[Inter Press Service, 2 May 2008 |http://ipsnews.net/news.asp?idnews=42202|en]

by Praful Bidwai

NEW DELHI, May 2 (IPS) - Relations between India and Iran, which deteriorated over the past three years from traditional friendship and warmth into mutual suspicion and tension, have started looking up again.

This development has significant implications for India’s role in West Asia and Central Asia as well as ties with its new 'strategic partner', the United States.

Iranian President Mahmoud Ahmadinejad’s one-day visit to New Delhi on Tuesday is expected to kickstart talks aimed at reviving long-stalled contracts for the purchase of natural gas, and at improving cooperation in a number of areas, including industry, communications and trade.

This was the first visit to India by an Iranian President since January 2003.

Ahmadinejad was originally meant to stop over in Delhi en route from Colombo for refuelling his plane.

But as soon as it was sounded out on this, India’s Ministry of External Affairs (MEA) seized the opportunity to make the stopover a full-fledged official visit, with a meeting with Indian President Pratibha Patil, and a dinner meeting with Prime Minister Manmohan Singh, to which petroleum minister Murli Deora was also invited.

At the top of the agenda of the meeting with Singh was a proposed 7.4 billion dollar 2,600 km-long gas pipeline from Iran to Pakistan and India, which has become an icon of mutual cooperation, friendship and peace, as well as a test for India’s willingness to chart out a foreign policy course independent of Washington.

The pipeline, considered relevant for India long-term energy security, was stalled for a variety of reasons. Some of these are commercial, but the more important ones are related to political pressure from the U.S., which regards Iran as a rogue state or "state of concern" and wants to isolate it.

More talks will be needed to finalise the pipeline agreement. But if India, Iran and Pakistan do complete the deal, New Delhi will have to reorient its overall foreign policy posture and prepare to face more explicit opposition and greater pressure from the U.S.

"India signalled a small shift in that direction just before Ahmadinejad’s visit," says Qamar Agha, a Middle East expert who was until recently a visiting professor at the Centre for West Asian Studies at Jamia Millia Islamia university here. "Last week, the MEA issued an unusually strong statement rebuffing the U.S. State Department deputy spokesperson Tom Casey, which asked India to tell Iran that it must meet the obligations imposed upon it by the Security Council to suspend its uranium enrichment activities."

The MEA statement said: "India and Iran are civilisations whose relations spans centuries. Both nations are perfectly capable of managing all aspects of their relationship with the appropriate degree of care…. Neither country needs any guidance on the future conduct of bilateral relations as both countries believe that engagement and dialogue alone lead to peace."

A day later, Indian Foreign Minister Pranab Mukherjee also said that it is not for the U.S. or any other state to usurp the power to declare Iran a rogue nuclear state; it is entirely for the UN watchdog, the International Atomic Energy Agency (IAEA), to decide if Iran is developing nuclear weapons or not.

Earlier, India’s National Security Adviser M.K. Narayanan too had stressed India’s "civilisational and economic ties" with Iran, which give India a vantage point to engage with it. Iran, he said, "is a major country with tremendous influence, and you need to deal with it diplomatically... (with) erudition and understanding ..."

India’s new position stands in sharp contrast to its votes against Iran at the IAEA in September 2005 and again in early 2006, which resulted in Iran being brought before the United Nations Security Council for sanctions.

A former U.S. official and chief arms-control negotiator, Stephen Rademaker, has publicly said that India’s votes against Iran were secured through "coercion".

The reason for India’s recent change of stance has been attributed to various factors, including the ruling United Progressive Alliance’s need to demonstrate its "foreign policy independence" ahead of a general election due within a year, a desire to ensure the Left parties’ support, and keenness to tie up long-term energy supplies in an era of historically unprecedented oil prices.

"Perhaps the most important consideration," says Agha, "is that the Indian government knows that the nuclear cooperation deal with the United States is unlikely to be clinched soon, under George W. Bush’s presidency. This means that India does not have to look over the shoulder all the time at Washington, and that it can have greater autonomy in practice."

Agha added: ''New Delhi is also anxious to broaden and deepen its relationship with Tehran, not least because Iran holds the key to India’s access to Afghanistan, and to Central Asia, with its enormous natural wealth, including oil and natural gas. If India is to sustain 8 percent GDP growth, its policymakers believe it must establish guaranteed access to Central Asia’s resources before China and Russia consolidate their position in the region."

In recent weeks, India has discussed possibilities of deepening industrial and economic cooperation with Iran, beyond oil and gas.

India has agreed to help Iran build a crucial 600-km rail link in the north-south corridor of the proposed Trans-Asian Railway project. This will run from the Iranian port of Chabahar to Fahraj, and through Azerbaijan and Russia all the way to St Petersburg.

India is already constructing a road link between Zaranj and Delaram in Western Afghanistan, which will be linked to a transit corridor to Chabahar, which is close to India’s upper West coast.

This will enable India to trade with Afghanistan while bypassing Pakistan, which is reluctant to grant it India transit rights.

Other projects - including metallurgical industries, gas liquefaction and port development - are also under discussion. India is being offered large contracts in Iran for laying railway tracks, supplying electrical equipment, and upgrading railway signalling systems and train operations.

However, what of the crucial Iran-Pakistan-India pipeline? Ahmadinejad expressed the hope that the three countries’ petroleum ministers would reach an agreement on the project within the next 45 days.

But India’s Foreign Secretary Shivshankar Menon was more cautious and said a "lot of work" needs to be done to ensure that the pipeline is commercially viable and secure, and that gas supply is not interrupted.

However, it is clear that India sees the pipeline as a "confidence-building measure", not just a commercial project.

"Yet, that does not mean that the project will go through without major problems," says a high official in India’s petroleum ministry, who requested anonymity under briefing rules. "At least three issues need to be resolved. First, India wants a dedicated gas field to be nominated for the project, with detailed development plans. Second, India wants custody of the gas only at the India-Pakistan border, and not at the Pakistan-Iran border near Gwadar, as proposed."

Adds the official: "And then there’s the issue of pricing of the gas. India, Iran and Pakistan reached an agreement in January last year on the base price. But Iran wants any future price revision based on a shifting band, not a fixed one. This may not be acceptable to major consumers of gas in India, who can only pay a limited price for fuel in power generation."

None of these problems is insuperable but most agree that political will is needed to resolve them.