Last April, commenting on the project of the extension of the Iran-India-Pakistan gas pipeline to China, China's Ambassador to India, Sun Yuxi said that "Beijing doesn't have any political problem with it, finding it a very good idea." Mr Yuxi's words were echoed by India's Minister of State for Planning, M.V. Rajashekharan, according to whom, "Once the gas comes to India, the pipeline can be extended to China." These statements, made on the sidelines of a seminar on achievements of the Chinese Premier Wen Jiabao's recent visit to India, should be viewed in a context of growing cooperation between the two giants, whose trade is expected to reach $50 billion by 2010 and whose rapidly growing economies face growing energy supply problems. The Asia-Pacific energy demand nears one third of total world demand, with India and China leading the pack. Though the economic growth rates of China and India diverge, their energy-consumption growth is nearly identical, and both are dependent on imports. As far as India is concerned, its energy sector is mainly dependent on coal; imported oil products (together with a minor quantity of other energy resources, including nuclear and renewable resources) were introduced as an alternative to coal. Though natural gas is India's most important potential alternative to coal, the effective exploration and distribution infrastructure is far from being fully developed. Thus, oil becomes a key-asset, being India's main foreign energy source. Estimates indicate that oil imports to India will meet 75 percent of the need for consumption in 2006. As India imports its energy mainly from the unstable Middle East, its supply of energy resources is essentially precarious - a major national security issue. Compared to India, China has been far more successful in diversifying its energy resources, as well as developing a network of energy suppliers that alongside the Middle East includes Russia and the Central Asian republics. One main reason for this difference lies in geography: India's position does not provide an opportunity to tap these sources. Hence, the gigantic Indian-owned ONGC (Oil and Natural Gas Company) project of an "Energy Highway": a Russia-China-India pipeline, stretching from Russia through Turkmenistan, Uzbekistan and Kazakhstan, to Chinese Xinjiang, entering India via Ladakh, crossing the Siachen glaciers and the India-China portion of the militarized Line of Control to supply gas to Northern India. While appealing to India, this idea is unlikely to find favour with the Chinese government, having little incentive to accommodate a rival in this matter. Along comes the Iran-India-China pipeline project which, from New Delhi's view, aims to soften China's opposition to the "Energy Highway", compensating Beijing for the diversion of a precious share of Russian oil with a new energy corridor. The new pipeline would run from Iran to the northwest coast of India, through Pakistan's coastal area. Pakistan has recently dropped its initial opposition to the plan, but its reticence points to India's two-fold dilemma. The first is geographical: India is the most remote from the energy sources and hence is most dependent on its neighbours to act as intermediaries. Energy policy is contingent upon diplomacy in a way that it is not for the other countries. The second is political: with all the actors involved (Russia's Gazprom has recently proclaimed interest), the project remains India's baby; it is its greatest bid yet for regional prestige since its nuclear demonstration and it serves as notice that India will enter the global energy game. India remains the fulcrum of the project, having the most to gain. Consequently, India has the most difficult task of keeping all the elements in balance. To wit, the US, whose support is crucial for India's civilian nuclear program has expressed great displeasure with the pipeline and demanded India's support for the resolution condemning Iran at the International Atomic Energy Agency; this in turn prompted talk of retaliation by Tehran. Thus, while the project remains on, its realization will represent the greatest test yet for Indian diplomacy. Copyright: Heartland/ Partner of Limes - Italian Journal of Geopolitics