Both sides will hold the next round in Delhi in November
In a sign of revival of ties with Iran, India quietly concluded a major part of negotiations for a lucrative gas field days before Prime Minister Manmohan Singh met Iranian President Mahmound Ahmadinejad in New York and accepted an invitation from him to visit Tehran.
As is the case with all major projects with Iran, the one to develop the Farzad-B gas field was stalled for two years despite India's need for compressed natural gas. New Delhi was compelled to move following a gentle warning from Iran that it was planning to reduce the stake of Indian companies in the project.
Intensive negotiations over five days on Iran's Kish Island saw both sides negotiating the main part of the contract which had been left partly discussed when talks last broke off in November 2009, government sources told The Hindu.
Both sides will now hold the next round of talks here in November when the more important issue of internal rate of return and security of investment will be discussed.
The renewal of talks on energy projects could set the stage for purposeful discussions on the development of the Iranian port of Chabar, said to be the shortest route for sending supplies into the Pashtun-dominated southern Afghanistan. Some developments on the Chabar front such as extending the free zone area to the port are in line with Indian preconditions for expanding its capacity five times.
A short distance away from the Gwadar port in Pakistan being built by the Chinese, Chabar can be connected to the hinterland of Afghanistan as well as its major cities and even beyond to Central Asia. This could be facilitated by linking up Chabar to the Iranian border town of Milak. An Indian-built road from the corresponding Afghan border town of Zaranj then leads to the Afghan garland highway.
India had been pursuing the project for some time before it was stalled following American moves to isolate Iran. There was no response to invitations to hold talks on the Iran-Pakistan-India pipeline, the system of payments for importing crude from Iran was frequently changed and unsatisfying talks on Chabar.
Iran is learnt to be keeping its fingers crossed with respect to talks on the gas field given India's reluctance so far to take negotiations on any of the projects forward.
Oil and Natural Gas Corporation (ONGC) and Indian Oil hold 80 per cent stake in the block and Oil India the remaining 20 per cent. India went for talks after Iran said it was planning to shift the project to an Iranian consortium and offered only a 30 per cent stake to the ONGC.
Informed sources expected the thaw to have some impact on the situation in Afghanistan. Both countries approve a regional solution with India taking up the gauntlet for the Shanghai Cooperation Organisation (SCO) Plus countries. The SCO consists of four Central Asian countries, besides Russia and China. The SCO Plus includes India, Iran and Pakistan as Observers and Afghanistan as a Special Invitee.
Like India, Iran is inimical to the idea of Taliban, which it sees as Sunni-dominated and anti-Shia, calling the shots in Kabul. Burdened by refugees since the conflict began in 1979, Iran is apprehensive of a fresh wave of migration from Afghanistan's Shia Hazara community in case the Taliban once again takes power. However, India is in favour of the U.S.-led forces remaining in Afghanistan for some time, Iran insists on the immediate and complete withdrawal of all foreign troops.
Sources said though these are early days, the Chabar route could be a much better alternative for taking supplies into Afghanistan. The U.S. and its allies are attempting to reduce dependence on the route through Pakistan but the alternative Northern Distribution Network with its funnel into Afghanistan at Uzbekistan is more expensive. One of the NDN route from Germany goes through as many as 10 countries before culminating in Uzbekistan. The U.S. is also talking to China for a supply route from its Xinjiang province but this too goes across forbidding terrain.