[R-G] India Raises a Toast to Iran

[Yoshie Furuhashi]

<http://www.atimes.com/atimes/South_Asia/JE02Df02.html>
May 2, 2008
India raises a toast to Iran
By Siddharth Srivastava

NEW DELHI - The one-day visit this week of President Mahmud
Ahmadinejad, the first Iranian head of state to visit India in five
years, was short in time, but it was high in symbolic content and laid
bare some of New Delhi's strategic thinking.

While energy issues remained the main focus of the visit, the
attention was as much on perceptions of Washington, which has a major
problem with Iran's independent nuclear program and has been urging
nations, including India, not to deal with Tehran.

However, Ahmadinejad's visit is perhaps the first time that the
Congress-party led New Delhi government headed by Prime Minister
Manmohan Singh has stood up to the United States on Iran, making an
effort to emphasize an independent foreign policy not influenced by
Washington's ideas.

In the past couple of years, India, as the new US strategic partner in
Asia to dilute the growing influence of China, has been sensitive to
US urgings, taking a stand against Iran at international forums.

Awash with its new stature as "America's friend", New Delhi has also
been accused of deliberately delaying the US$7.6 billion,
2,600-kilometer Iran-Pakistan-India (IPI) gas pipeline to keep
Washington happy.

Coincidentally, India's changed views emerge even as the India-US
civilian nuclear deal is almost dead due to domestic Indian political
opposition. Washington, instead, has been keen to push defense
purchases from India in the recent past.

In this period, voices have emerged from New Delhi indicating a
changed thinking about Iran.

Last week, New Delhi reacted sharply when US State Department
spokesman Tom Casey called on India to utilize Ahmadinejad's visit to
persuade Iran to stop its uranium-enrichment activities.

In a terse statement, the Foreign Ministry said, "India and Iran are
ancient civilizations whose relations span centuries. Both nations are
perfectly capable of managing all aspects of their relationship with
the appropriate degree of care and attention."

Iran recently declared it has considerably widened its plans to enrich
uranium, a program that has earned it three rounds of United Nations
sanctions and independent ones from the United States, which fears
Tehran has a nuclear weapons program.

This week, Indian Foreign Secretary Shivshankar Menon said isolating
Iran is not the right approach. "From our point of view, the more
engagement there is, the more Iran becomes a factor of stability in
the region." He said the IPI pipeline was "doable".

Indian National Security Adviser M K Narayanan recently said that
India-Iran relations need to be handled in a subtle way. "It [Iran] is
a big country, it is a major country, with tremendous influence, and
you need to deal with it diplomatically. Otherwise, the world will
have to pay a heavy price," he told a conference.

Indeed, the reasons for India's new approach are many and the stakes
are quite high.

Firstly, India desperately needs energy sources, with competitor China
equally keen to tap Iran's rich hydrocarbon fields. China has
expressed willingness to join a truncated IPI should India keep away
from it.

Pakistan has been smarting under Washington's pro-India tilt and will
be happy to accommodate China. This year, a Pakistan Foreign Office
spokesman said, "If there are prospects of China joining the IPI
project with or without India, we will welcome it. Pakistan is
committed to the pipeline because of its desire to achieve energy
security."

Secondly, domestic Indian politics is a big determining factor now.
Political parties will look to exploit New Delhi as a "US stooge" in
general elections due in a year.

There is the fear of a backlash from Indian Muslim voters, who
constitute a sizable constituency, and despise America due to its
attack on Iraq and now problems with Iran.

New Delhi's latest move can also be seen as an attempt to keep the
anti-US coalition partners, the left parties, happy. Indications are
that any new government next year, whether headed by the Congress, the
Bharatiya Janata Party or a Third Front formation, will have to seek
outside support.

It is important for the Congress to keep the left parties happy as it
is quite possible that they will be needed again for the next round of
government formation.

Thirdly, there is a growing view that New Delhi has to learn how to
deal and balance various nations' interests to sustain a high-growing
Indian economy, in need for new markets for both export and import.
India's gross domestic product is growing at 8-9% per annum.

Such an approach could have its dividends and result in win-win situations.

Keen to obtain new gas, India last week formally joined the Asian
Development Bank-sponsored and US-backed
Turkmenistan-Afghanistan-Pakistan (TAP) pipeline project that has now
been officially renamed as the Turkmenistan-Afghanistan-Pakistan-India
(TAPI) gas pipeline.

Indicating forward movements on IPI, Ahmadinejad told a news
conference after talks for over three-hours with Manmohan and senior
officials in New Delhi, "All pending issues and agreements will be
finalized within 45 days and given to the leadership of the three
countries. Afterwards we will decide."

An Iranian Foreign Ministry spokesman said that "reaching an agreement
on the [IPI] project will be possible" in the light of recent
ministerial level India-Pakistan talks on transit issues.

The Ahmadinejad visit will boost state-owned explorer Oil and Natural
Gas Corporation's (ONGC's) chances of winning an equity stake in the
gas-rich South Pars block in Iran, along with private player Hindujas.

According to the latest reports, the Hindujas Group-ONGC combine has
secured Iran's approval to conduct due diligence for taking stakes in
one of the largest oil and gas fields.

The deal for the projects, signed by Hindujas with NICO, a
wholly-owned subsidiary of the National Iranian Oil Co, in August
2007, had not taken off, reportedly due to Chinese attempts to win the
project. Under the deal, Hindujas will take a 45% stake in the
Azadegan oilfield and a 60% stake in Phase 12 of the giant South Pars
gas field.

Indian officials say a breakthrough could also be achieved soon in the
$22 billion liquefied natural gas deal with Tehran, signed in 2005,
for the supply of 5 million tonnes of gas per year for 25 years that
is stalled due to price disputes.

However, some analysts still say Iran is unlikely to become a major
exporter for more than a decade, given the tough attitude of Western
countries, especially the US, which has threatened sanctions against
any nation dealing with Tehran.

Ahmadinejad believes otherwise, "The ruling powers are collapsing and
falling down. We just prepare ourselves for the collapse. America is
not the previous America. It is the falling power," he said in New
Delhi. The Iranian president criticized "bullying powers" for trying
to rein "Iran's right to develop nuclear energy".

Clearly, dealing with both Iran and the US will be one of the big
foreign-policy challenges India will face in the near future.

Siddharth Srivastava is a New Delhi-based journalist.

-- 
Yoshie
<http://montages.blogspot.com/>