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Iran To Discuss International Trade Deal With India And Pakistan

Iranian officials are set to negotiate an International Trade deal with India and Pakistan. The meeting, which will be held in New Delhi, will focus on the proposed construction of a new gas pipeline that would link the three nations. According to sources, the duct would transport natural gas more than 2,500 kms from Iran to India. Moreover, the project is expected to begin in 2007. Needless to say, the three parties have not yet agreed as to how much should India and Pakistan pay in the International Deal.

But analysts said that the huge gas pipeline project would largely benefit India, which has been looking for opportunities that could boost its energy resources. The nation, which supplies 50% of its gas needs, relies on its energy imports in order to cope with the rising demand. It must be noted that energy needs continue to swell in India due to the rapid growth of its industries and economy. In fact, energy demand in the nation is expected to double in the next fifteen years. An International Deal such as the gas pipeline project, then, is important for an energy-starved country like India.

Likewise, the International Deal is also expected to boost the economy of Pakistan, which would be gaining millions of dollars through transit fees. It must be noted that the three parties already discussed about the proposal last may. However, they were unable to reach an agreement during that time due to disagreement on gas prices that should be paid by both India and Iran. Particularly, the Indian government has asked to pay a fixed amount for every unit transported to its border. However, Iran disagreed saying that the offer made by both India and Pakistan was only half of the price, which it was targeting. Moreover, Iran demanded that the gas cost should be based on the global energy prices, which are currently unstable.

More than the price dispute among the three parties, it must be noted that the gas deal would certainly play a major role their economic improvement. Moreover, the International Deal would also ensure energy security for both India and Pakistan, which face the risk of energy shortages as a result of the increasing demand. If the issue on gas prices would be resolved, the construction of the gas pipeline would begin before the end of 2007. It must be noted that the United States previously opposed the International Deal due to the financial benefits, as well as strategic advantages it would give to Iran. However, during the visit of President George W. Bush to Pakistan last March, he seemed to indicated that the US government had already dropped its strong rejection of the gas pipeline project. During the visit, Mr. Bush stated that he understood Pakistan's need for more natural gas. Moreover, he said that the US' dispute with Iran was only limited to the latter's uranium enrichment programme. Based on reports, the huge gas project would cost around $6 billion.

Submitted by:

Vasily Klimko

For more valuable information on International trade, please visit http://www.toboc.com


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