impacted the success of the project.

A cash-starved Myanmar thus chose to sell the available natural gas to China. Among the three cross-border pipelines, the MBI pipeline was least prone to security risks. A comparative analysis of the existing pipeline project proposals in South Asia goes to show that the MBI project would have been a better bet for India and would have ensured a more secure way of meeting India’s burgeoning energy demands in an economically viable manner, with minimal external pressure and security concerns.

Recently, the IPI gas pipeline project meant to bring natural gas from Iran, via Pakistan to India also achieved an important milestone with the resumption of construction on the Pakistani side despite the United States’ opposition regarding Islamabad’s participation in the project. India’s decision making towards participation in the IPI project seems to have come under American pressure, thereby resulting in a gradual shift away from Tehran.   

Another concern which probably discouraged India’s policy makers from joining the IPI project was a lack of assurance from Iran and Pakistan about pipeline security and non-disruption of energy supplies during crises. The recent impasse in Indo-Pak relations due to ceasefire violations by the Pakistan Army is a case in point wherein the proposed peace talks got hampered due to untoward border incidents. The prevailing conflict in Balochistan further complicates the situation. 

Instead, the Indian Government joined the TAPI project in the year 2012 and recently signed the Gas Sales and Purchase agreement along with other participating countries which would bring gas from Turkmenistan transiting through Afghanistan, Pakistan and then into India. Like the IPI pipeline, the TAPI pipeline project too suffers from the prospect of instability in the Af-Pak region.

The situation in Afghanistan can greatly deteriorate following the withdrawal of international forces post-2014, thereby making the materialisation of this ambitious project uncertain. Scholars like Uma Purushothaman have questioned the rationality behind India’s decision to join the TAPI project and ignoring the IPI project, when security threats to the TAPI project is much greater in comparison to the IPI project.

One hopes these facts would compel the Indian establishment to introspect on its policy towards cross-border energy projects. On the issue of cross-border pipeline projects, there seems to be a divide among various sections in the government and policy circles. From the perspective of energy security, these projects make perfect sense, but from the geopolitical and security viewpoint, it could result in making India increasingly dependent on supplier and transit countries for its energy security.  

India’s policy formulations towards existing pipeline projects must come under greater scrutiny and compel decision makers to formulate policies in order to create a healthy balance between energy needs and national security priorities. Harmonisation of our security and geopolitical concerns on the one hand and energy needs on the other hand becomes necessary to make up for the lost opportunities in the past. In an era where China is giving stiff competition to India in the race for energy resources, New Delhi’s policies must be geared up to remove impending hurdles and grab available opportunities.


About the Author

Sanket Sudhir Kulkarni is Ph.D Research Scholar, National Institute of Advanced Studies, Bangalore. He can be reached at sank.kulkarni[at]gmail.com

Picture Courtesy: India Today


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