The proposal for building a gas pipeline from Iran to Indian through Pakistan has been going on for sometime. There has also been another proposal to build a pipeline from Western India to Pakistan to carry diesel. The rationale behind these pipelines is that nations who do business with each other will refrain from going to war.
Finally, history shows that nations that do serious business with each other seldom go to war, even when they’re ideologically far apart. The best example of this is the US and China, which share huge investment and trade ties, but have vastly different political ideologies. While India and Pakistan work on the energy pipes, they should also negotiate free trade between themselves, build expressways across the border and open up each other’s sky and sea lanes to people and freight. Economic engagement pays a double dividend: We get lasting peace across our borders, and everybody gets richer.[Peace Pipes]
But this is a very risky proposition at this point as the Pakistani rhetoric is increasing day by day as if they will suffocate if they do not separate Kashmir valley from India. The Pakistani Prime Minister has even stated that the fate of the pipeline is linked to Kashmir. So long as Pakistan sticks to its Olive Trees, it is better for India to put the proposal on a slow burner.
The stand of pakistan is detrimental to Indian and pakistani economy but it effects countries like Iran and central asian nations who were going to sell the gas through the pipeline.
The gas producers(Iran) and buyers (India) should try to explore some other arrangement for transportation of gas like tankers or underwater pipeline. This would cut out the middle party (pakistan) and also assure future saftey of the supply.