India can bypass Pakistan for gas pipeline project with Iran: ASSOCHAM Study

India must fully exploit the economic opportunities unfolding from lifting of western sanctions on Iran , bypassing Pakistan for import of natural gas as also enhancing merchandise trade through a Preferential Trade Agreement(PTA) with the key West Asian strategic nation, an ASSOCHAM study has said.

Lifting of western sanctions on Iran throws a great opportunity for India to transport natural gas Iran to Porbandar port in Gujarat, bypassing Pakistan - the main sticking point for the other multilateral projects of Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI), an ASSOCHAM has said.

Lifting of Western sanctions now holds the promise of starting an undersea pipeline project that would bring Iranian gas to India via the Arabian Sea, bypassing Pakistan. With the Iran-Pakistan-India (IPI) pipeline still stuck and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipelines yet to take off, the South Asia Gas Enterprises(SAGE) has proposed under sea pipeline bypassing Pakistan's exclusive economic zone (EEZ) to transport up to 1.1 billion standard cubic feet per day of gas from Chabahar in Iran and Ra's al Jifan in Oman to Porbandar in Gujarat state with a spur line to Mumbai later. The 1,200-1,300 km pipeline, set to cost around $4.5 billion, the ASSOCHAM Paper on India's Trade with Iran, pointed out.

India is increasingly looking abroad for natural gas, which it does not import from Iran. India needs to resurrect Iranian oil and gas projects that were stalled due to international sanctions on Iran. A consortium of Indian public sector companies - ONGC Videsh, Oil India and India Oil Corporation - had discovered gas in the Farzad-B block in Iran in 2008 and subsequently prepared a field development plan to recover about 12.8 trillion cubic feet of gas. The plan had to be abandoned following the sanctions on Iran. India has already spent $90 million on exploration.

Given the kind of serious political problems, the proposed pipeline projects involving Pakistan, it is feared, may remain the pipe dream. All other viable alternatives to enhance India's energy security must be explored, ASSOCHAM Secretary General Mr D S Rawat said.

The SAGE pipeline, also called Middle East to India Deepwater Pipeline (MEIDP), project, would start from Chabahar on the southern coast of Iran and Ras Al-Jafan on the Oman coast. The pipeline, after traversing deep in the Arabian Sea, would bring gas to Porbandar in south Gujarat.

The study also suggested signing of Preferential Trade Agreement (PTA) with Iran since the similar Iranian arrangement with Pakistan has become almost dead.

Initially, the PTA gave a significant boost to Pakistan's exports to Iran and increased bilateral trade as well. Pak-Iran trade witnessed considerable progress during the first three years of the post PTA period i.e. from 2006-07 to 2008-09 in which bilateral trade increased from $573.76 million to an unprecedented level of $1321.32 million. Pakistan's exports to Iran increased from $167.55 million to $399.62 million, while imports from Iran also jumped from $405.76 to $921.7 during the same period.

However, Pak-Iran trade started declining gradually from the level of $1321.3 million in 2008-09 to a mere $218 million in 2013-14. Pakistan's exports to Iran in 2013-14 declined to $53 million from U.S. $ 97.7 million in 2012-13.

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