The political economy of trans-Pakistan gas pipeline project: assessing the political and economic risks for India

There is a growing realisation among Indian policy makers to consider the import of natural gas to address India's growing energy demand. Among many policy options to import natural gas, Indo-Iran overland pipeline option is considered to be effective and economical in addressing India's long-term energy demands. Such a pipeline would have to traverse Pakistani territory thereby necessitating a role for Pakistan in the pipeline project. Though security guarantees have been offered, India refuses to entertain the role of Pakistan in the project for a fear of its energy supply being disrupted in case of a military conflict with Pakistan. This paper argues that gas pipeline project is not only aimed at addressing India's energy concerns but also to further its strategic objectives. This paper contends that India, Iran and Pakistan do not have shared objective to make the overland project a political and commercial reality. India's stakes in the overland pipeline project are high as India's economic interests in the pipeline project are not in congruence with the politico-economic and strategic objectives of Iran and Pakistan. (C) 2003 Elsevier Ltd. All rights reserved.