The longer the price of oil remains depressed, India, like other major oil importers, will not only increase its dependence on crude imports, but it will also become more dependent on OPEC.
India needs to capitalise on the emerging Iranian gas supply market and the current low price scenario, before rival consumers snap up Iranian exports or prices go up. Developing broader relations that entail incorporating gas supplies from Iran would give India greater leverage at a time when other countries in South Asia are emerging as key gas importers.
Often criticised as an obstructionist or stubborn negotiator, India now holds considerable credibility as a leader when it comes to climate change related pledges.
This fresh move on the Indian Prime Minister’s part is perhaps meant to signal to Pakistan that if the latter continues with its hostilities and political rhetoric towards India, then India and other countries may consider an alternative arrangement.
Kautilya argues that when the treasury gets depleted, concerted efforts become necessary for its replenishment and even recommends extraordinary measures in emergency situations. But the guiding principle should be what the people consider as beneficial to themselves.
The possible lifting of the sanctions on Iran will lead to a rush for a share of the lucrative Iranian energy pie similar to Myanmar’s opening up last year. India cannot afford to be left behind.
Signing of the SAARC agreement is merely the first step in the process of regional energy cooperation. To make this initiative work, governments in the region need to synchronise their efforts on a range of technical, institutional and political issues.
What does lower oil prices mean for India?
The longer the price of oil remains depressed, India, like other major oil importers, will not only increase its dependence on crude imports, but it will also become more dependent on OPEC.