Why India can't afford to pass the gas

In the increasingly competitive race of gaining clout in Asia, the Indian tiger (or a lion, as the current government would have it) always finds itself accosted by the Chinese dragon. These confrontations have hardly tilted India's way: it has been playing second fiddle to its eastern neighbour for a long time now.

However, this could change soon in Central Asia - the cultural crossroads between Europe and Asia - which is rich with minerals, crude oil and natural gas. As part of India's 'Connect Central Asia' policy to increase strategic bilateral co-operation, Sushma Swaraj, the minister of external affairs recently visited Ashgabat, the capital of Turkmenistan.

Among various avenues for cooperation between the two countries that were discussed during the visit, one is particularly important and requires immediate resolution: the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline, a project that has been in the works since five years now. The 1800-kilometre long, trans-country pipeline will start from its Galkynysh gas field, which is the world's second largest natural gas reserve, pass through Afghanistan and Pakistan, and end in Punjab. Once completed, it could satisfy up to 35 per cent of India's annual natural gas demand.

Successful construction of the TAPI pipeline is pertinent to India not only to secure its energy, but also to establish its stronghold in Central Asia. India has been unsuccessful in competing with China in Asia, at least on two occasions.

First, it lost out on securing natural gas from the western coast of Myanmar in 2013, when China capitalised on India's inability to strike a deal with Bangladesh on a Myanmar-Bangladesh-India natural gas pipeline. Hence, the pipeline is now in place but travels eastward to Kunming in China. The second blow was in Kazakhstan in the same year. ConocoPhillips, an American oil company, owned 8.4 per cent stake in Kazakhstan's oil fields and was willing to sell it to India's national oil company ONGC. This deal had received a green signal from the Kazakhstani government, until the last moment, when China thwarted India's attempt by acquiring ConocoPhillips' stake for a $3 billion premium and a promise to cover a part of the cost of developing the fields.

However, this time, India's geo-political fortunes in Turkmenistan might turn out to be better than its previous experiences. In October 2014, Russia curbed imports of gas from Turkmenistan after it became strapped for cash due to the sanctions imposed on it by the Western countries. China swooped in to fill the gap. In lieu of the Chinese oil company CNPC's promise to develop the Galkynysh fields and build pipelines to transport the oil and gas, Turkmenistan signed a deal with China to increase its supply of gas from the current 35 BCM to a minimum of 65 BCM over a couple of years.

Turkmenistan realises now, that it has become heavily dependent on the Chinese economy, its only major customer after Russia backed out. Fearing a Chinese domination, it has now turned to India. The development of India as an export market would bring about a breakthrough in its ambitious energy production and export goals, not to mention diversification beyond the Chinese and the Russians.

India could use the gas, and Turkmenistan has lots of it. It possesses the world's sixth largest reserve of natural gas. Not only that, a constant, assured supply of at a pre-decided price through a pipeline is a much preferred alternative to importing liquefied natural gas through sea-tankers, which are more expensive and exposed to the volatility of the international market.

Indian foreign policy after elections has become more muscular in assertion of its national interests in international affairs. No previous Indian prime minister has participated in so many multilateral and bilateral summits in the first few months. Post Narendra Modi's swearing in, in May 2014 (which itself caught everyone's attention), the new government has strongly focussed on increasing India's presence in the neighbouring region.

Despite these efforts, India's foreign policy aggression has not translated to substantial outcomes. Modi's upcoming visit to Turkmenistan in July holds possibility to change that. The TAPI pipeline could become the game-changer and India's pivot in Central Asia. India definitely cannot afford to pass the gas. The time is right and the iron is hot to cast the pipe.