TAPI and the Prospects of an Indian-Turkmen Strategic Partnership

For more than 15 years, the Trans-Afghanistan Pipeline (TAPI) project, which proposes to deliver gas from Turkmenistan to Pakistan and India via Afghanistan, has remained an elusive scheme. Backed by the West and the Asian Development Bank (ADB), it is a subject of intense debate centering on security conditions in the Afghanistan-Pakistan region and rivalries between New Delhi and Islamabad (www.utro.ru, June 2). Yet, the recently intensified contacts among parties to the proposal (particularly between India and Turkmenistan) indicate growing prospects for the TAPI. If the pipeline becomes operational, it will serve as an interconnector linking Central and South Asia, laying the foundation for a multi-sided strategic partnership between India and Turkmenistan – two states with differing political systems that are also eager to promote diversification in their foreign relations, especially in the energy field. The visit by Turkmen President, Gurbanguly Berdimuhamedov, on May 26 to India represented another step in this direction.

Meeting with Indian Prime Minister, Manmohan Singh, and President, Pratibha Devisingh Patil, Berdimuhamedov reaffirmed Ashgabat’s interest in the TAPI pipeline. He emphasized that Turkmenistan views India as its strategic energy partner. Singh, in turn, expressed keen interest in the proposal, stressing it would bring immense value to all participants (www.ferghana.ru, May 27). Berdimuhamedov’s visit comes after the April conference in Ashgabat that convened the interested parties for the first time in three years to discuss the stalled project (Dawn, March 15).

If launched, the TAPI has potential to more tightly connect Central and South Asia –the regions once estranged by decades of Russian-British rivalries and the Cold War. The project will also lead to opening new or expanding existing trade, electricity and transit networks across Eurasia, enhancing the competiveness of Central and South Asia in the global economy. It will further allow Turkmenistan and India to boost and diversify their trade and energy relations with countries in South Asia, CIS and Europe (www.turkmenistan.gov.tm, May 26).

Currently, Indian-Turkmen relations underperform, despite their tremendous potential. There is only one joint venture, Turkmenderman-Ajanta Pharma Ltd, which has operated after the disbursement by India of $15 million in loans to Turkmenistan. From April 2007 to March 2008 the trade turnover between the two countries reached a mere $45 million, with imports by Turkmenistan constituting $36.39 million. The signing of agreements on trade, energy, and technology during Berdimuhamedov’s visit and plans to launch a related inter-governmental commission demonstrates that both parties intend to boost their relations, with the TAPI potentially serving as the engine in the bilateral relationship (www.ferghana.ru, May 27).

Turkmenistan is interested in promoting trade and investment relations with India, as the latter economy has grown rapidly, even in the aftermath of the global financial crisis. Berdimuhamedov, for instance, called on India to invest in Turkmenistan’s chemical, mining, textile, pharmaceutical, and telecommunications industry. Ashgabat now aims to diversify its economy while prioritizing the energy industry and exports as the driving force behind the diversification process (www.turkmenistan.gov.tm, May 24; www.ferghana.ru, May 27). This process has gained momentum after gas-related disputes with Russia in the wake of the global financial crisis that led to massive profit losses for Turkmenistan and reduced Russian imports of Turkmen gas (EDM, May 12).

India, in turn, seeks access to Central Asian energy reserves and the expanding regional presence of China. The recently constructed pipeline carrying gas from Turkmenistan to China via Uzbekistan and Kazakhstan clearly demonstrates that India is a late-comer in Central Asia. To compete globally and regionally, India needs to rapidly reconnect with Central Asia. Reinvigorating the work on the TAPI, which will provide India with 60 percent of the 33 billion cubic meters (bcm) of gas annually, is therefore essential for New Delhi, given the lack of prospects to import gas from Iran (Dawn, March 15). Turkmenistan’s Davletobad deposits, which contain 4.5 to 16 thousand cubic meters (tcm) of gas, can easily supply India with the necessary volumes of gas. New Delhi requires up to 110 bcm of gas annually to meet its needs, while Ashgabat currently plans to export to a diverse group of countries up to 125 bcm of gas per year by 2015 (www.turkmenistan.ru, May 24; www.chrono-tm.org, May 26; www.integrum.ru, May 20, 2005; www.energyland.info, May 10).

Difficult security conditions in Afghanistan and unresolved issues between India and Pakistan may serve to encourage the launch of the TAPI rather than cause its failure. Moreover, providing its parties with diversified energy imports, the project would assist with the reconstruction of Afghanistan by providing twelve thousand jobs to the Afghans and $400 million in annual transit fees to the country (www.islamnews.ru, April 3). The planned withdrawal of coalition forces only reinforces this imperative as the operation of the pipeline will ensure a steady stream of financial flows, with local and regional actors gradually developing a lasting stake in the emerging economic links. The TAPI will also contribute to a more competitive economic and political environment in Central Asia, providing Ashgabat with more room to maneuver vis-à-vis Russia, the West, China, India and Iran –the players that either have, or plan, a significant presence in Turkmenistan’s energy sector.

Pakistan, expected to increase its annual gas consumption to 44.5 bcm this year, will also benefit from the TAPI through diversified and expanded energy and trade relations with regional actors (www.integrum.ru, May 20, 2005). India, Pakistan and Afghanistan have already signed a framework agreement to purchase gas from Turkmenistan. Western support for the project makes the TAPI a viable undertaking, particularly considering international attempts to isolate Iran –another potential but less likely source of gas for India– from regional initiatives (www.utro.ru, June 2; www.chrono-tm.org, May 26; Dawn, March 15).

India has actively supported Turkmenistan’s neutrality, just as Ashgabat has backed New Delhi’s candidacy for a rotating seat on the UN Security Council for 2011-2012 (www.turkmenistan.gov.tm, May 26). Both states clearly do not confuse traditions of neutrality, relevant for both nations, with the need to diversify their foreign relations. India’s unprecedented economic growth and Turkmenistan’s search for diversification naturally encourage them to revive the TAPI project that will only further bind Central and South Asia with markets across Eurasia, while enhancing the prospects of a multi-faceted strategic partnership between New Delhi and Ashgabat in the process.