The Big Picture: India’s World – Energy Diplomacy and Sino-Indian Relations

Away from the arc lights that accompanies China’s OBOR project, India has been quietly working on creating connectivity grids in its neighbourhood and moving beyond physical connectivity to energy as a tool of connectivity. From Indonesia to Mauritius, India is working on a web of energy relationships that seeks to leverage India’s position as a big source of petroleum products, sharing of technology and building interdependencies.

Mauritius, one of India’s closest partners in Indian Ocean Region could become a hub for petroleum storage and bunkering for which India has started building infrastructure. India already supplies petroleum products to Mauritius from Mangalore refineries as well as being a retail player in that country. As a petroleum hub, Mauritius can secure its own energy supplies while India can use it to market in other parts of Africa. On the other side of the Indian Ocean, India and Indonesia are beginning an energy relationship. Indonesia is one of the world’s bigger sources of hydrocarbons and has been in and out of OPEC.

Analysis:

India is growing at a rate of 7-8% and therefore, it has to be ensured that energy consumption keeps pace. If it does not, the growth might be affected such as the coal sector that could not keep up the pace. So energy security is a part of the country’s security development and positioning. India and China at present provide the world’s biggest appetite for energy as both are growing in economy as well as population.

Irrespective of what these two countries plan ahead, a bulk of energy requirements of these countries is going to be met from resources which are lying outside both the countries such as oil related resources. Internally, electricity is the area where India and China can do much better. China is better in terms of installed capacity of electricity in the country and India is 3rd in terms of installed capacity.

Some Facts:

  1. China takes almost 80 per cent of Myanmar’s gas through a pipeline deal struck between both the countries few years back. India has been supplying diesel to Myanmar from the Numaligarh refinery in Assam. India is also seriously considering building an LNG terminal in Sittwe which would be used to provide energy products to Myanmar, and, once the Kaladan multi-modal transport project is complete, it can also be used to supply LNG to Mizoram.
  2. India’s new energy relationships are because of its Act East policy with eastern neighbors. This is because the west is largely inaccessible due to India’s problems with Pakistan. Therefore, India is working on building LNG terminals in Ennore, Vizag/Kakinada and Dhamra on the east coast.
  3. There is a new project by India to build floating storage and regasification units (FSRU) for Indonesia to help it supply energy to the thousands of islands in the country. India is asking Indonesia to supply LNG kits for Indian transport vehicles.
  4. India plans to help Bangladesh in syncing gas grids to supplying diesel (to Parbatipur), building pipelines and gas-based power plants. Bangladesh is allowing India to use transit facilities and even the Bangladesh grid to supply to India’s northeast. India is working on building a 7.5 mmt LNG terminal in Qutubdi island off Bangladesh’s coast
  5. As part of BBIN, there is an electricity sharing MOU between India, Bangladesh Bhutan and Nepal which could allow Bangladesh to source power from Bhutan or Nepal once the Himalayan country can get its act together to build more hydropower projects.

Conclusion:

The problem comes in the form of quick delivery and implementation of these projects because China is much more robust in completing its projects on time.

India’s energy security and climate change challenges are intertwined quite symbiotically. Clean energy transformation is as important as securing energy supplies and has to be mainstreamed in conventional energy diplomacy. Diplomatic persuasion would be critical to ensure that India is able to access cutting-edge energy technologies to fulfil INDC targets and commitment to UN SDGs.

Source : http://www.insightsonindia.com/2017/07/06/big-picture-indias-world-energy-diplomacy-sino-indian-relations/

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