India’s Economic Opportunities and Energy Security: Analysing Prospects Within SAARC and Beyond

Abstract

It has been extensively debated whether India should prioritise relations with its immediate or extended neighbourhood. Put into the framework of energy security and competition with China, it will be argued that the recently signed South Asian Association for Regional Co-operation (SAARC) framework agreement can provide the basis and open up new opportunities for inter- and sub-regional energy co-operation in Asia. Furthermore, besides concrete proposals, such as a two-track process within SAARC, it will also be suggested that in order to successfully extend this framework and tackle the region’s energy dependence, India should embark on the development of triangular foreign policy strategies, connecting Iran, Russia, Japan and the United States with its immediate neighbourhood more significantly.

Notes

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2. Besides the 36-point Kathmandu Declaration, the Framework Agreement for Energy Cooperation (Electricity) was also signed at the 18th SAARC summit. With the announcement of Pakistan as the next host of the summit for 2016, expectations for the conclusion of the claimed ‘internal processes’ were also expressed in order to sign the ‘Regulation of Passenger and Cargo Vehicular Traffic amongst SAARC Member States’ and the ‘SAARC Regional Agreement on Railways’ in the near future. ‘SAARC Leaders Reach Last Minute Energy Deal’, The Hindu, November 28, 2014, at http://www.thehindu.com/news/international/south-asia/saarc-leaders-reach-energy-deal/article6639785.ece (Accessed December 28, 2014); Mirza Sadaqat Huda, ‘The Next Steps for SAARC Energy Agreement’, Dhaka Tribune, December 24, 2014, at http://www.dhakatribune.com/op-ed/2014/dec/24/next-steps-saarc-energy-agreement#sthash.WLHnMs7q.dpuf (Accessed December 27, 2014); ‘SAARC Framework Agreement for Energy Cooperation (Electricity)’, at http://www.saarc-sec.org/userfiles/SAARC-FRAMEWORK-AGREEMENT-FOR-ENERGY-COOPERATION-ELECTRICITY.pdf (Accessed December 27, 2014); ‘SAARC Agreements’, at http://saarc-sec.org/Agreements/69/ (Accessed December 27, 2014); ‘SAARC Action Plan on Energy Conservation’, at http://saarcenergy.org/Portals/1/Repository/SAARC%20Action%20Plan.pdf (Accessed January 4, 2015).

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25. SAARC members: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. SAARC observers: Australia, China, the European Union, Iran, Japan, Mauritius, Myanmar, South Korea and the United States.

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28. Rajendra K. Jain, no. 8.

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31. Liu Zongyi, ‘China’s Economic Relations with SAARC: Prospects and Hurdles’, China Institute of International Studies, December 1, 2014, at http://www.ciis.org.cn/english/2014-12/01/content_7409453.htm (Accessed December 28, 2014).

32. Ibid.

33. Emily Brunjes, Nicholas Levine, Miriam Palmer, and Addison Smith, ‘China’s Increased Trade and Investment in South Asia (Spoiler Alert: It’s the Economy)’, Robert M. La Follette School of Public Affairs, University of Wisconsin-Madison, Spring 2013, at http://www.lafollette.wisc.edu/images/publications/workshops/2013-China.pdf (Accessed December 28, 2014).

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36. Emily Brunjes et al., no. 33, p. ix.

37. Ibid.

38. Ibid.

39. Ibid.; Liu Zongyi, no. 31.

40. ‘Hundreds of Millions without Power in India’, BBC, July 31, 2012, at http://www.bbc.com/news/world-asia-india-19060279 (Accessed January 3, 2015).

41. Sunil Khilnani et al., no. 9, p. 54.

42. Ibid., p. 53.

43. Ibid.

44. Ibid., p. 54.

45. Jonathan Manthorpe, ‘South Asia’s Energy Demand Fast Outstripping Supply’, Business Vancouver, September 29, 2014, at http://www.biv.com/article/2014/9/south-asias-energy-demand-fast-outstripping-supply/ (Accessed December 27, 2014).

46. US Chamber of Commerce, ‘International Index of Energy Security Risk 2013 Edition’, p. 29, at http://www.energyxxi.org/sites/default/files/pdf/InternationalIndex-Final2013.pdf (Accessed December 29, 2014); Sunil Khilnani, Rajiv Kumar, Pratab Bhanu Mehta, Lt. Gen. (Retrd.) Prakash Menon, Nandan Nilekani, Srinath Raghavan, Shyam Saran, Siddharth Varadarajan, ‘Non-Alignment 2.0, A Foreign and Strategic Policy for India in the Twenty First Century’, 2012, at http://www.cprindia.org/sites/default/files/NonAlignment%202.0_1.pdf p. 16. (Accessed January 2, 2015).

