Revitalization of commercial ties has become focus of India’s Central Asia policy

Image Courtesy: Wall Street Journal

The July 2015 visit of the Indian Prime Minister Narendra Modi to India’s strategic neighbour Central Asia has been of great significance for reinvigorating the efforts made in recent years towards comprehensive engagement between the two regions. The visit was considered to be vital due to Central Asia being not only as a civilizational but also a geostrategic and economic importance to India. India’s comprehensive engagement with Central Asia is influenced by a number of factors: the first and foremost is the concern that it will provide India a considerable foothold on Central Asia’s natural resources, particularly the hydrocarbon sector; secondly, it will provide India a better opportunity to keep a close watch on drug trafficking in the region; thirdly, it will encourage India’s interests in the Central Asian economy and trade; fourthly, it will help India to gain necessary support for its emerging regional/global power status; and lastly, among other things, it will boost India’s efforts to play a greater role in the Asian regional dynamics.

The economic growth of Central Asia, especially in Kazakhstan, Turkmenistan and Uzbekistan, has given a push to construction boom and development of sectors like IT, pharmaceuticals and tourism, where India is very much required.

The Soviet collapse in 1991 left the entire Central Asian region with economic and security challenges. But these challenges also provided Central Asia with opportunity to become an important strategic region attracting global powers both in the neighbourhood as well as in the ‘extended’ neighbourhood. Consequently, India too came to the forefront and began reviving its age-old ties with Central Asia on a new basis. Since the beginning of the twenty first century the “Look North” policy was envisioned to guard India’s interests in Central Asia. The objectives of this policy included maintaining peace and stability; preventing terrorism; achieving energy security; making the region an integral part of the expanded trade network; establishing mutually beneficial economic ties; working for greater regional cooperation and monitoring drug trafficking. These objectives remained almost constant until a more focused strategy known as “Connect Central Asia” policy was launched.

The “Connect Central Asia” policy was initiated after Central Asia was viewed as part of India’s “extended neighborhood”. The success of India’s economic liberalisation as well as further expansion of India’s economic profile needed it to seek access to the Central Asian market in terms of trade routes and connectivity with the broader Eurasian region. Besides, India’s energy needs required to expand and diversify its present sources of supply. In this perspective, supplies from oil and gas rich Central Asia become crucial for India’s energy. As a result, despite India’s weak economic presence in Central Asia, reformulation of India’s Central Asia policy culminated in introducing the new “Connect Central Asia” policy in June 2012. This policy is based on pro-active political, economic, cultural and people-to–people engagement with all the five Central Asian countries, both individually and collectively. India, thus, embarked on a path for a deep, meaningful and sustained engagement with Central Asia.

The visit of Indian Prime Minister Narendra Modi to the five Central Asian Republics between July 6 and 13, 2015 was of vital importance, particularly in terms of a conscious effort being made by India to harmonize its Central Asia policy with critical economic interests. Analysts have commented positively on the outcomes of Modi’s Central Asia visit. The bilateral agreements signed between India and individual Central Asian Republics point to the fact that Modi’s visit was aimed at (a) securing India’s energy needs; (b) covering all dimensions of ‘Make in India’; (c) cooperation in the field of Agriculture; (d) securing support for permanent seat for India at the UNSC; and (e) countering the Chinese influence in Central Asia. So far as securing India’s energy needs is concerned it was agreed by Kazakhstan that India would get 5000 Metric tons of Uranium during the five year period (2015-19). This would let India to begin operations in many nuclear plants which are currently closed due to lack of fuel.

The economic growth of Central Asia, especially in Kazakhstan, Turkmenistan and Uzbekistan, has given a push to construction boom and development of sectors like IT, pharmaceuticals and tourism, where India is very much required. Even Prime Minister Modi stressed on economic dimension of relationship between the two sides. Since all the five Central Asian Republics want to diversify their foreign relations India’s presence will help them achieve their goals. However, how much success India has achieved in countering the Chinese influence in Central Asia is yet to be seen given the extent of economic and energy cooperation between China and Central Asia. In order to improve India’s connectivity and energy cooperation with Central Asia, India will have to play a pro-active role both bilaterally and through regional cooperative mechanisms. In this regard, India will have to factor both China and Pakistan in addition to its cooperation with Russia, Iran, Turkey and the US. India’s presence in numerous regional forums including the Shanghai Cooperation Organisation (SCO) would further boost India’s renewed linkages with the region.

The post-Modi’s visit period has been witnessing a conducive atmosphere for bilateral discussions to build stable partnerships between India and the five Central Asian Republics. This will also help advance India’s strategic interests and facilitate Indian companies to expand operations in Central Asia. All this is likely to happen as Uzbekistan has agreed to create favorable conditions for investments by Indian companies. A joint Business Council has been formed between India and Kazakhstan, while India and Kyrgyzstan agreed to have annual joint military exercises. Tajikistan has sought India’s engagement in hydro power generation. After Iran’s Chabahar port gets ready, it can become an important entrepôt for trade to and from Central Asia via Afghanistan. There is now little doubt that the revitalization of commercial ties that had linked the Indian subcontinent with Central Asia in times past has once again become the main focus of India’s Central Asia policy.

Profile photo of Dr. Vaishali Krishna
Dr. Vaishali Krishna holds her PhD from School of International Studies, Jawaharlal Nehru University, New Delhi. Currently, she teaches at SOL, Ramanujan College, Delhi University