Simultaneous with the economic opening of India, the issue of energy security has be-come a priority since the 1990s. By now, India has bebe-come one of the largest oil-con-suming states in the world. As a result of the small share of domestic oil production,
this demand is met mainly by imports. In 2017, Indian oil consumption reached 4.4 million barrels per day, and this is expected to rise to 6 million barrels per day by 2024 (International Energy Agency, 2020). Between April and November 2019, India satisfied nearly 85 percent of its crude oil demand from imports, which constitutes very significant dependency and vulnerability (Ministry of Petroleum and Gas, 2019).
More than two-thirds of crude oil imports originate in the Middle East, with Iraq, Saudi Arabia, and the United Arab Emirates being the key players.
India has significant gas production capacity, but 43% of its annual consumption has to be imported. The foremost source of imports by far is Qatar, from where gas is shipped in the form of liquefied natural gas (LNG). Gas is imported from 13 other countries as well, with the leading importers, aside from Qatar, being Nigeria, Equa-torial Guinea, and Australia.
India is not the only country that needs hydrocarbon imports: Pakistan does as well.
The design and construction of two gas pipelines are on the agenda, which may also have a fundamentally significant effect on the political situation in the South Asian region. There are also two states close to India and Pakistan that have the most sub-stantial gas reserves in the world. Turkmenistan has the sixth largest gas reserve in the world, but Iran has even larger reserves, making it the second largest source behind Russia. Iran not only has substantial reserves, but the pipeline path is significantly shorter from there than from Turkmenistan, which could affect construction costs and, last but not least, transit fees.
Plans for the Iran-Pakistan-India (IPI) gas pipeline date back to the mid-1990s. Iran and Pakistan signed the first agreement for its future implementation in 1995. How-ever, no meaningful progress has been made for a long time, since there have been unprecedented tensions in Iran-USA relations, especially since 2002, the time of the nuclear crisis. A system of multilateral sanctions against Iran was also established in the early 2010s, especially during the presidency of Mahmoud Ahmadinejad, during which period the Middle Eastern state refused to negotiate. The situation was com-plicated even further by the signing of the so-called nuclear agreement by the Unites States and India in 2006, through which the relationship of the two states transformed into a close alliance. In the second half of the 2000s, especially during the Bush ad-ministration, Washington put significant pressure on New Delhi not to participate in the implementation of the IPI pipeline. India announced in 2009 that it did not intend to participate in the construction of the pipeline.
The concepts of a “peace pipeline” and pipeline diplomacy have appeared in the ac-ademic literature, suggesting that energy demand creates a kind of interdependence between India and Pakistan and hinting that steps will be taken towards the peaceful resolution of the conflict. However, the IPI was the very reason for disputes – about the de-termination of the transit fee – and generated further tension between India and Pakistan.
In 2013, Iran and Pakistan agreed to start implementing the project, even without India. The United States put significant political pressure on Pakistan as well, but bilateral relations became quite chilly during this period, especially following the 2011 US action against Osama bin Laden, which Islamabad understood as a violation of the country’s sovereignty. The Iranian section is essentially finished, but construc-tion of the Pakistani secconstruc-tion is still in progress. It is likely that pressure from the US plays a significant role in the fact that the pipeline is still not operational to this day.
The nuclear agreement signed in 2016 by the P5 + 1 meant hope for the construction of the gas pipeline and led to visions of the integration of Iran in the region and the strengthening of economic relations. The historically positive cooperation between India and Iran was a cause for confidence. Iran is also a crucial state in relation to the oil imports of India. In 2018, however, President Trump announced the reintroduction of US sanctions and declared that the Unites States would withdraw from the nuclear agreement. Simultaneous with these measures, the United States introduced so-called secondary sanctions that also affect India and Pakistan, and ultimately the political feasibility of the IPI gas pipeline. In the current anti-Iran climate, there is little chance of it being realised. India is working primarily with Qatar to buy LNG. Perhaps it is not irrelevant to note that Qatar has become quite isolated in the Middle East since the 2018 crisis, considering that the Saudi accusations against Doha did indeed involve relations with Iran. However, both the US-Saudi-Israeli bloc and Iran are especially important in relation to the global aspirations of India.
