Public Diplomacy Public Diplomacy

Khurshid’s visit to Baghdad to revive India-Iraq ties

June 13, 2013

By Archis Mohan

India, along with the US, was the largest importer of Iraqi crude oil in 2012. Last year, Indian oil refineries purchased as much as 19 per cent of Iraqi crude production, making Iraq the second largest supplier of crude to India.

That Iraq has displaced Iran as the second biggest supplier of crude oil to an energy hungry India is a fact. But to look at India-Iraq or India-Iran relations merely through the prism of New Delhi’s energy needs is a myopic perspective that fortunately South Block may finally be redressing.

External affairs minister Salman Khurshid is scheduled to be in Baghdad for a two day visit on June 19 and 20. The minister’s visit, it should be hoped, will mark the revival of close India-Iraq relations which the second Gulf War of 2003 disrupted.

India and Iraq have a Joint Commission for Economic and Technical Cooperation that would meet routinely before the second Gulf War. However, it last met in 2007 – evidence that India-Iraq relations have remained ignored over the past decade. Khurshid is likely to revive the mechanism and bring a semblance of vigour in India-Iraq ties.

India’s energy needs will be an important part of Khurshid’s agenda but the two share a common vision of a peaceful West Asia, source of much of India’s energy needs and the remittances that the nearly six million Indians working in the region send back home annually.

In the immediate future, India is looking at increasing its import of Iraqi crude and a senior minister in the Iraqi government has offered to up his country’s oil exports to India by as much as 30 per cent. That Indian oil companies shifted from Iranian to Iraqi oil in 2011-12 to evade the US and European Union economic sanctions is true but only partially.

The fact of the matter is that India, if it has to grow at 8% annually and pull millions of its people out of poverty, needs energy and may need to go to the ends of the earth to satisfy its thirst.

Iraq which is trying to increase its oil production after years of civil war and disturbances needs investments to repair its infrastructure, and who better than Indian public and private sector with decades of experience of having worked in Iraq in the 1970s and 80s to provide necessary technical and manpower assistance. Common Iraqis continue to respect Indian companies for the work carried out then.

That Iraq has replaced Iran may be a simplistic way to look at the situation. Khurshid was in Tehran in the first of week of May. For India and Iran need each other both for economic and strategic reasons. India, which has built the highway between Zaranj and Delaram has also committed to help Iran build the port of Chabahar and a railway line.

Therefore, there is much that India is and can contribute and gain, both strategically and economically, in West Asia particularly now as clouds of conflict recede. The situation in Afghanistan post 2014 remains a matter of concern equally for New Delhi, Tehran and Baghdad. The latter two are not the arch enemies that they once were as Tehran during the past decade supported much of the anti-Saddam Hussein Iraqi leadership. Interestingly, Khurshid’s Baghdad visit takes place a week before the India-US strategic dialogue at the foreign ministers’ level in New Delhi.

Energy and revival of economic links will top Khurshid’s agenda during his visit to Iraq. The US Energy Information Administration has estimated that India and the US were the topmost destinations for Iraq’s crude oil exports in 2012, with both importing 19 per cent each of Iraq’s oil production. Iraq exported 13 per cent of its crude to China in 2012.

Iraq has the fifth largest proven reserves of petroleum in the world, after Saudi Arabia, Venezuela, Canada and Iran. But infrastructural problems because of years of sanctions and civil war have meant Iraq is far away from developing its known oil fields. Iraqis estimate investments of $30 billion are needed if their country is to reach optimum production targets.

Iraq wants Indian investments in oil exploration, refinery and other sectors. It hopes to increase its oil production and exports which would finance its development activities. Many Indian companies have plans to invest in Iraq.

Reliance Industries Limited (RIL), along with six other global firms, was recently short-listed for development of the multi-billion-dollar Nasiriya oilfield project. Jindal SAW Ltd. has won a $198 million contract to build and operate a factory for manufacturing oil and gas pipeline in Southern Iraq. Several other Indian companies have also invested and more are likely once the internal situation in Iraq improves.

India and Iraq have historical ties that date back two millennia. In recent times, India opposed both the first and second Gulf Wars against Iraq. The 2003 US invasion of Iraq disrupted India-Iraq economic relationship.

But India was quick to rebuild bridges when in 2005 Prime Minister Manmohan Singh sent his special envoy Chinmaya R. Gharekhan to Baghdad to meet the leaders of the new Iraqi regime. India also pledged US$10 million to the International Reconstruction Fund Facility for Iraq (IRFFI) and an additional US$20 million through the United Nations.

Annually, nearly 120 Iraqi officials are trained in India under the Indian Technical and Economic Cooperation (ITEC) programme and 55 Iraqi students pursue higher studies in India under the ‘Cultural Exchange Programme Scholarship Scheme’ (CEP) and the ‘General Cultural Scholarship Scheme’ (GCSS) organized by the Indian Council of Cultural Relations (ICCR). The Indian Oil Corporation Limited (IOC) has been imparting training in India to the Iraqi oil officials.

People to people contacts between the two countries have revived in recent years with most wealthy Iraqis turning to India for medical treatment. Air connectivity has improved in recent years. According to estimates, at least 60 Iraqis land in India every day specifically for medical treatment.

Khurshid’s visit to Iraq comes at a time when there is a need to revive and restore close India-Iraq ties, which would prove beneficial both economically and strategically to Baghdad and New Delhi.

(The views expressed above are the personal views of the writer)

Read more:
Baghdad beckons: India poised to galvanise ties with Iraq

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