Consulate of Islamic Republic of IRAN, Hyderabad

Indo-Iranian energy cooperation
The inability to resolve the Kashmir dispute between Pakistan and India has undermined the viability of an Iran-Pakistan-India natural gas pipeline. A memorandum of understanding was signed between Iran and India in 1993 for a $4 billion 1,700 kilometer pipeline from Iran's South Pars field with 700 kilometers passing through Pakistani territory. Pakistan stands to benefit with gas to meet its own energy needs and $500 million in transit fees.

The international community has also shown growing interest in the Iran-Pakistan-India pipeline, with the World Bank and Japan's Sumitomo Mitsui Banking Corporation willing to finance the project. Russia also supports the project, although the US opposes it, instead pushing for the competing trans-Afghan pipeline project.

However, in the presence of sporadic tensions between India and Pakistan, both states have often proposed separate pipeline projects with Iran, with India sometimes pushing for the expensive option of a deep-sea pipeline that bypasses Pakistan altogether. Rising oil prices and a recent improvement in Indo-Pakistani relations following a commitment to resume a "composite dialogue" in January 2004 has revived hopes for the "peace pipeline", which has now become one of the confidence-building measures being pursued by both states.

Notably, Pakistan has offered security guarantees for the pipeline, vowing that gas flow will not be "switched off", even during periods of Indo-Pak tensions or hostilities. However, the future of the pipeline project is once again in doubt due to periodic violence across the Line of Control in Kashmir and rising tensions in Pakistan's Balochistan province, with attacks by the Baloch Liberation Front on energy infrastructure.

At the beginning of 2005, India also completed a $40 billion deal with Iran to import 7.5 million tons of liquefied natural gas annually over a 25-year period, as well as obtaining stakes in the development of Iran's largest onshore oilfield, Yadavaran, as well the Jufeir oilfield. The Yahavaran oilfield is a Sino-Indian-Iranian collaboration with India holding a 20% stake, China 50% and 30% with Iran. In exchange for Iranian gas, India is investing in Iran's ports and energy infrastructure. Iran and India have agreed to jointly develop the Iranian port at Chabahar as well as the road linking the port to Afghanistan and Central Asia, and grant India exclusive rights to the port.

Cooperation in the energy arena is mirroring relations in other arenas, including trade and military cooperation. Bilateral exchanges of defense and intelligence officials are routine and in 2003 both states conducted joint naval exercises. These developments have not only concerned India's traditional adversaries, China and Pakistan, but also its newly found allies, Israel and the United States, who fear that military technology supplied to India could be diverted to Iran.

Indian delegation visits Iran
TEHRAN, Feb. 6 – Indian Andhra Pradesh trade delegation is in Iran to further economic cooperation with Iran.
In their visit to the Khorasan Razavi Province, the delegation was welcomed by an economic official from the governorship who promised to provide facilities for both Iranian and Indian businessmen. The Indian delegation plans to negotiate with Iranian counterparts in agriculture, plastic and chemical, IT, and food industries. The Indian head of the delegation, Mr. Kenka, praised the 700 year trade background of Iran and his country saying that Khorasan Razavi Province and the Indian Heidarabad are two sister cities and this sisterhood will make it easier to expand bilateral business between the two cities. He elaborated about the economic potentials existing in the Andhra Pradesh Province especially on biotechnology, medicine, IT, textile, and packaging industries.