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Gas pipeline ‘not to hit’ ties with USA
Ashish Kumar Sen writes from Washington

New Delhi’s determination to go ahead on a gas pipeline project with Iran despite opposition from the USA is not likely to damage its relationship with Washington, say US-based analysts.
“It will not strain US-Indian ties,” said Ashley J. Tellis, a senior associate at the Carnegie Endowment for International Peace who served as a senior adviser to Robert Blackwill when he was the U.S. Ambassador to India. “This relationship is far more encompassing and strategic for it to be disrupted by a disagreement over Iran.”

Negotiations on the gas pipeline began in 1994, but no headway was made until last year because of tensions between India and Pakistan, and the project’s prohibitive cost. The 2,600 km gas pipeline project, with an estimated cost of about $ 4.5 billion, has been strongly opposed by the USA because of concerns about Teheran’s secretive nuclear programme and its sponsorship of terrorism.

India’s Petroleum Minister Mani Shankar Aiyar, a strong advocate of the pipeline, recently said: “We are sensitive to U.S. concerns and trust they are aware of our requirements. It is impossible for India to secure its energy requirements without access to natural gas resources in the extended neighborhood, especially Iran... I hope that even as we work with the U.S. and Iran in the International Atomic Energy Agency (IAEA) to meet international concerns, the U.S. will work with us in securing our vital energy requirements.”

To sustain its current 7 per cent growth rate, India imports more than 70 per cent of the crude oil it consumes. It is expected to import some five million tons of gas this year alone, with at least 20 per cent coming from Iran.

India is on “fairly solid ground” when it talks about its energy needs, says Anupam Srivastava, director of the Asia programme at the Center for International Trade and Security at the University of Georgia in Athens.

Some U.S. officials have indicated that the pipeline would put a crimp in U.S.-India relations. On a recent visit to New Delhi, U.S. assistant secretary of state for arms control Stephen Rademaker revealed the extent of this concern. “We think it [the Iran pipeline] would be a mistake. It would provide oil revenue to Iran that could be the basis of funding for weapons of mass destruction,” Mr. Rademaker said.

During a recent meeting in Washington with Pakistani Foreign Minister Khurshid Kasuri, Secretary of State Condoleezza Rice reportedly told the minister that the Iran pipeline would violate the Iran-Libya Sanctions Act (ILSA). The act empowers the president of the USA to order punitive measures against any international company that invests more than $ 20 million a year in Iran’s energy sector. A violation of this act would mean sanctions on Pakistan, Miss Rice warned.

Dr. Srivastava pointed out that the ILSA couldn’t, by law, stop other countries’ economic engagement with Iran. “This is just a U.S. extra-territorial law, not an international law. So when the U.S. sanctioned eight Chinese companies on December 27, 2004 for providing nuclear assistance to Iran in violation of the same act the Chinese said they broke no law - so all the U.S. could do is to stop business with the Chinese firms.”

The Bush administration’s opposition to the pipeline stems from its suspicions that Iran is developing a nuclear weapons programme and concern that revenue earned from the pipeline will be used to fund terrorists. Analysts say this opposition could be dropped if Iran agrees to provide International Atomic Energy Agency weapons inspectors access to its nuclear plants.

Posted by Nikhil Khanna @ 1:25 PM


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This blog focuses on current issues concerning defense and national security for the world's largest democracy - India. It is updated regularly providing readers with in-depth information on technology transfer, acquisitions, counter-terrorism, security and military collaboration and strategic dialogue between India and the United States. The site includes links to top defense policy & research institutes, think-tanks, military sites and research organizations.
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