PM's pipeline remarks put another project in doubt

New Delhi
29 July 2005

Prime Minister Manmohan Singh's recent remarks about the India-
Iran gas pipeline via Pakistan seem to have cast a shadow over another project, the
North-South International Transport Corridor, which promises a cheaper and quicker
transit link between Europe and Asia.

Iran, which is hardselling the concept to other countries in the region, maintains that the
project is "on" for now although there is a need for India to play a more proactive role.
"India needs to be more active," it said as the gas pipeline and the transport corridor
were "at the core" of India-Iran relations.

Officials from Iran, India and other member-countries are expected to meet in India later
this year as part of their annual consultations to negotiate, among other things, the
technical and commercial aspects of the project. "We are negotiating to relax customs
regulations among participating countries," officials observed.

Iran has completed certain phases of the project and already some volume of trade is
being conducted with CIS countries. Iran, which feels the new route via Iran is not
familiar with Indian businesses, is keen that discussions on insurance and customs
regulations take place at the earliest.

The corridor via Iran is seen as an important link between Europe and Asia for transit
goods. It would link India with Europe and CIS countries via the Persian Gulf and the
Caspian Sea and offer Indian merchants greater access to the markets in the region. Iran
has already invested in ports and railroad.

The agreement of this corridor was signed between Iran, Russia and India in 2000. They
were later joined by Belarus, Kazakhstan, Tajikistan, Oman, Armenia, Azerbaijan and
Syria. Bulgaria, Ukraine, Turkey and Kyrgyzstan have shown interest in participating in
the project.

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