India-Pakistan talks: Oil trade could gain from Confidence Building Measures

NEW DELHI: Supply of petroleum products and electricity from India to Pakistan could form part of Confidence Building Measures, as Prime Ministers Narendra Modi and Nawaz Sharif embark on yet another journey to improve the troubled relations between the neighbours.

When Sharif visited Delhi in May 2014 for the swearing in ceremony of Modi, the two PMs had discussed the possibility of a pipeline from the Indian state of Punjab to transport hydrocarbon across the border, besides supplying electricity. The proposals didn’t materialise amid the highs and lows in the bilateral relationship.

Now, following the decision to resume the Composite Dialogue, or Comprehensive Bilateral Dialogue, the issues are expected to be on the table when Indian and Pak foreign secretaries meet in Islamabad on January 14-15 to finalise the modalities of the dialogue, which also covers commercial matters, officials said. Pakistan had responded positively to the Indian proposal for gas and product pipelines to the country, officials said.

The proposal, however, has not seen the light of the day yet, ostensibly at the behest of Pakistan’s army, which fears that India might stop supplies in case of a conflict, experts said. The proposal was that gas would be first imported to an LNG terminal at Dahej in Gujarat.

From there, it would be transported along the existing pipeline network to Jalandhar, which would become the transit hub for Pakistan, connected by a new 103-km pipeline that state-run GAIL India plans to build.