In contrast to the troubled fate of the IPI, investment into the Turkmenistan-Afghani-stan-Pakistan-India (TAPI) gas pipeline has been sustained. A four-party agreement on the construction of the gas pipeline was signed in Turkmenistan in 2015, but the idea of implementation emerged as early as in the 1990s. Events in Afghanistan – in particular, the US intervention in 2001, and the deteriorating security environment that followed – prevented further progress. The TAPI is 1,814 km long, with an investment cost in the range of 10 billion USD, and the pipeline is due to pass through Herat, Kandahar, reach-ing Quetta and Multan in Pakistan, endreach-ing in Punjab, India (Reyaz, 2018).
India has faced various dilemmas regarding the construction of the TAPI pipeline, which can be summarised as the following:
• The TAPI makes India very vulnerable to Pakistan. While Pakistan is more vulnerable to water issues (in connection with dam construction around the Indus River), the gas pipeline could easily balance out this situation, which is not in India’s interest.
• According to Indian opinions, the TAPI is actually in China’s interest as long as the Pakistani section can be connected to the China-Pakistan Economic Cor-ridor (CPEC), which is ultimately part of the Belt and Road Initiative (BRI) project. India also fears that if the pipeline is built to the port of Gwadar in
Pakistan, then Pakistan could gain a strategic bridgehead in relation to the gas supply of Europe, and ultimately the Chinese position would improve.
• The advantage of TAPI for India is that the pipeline would significantly facil-itate the diversification of gas supply and reduce dependence on the insecure Persian Gulf in particular.
• Another dilemma for India is the issue of determining a transit fee with Paki-stan. The agreement signed in 2013 is not acceptable to India, and India is call-ing for its revision with reference to developments in world markets. However, it is concerning that Pakistan could potentially even use the issue of the transit charges as a political weapon. India and Pakistan would each receive 42 percent of the gas supplied by the TAPI pipeline.
Conclusion
It is shown above that India has been pursuing a very active Eurasian policy, espe-cially since the inauguration of the Modi government (2014), the main goal of which – arising from India’s aspiration of become a global power – is to connect the South Asian state with the Middle East, Central Asia, Europe, and Southeast and East Asia politically, economically, and in the field of the military. In this process, Chinese as-pirations (above all, the BRI, announced in 2013) create opportunities but also pose challenges and are sources of danger. Especially since the Hindu nationalist turn, India has made independent investments into infrastructure (e.g. INSTC) which, on the one hand, counterbalance Chinese aspirations and, on the other, promote the eco-nomic and political opening of India.
In the Eurasian system of relations, India can rely on three powers to facilitate its economic and political goals: Russia, Japan, and the United States. Of the three systems of relations, Eurasian relations are supported most by Indian-Russian relations, but the dependence on arms imports that arose in the 1990s did not serve Indian interests, thus the latter country began to diversify its sources of supply. India continues to approach its system of relations through a policy of positive neutrality, and has been taking ac-tion more and more consciously in various direcac-tions during the Modi Administraac-tion.
While the first Modi government (2014–2019) turned more towards the immediate neighbourhood, during the second term the idea of the extended neighbourhood came to the fore. Central Asia (Connect Central Asia) and South East Asia can be considered crucial elements of this. For example, India is consciously deepening its relations with Vietnam, which already takes an anti-China stance, while under the Japanese Prime Minister, Shinzo Abe, the India-Japan relationship has also reached a new level.
However, India’s aspirations are severely limited by its economic opportunities, despite its 6-8 percent economic growth. The size of the Indian “Project Mausam”
and of INSTC are dwarfed by the efforts of the Chinese Silk Road. It is true that aca-demic debate about the debt trap highlights the limitations of Chinese opportunities.
The plans of India, assuming that it acts not only in the South Asian region but in the extended neighbourhood, are considered less suspicious than the growing Chinese in-fluence. As a democracy, India also has significant soft power in the Eurasian region.
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