47. Ibid.

48. Ibid.

49. Ibid.

50. Ibid.

51. Ibid.; Quote cited refers to the International Energy Agency (IEA) on p.29. of the referenced PDF.

52. Energy Information Administration, ‘India’, June 26, 2014, at http://www.eia.gov/countries/analysisbriefs/India/india.pdf (Accessed January 2, 2014).

53. Jonathan Manthorpe, no. 45.

54. US Chamber of Commerce, no. 46.

55. Sunil Khilnani et al., no. 9, p. 51.

56. Liu Zongyi, no. 31; Xi Jinping, President of the People’s Republic of China, ‘Speech at the Indian Council of World Affairs’, New Delhi, September 18, 2014, at http://www.fmprc.gov.cn/mfa_eng/topics_665678/zjpcxshzzcygyslshdsschybdtjkstmedfsllkydjxgsfw/t1194300.shtml (Accessed January 2, 2015).

57. ‘SAARC Energy Agreement: What Should Be Next Steps?—Analysis’, Eurasia Review, December 8, 2014, at http://www.eurasiareview.com/08122014-saarc-energy-agreement-next-steps-analysis/ (Accessed December 29, 2014). The CASA-1000 would help Afghanistan and Pakistan import 1,000 MW. In spite of the complete feasibility study with the support of the Asian Development Bank (ADB) and the World Bank (WB), the project has stalled. SAARC Energy Centre, ‘Review of Electricity Laws and Regulations of SAARC Member States’, p. xiv, at http://saarcenergy.org/Portals/1/Repository/SAARCReview.pdf (Accessed December 20, 2014).

58. ‘Iran to Build Oil Pipeline to Afghanistan’, Press TV, November 6, 2012, at http://www.presstv.com/detail/2012/11/06/270727/iran-to-build-oil-pipeline-to-afghanistan/ (Accessed January 3, 2015).

59. ‘Russia India: Putin Agrees to Build 10 Nuclear Reactors’, The Diplomat, December 11, 2014, at http://www.bbc.com/news/world-asia-india-30408274 (Accessed January 3, 2015); Sunil Khilnani et al., no. 9, p. 52.

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61. Energy Information Administration, no. 52.

62. Ibid.

63. SAARC Energy Centre, no. 57, p. xiii.

64. Sunil Khilnani et al., no. 9, p. 17.

65. Reeta Chowdhari Tremblay, and Julian Schofield, ‘Institutional Causes of the India-Pakistan Rivalry’, in T. V. Paul, no. 34, pp. 225–248.

66. Ashok Swain, ‘South Asia and Its Large Rivers: The Indus, the Mahakali and with Special Emphasis on the Ganges’, in Ashok Swain, Managing Water Conflict: Asia, Africa and the Middle East, Routledge, London and New York, 2004, pp. 43–78; Priyanka Kher, ‘UNCTAD: Regional Value Chains, Background Paper, Political Economy of Regional Integration in South Asia’, No. RVC 5, p. 12, at http://unctad.org/en/PublicationsLibrary/ecidc2013misc1_bp5.pdf (Accessed January 30, 2014).

67. SAARC Energy Centre, no. 57, p. xiv.

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72. ‘Water in Them Hills’, no. 70.

73. SAARC Energy Centre, no. 57, p. xiv.

74. ‘China Raises Nepal Aid 5 Fold to Compete with India’, Times of India, December 26, 2014, at http://timesofindia.indiatimes.com/world/south-asia/China-raises-Nepal-aid-5-fold-to-compete-with-India/articleshow/45652472.cms (Accessed January 3, 2015).

75. ‘Prime Minister’s Speech at 2014 SAARC Summit in Nepal’, November 26, 2014, at http://www.narendramodi.in/text-of-prime-ministers-speech-at-2014-saarc-summit-in-nepal/ (Accessed January 4, 2015).

76. ‘SAARC Charter’, at http://saarc-sec.org/saarc-charter/5/ (Accessed May 2, 2015).

77. Liu Zongyi, no. 31; Shihar Aneez, ‘RPT-Sri Lanka Takes Next Step to Opening Strategic China-Built Port’, Reuters, March 4, 2013, at http://www.reuters.com/article/2013/03/05/srilanka-port-china- idUSL4N0BX1DU20130305 (Accessed December 18, 2014); Emily Brunjes et al., no. 33.

78. ‘SAARC Energy Agreement: What Should Be Next Steps?’, no. 57.

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82. Abdullah Al-Madani, ‘Implications of Afghanistan’s Inclusion in SAARC’, Middle East Transparent, November 20, 2005, at http://www.metransparent.com/old/texts/abdullah_elmadani/abdullah_elmadani_implications_of_afghanistan_inclusion_in_saarc.htm (Accessed December 28, 2014).

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Anna Juhos

Anna Juhos is a Fellow at the Hungarian Institute for Foreign Affairs and Trade (IFAT/HIIA), and since August 2014 she has been working as an Advisor to the Deputy Minister at the Ministry of Foreign Affairs and Trade, Hungary. The views expressed are the author’s own.