The policy of forging economic ties with our neighbours is to consider common interests in continuing and strengthening of ties that would pay rich dividends in augmenting energy resources and also improve overall relations.

The United Progressive Alliance government carried forward with the previous government's efforts to access natural gas through overland pipelines from Iran and Myanmar via Pakistan and Bangladesh, respectively.

The pipeline mania has now strayed across to west Asia and the central Asian region.

The perception is that to access gas from Myanmar and Iran, and now Qatar and Turkmenistan, is an energy panacea. The posture adopted by the petroleum minister conveys the impression that India is starving because of lack of energy resources and is desperate to access natural gas from anywhere and, perhaps, at any cost.

This view intensified after the haste and eagerness with which India embarked on negotiations with Myanmar and Bangladesh for a trifling quantity of 2 trillion cubic feet of gas from the Shwe field in Myanmar; the negotiations now appear to have been put off.

Instead of adopting a posture of "negotiating from strength", the Indian petroleum minister, during his road shows abroad (in Calgary, Canada, in this particular case) said, "Take my oil, please. We invite you to come and get it."

He even said, "I'd simply go down on my knees and say, Please, please come. India desperately needs to find more oil and gas."

* No wonder then, Iran, Pakistan, Bangladesh and even Myanmar are downplaying the tremendous economic benefits that would accrue to them in case the pipeline projects come through.

Pakistan would earn an estimated $ 500 million as yearly transit fees and Bangladesh $ 125 million.

The just concluded visit of Mani Shankar Aiyar to Pakistan is crucial in judging the success of government's pipeline diplomacy. If the results are not spectacular, it is not for want of effort by the petroleum minister.

For a better perspective, compare Myanmar's 11 TCF of gas reserves, Bangladesh's 10.6 TCF or the higher estimate of 24 TCF, and Turkmenistan's reserve of between 71 TCF (Oil & Gas Journal) and 101 TCF (Cedigaz) with Iran' 940 TCF and Qatar's 910.

India's participation in the Iran-Pakistan-India pipeline project is of paramount importance to Iran. In addition to a broader market for its gas, Iran hopes to gain political support from India as it is facing strong international pressure, especially from the United States, to terminate its nuclear agenda. 

There are grave security concerns for India because the pipeline transits through Pakistan. The question uppermost in the minds of every Indian is, "Is it prudent to depend so heavily on Pakistan for our energy security?"

Additionally, the opposition from Washington (its caution to Islamabad over the likelihood of facing sanctions under the Iran and Libya Sanctions Act of 1996) suggests that India-Iran pipeline may never actually take off.

Far from signing the Iran deal by December 2004, President Musharraf will now arrive on "a decision" by December 2005, after more studies. The truth is, the "studies" are all done; only the issue of pricing remains to be resolved. The US pressure on Pakistan is obviously showing.

Pakistan Commerce Minister Humayun Khan had hinted in March 2005 at the possibility of accessing gas through a pipeline from sources other than Iran.

Predictably, Islamabad is now concentrating on the Asian Development Bank-backed pipeline from Turkmenistan and exploring the possibility of building a far more expensive, deep-sea, sub-sea and overland pipeline from Qatar.

As a conciliatory gesture, Musharraf says he has no issue with India playing a more active role in the proposed Qatar pipeline, which is unlikely to be viable in any case.

During his much-hyped visit to India in April 2005, Pakistan President Musharraf casually skirted the issue of the India-Pakistan diesel pipeline.

During Aiyar's visit, Pakistan predictably gave the proverbial slip on diesel exports. Aiyar could not even hold a formal negotiation on June 7, as the Pakistani commerce minister rushed out of town.

Obviously, Pakistan wants to link this pipeline to extract additional political concessions and might want to connect it to the Baglihar dam (on river Chenab in Kashmir) and water resources issues, both of which are contentious.

India, on the other hand, treats diesel exports as a first step in an economic relationship where there is free transit or trade across the border, which strengthens common interests. 

On conclusion of his visit to Pakistan, when queried whether the "new emissary of peace" from India is a claimant for the post of external affairs minister, Aiyar exclaimed, "Not at all, I have no desire to be involved in the ministry of external affairs. I prefer doing constructive work!"

* "India calls it the Gold Rush of the 21st century, CarrotAndStick, March 2, 2005.

The writer is an ex-CMD of Oil India Limited and ONGC [Get Quote] Videsh Limited.