Aware that detente between India and Pakistan will give a fillip ...
NEW DELHI: Aware that detente between India and Pakistan will give a fillip to the long-awaited 2,600 km Iran-India-Pakistan gas pipeline project, the Federation of Indian Chambers of Commerce and Industry has appealed for a global consortium of Japanese and European companies, together with Iran, Pakistan and the IMF, to finance the overland pipeline.
FICCI's appeal at this juncture is significant, as the pipeline could be a major sop for General Musharraf who has to be seen doing something to revive Pakistan's economy. It will also give him a glimpse of how much the two countries could benefit from being good neighbours. The pipeline could fetch cash-strapped Pakistan anywhere from $200-600 million annually in transit fees.
"We want the IMF, the EU, the Japanese and others to be involved in this, together, of course, with Iran and Pakistan," says Amit Mitra of FICCI. "An international consortium to finance and run the pipeline would raise the broad comfort levels of all concerned," he said. It would certainly reassure Indian industrialists wanting to use the gas from Iranian oilfields.
Mitra was echoing fears in certain sections of the government that the pipeline could be used as a pressure point by Pakistan or rogue groups operating in that country to stop gas supplies to India. However, that argument has lost much of its appeal, after SMH Adeli, Iran's deputy foreign minister for economic affairs, told reporters here earlier this month that India would be compensated if oil supplies are stopped. "We will deliver gas in a reliable and secure manner," Adeli had said.
FICCI, at present, rules out any Indian involvement with a consortium to finance the pipeline. But Indian companies can work with Iran, industry sources say. Reliance is already in the picture for the transport of Liquefied Natural Gas from Iran in vessels to India.
FICCI president Chirayu Amin has written to Prime Minister Vajpayee asking for time with President Musharraf when he comes here next month. Business leaders are worried that Musharraf's hectic schedule will leave him no time to interact with the captains of Indian industry. Pakistan's business leaders, who are equally interested in promoting economic ties that will benefit both sides are also urging Musharraf to make time for a meeting with Indian industry representatives.
So far, there has been no response from the PM or his office.
FICCI hopes that the summit would revive the move to buy power from Pakistan, which has an excess of 10,000 megawatts. An earlier attempt had fizzled out. According to industry sources, pricing had been a major hurdle. Islamabad wants to sell power for Rs 4.50 per unit, while India wants it at around Rs 2.50. Putting up a structure to switch the grid to suit Indian conditions would be a simple affair and can benefit both sides, industrialists say.
FICCI believes that trade between India and Pakistan should be a two-way affair. India can supply pharmaceuticals, tyres, textile machinery, chemicals and plastics to Pakistan. The other side could also provide certain niche items that India requires like cotton yarn, leather and some specialised auto parts. At present, there are just 600 items which may be traded between the two countries.