In his speech at the Shanghai Cooperation Organization (SCO) meet last month, PM Modi stressed on commitment for increasing its connectivity with land-locked Central Asia.

What is the Central Asia Region?

• Central Asia is a region in Asia which stretches from the Caspian Sea in the west to China and Mongolia in the east, and from Afghanistan and Iran in the south to Russia in the north.
• It includes the former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

India-Central Asia Ties

• India has decades-old wish to connect with the resource and fuel-rich Central Asian nations.
• Since the emergence of the Central Asian Republics as independent countries in the early 1990s, New Delhi has been trying to establish ties with them.

Trade and collaboration

• India’s trade with the five Central Asian Republics—Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan—was below $ 2 billion in 2018.
• The potential areas for collaboration include construction, sericulture and pharmaceuticals to IT and tourism.
• Much of this trade was routed through Iran, Russia or the United Arab Emirates (UAE).

Efforts for connectivity

1. Turkmenistan–Afghanistan–Pakistan–India (TAPI) Gas Pipeline
2. Development of Iran’s Chabahar Port
3. Zaranj-Delaram Highway
4. International North-South (Transit) Corridor (INSTC)

About INSTC

• In 2000, India, Iran and Russia agreed on a new route for trade that later came to be known as INSTC.
• It was aimed at cutting the costs and time in moving cargo between Russia and India.
• The pact was ratified in 2002 and the original multi-modal route linked Mumbai in India to Bandar Abbas and Bandar-e-Anzali in Iran, then across the Caspian Sea to Astrakhan, Moscow and St. Petersburg in Russia.
• Over the years, more countries joined the INSTC.
• In 2003, India and Iran announced the development of the Chabahar port in the Sistan-Balochistan province.

China’s opportunism: Based on proximity

• China’s trade with Central Asia was $50 billion-$60 billion in the same period.
• The obvious advantage in China’s favour is geographical proximity.

Hurdles for India

• Lack of mutual trust: Unfortunately, many connectivity options are not open to them today due to the lack of mutual trust.
• Pakistan factor: Tensions with Pakistan mean there is no viable land route towards Central Asia.
• Iran and the US sanctions: Efforts to look for a circuitous route via Iran (and Afghanistan) have stalled due to US sanctions on Iran.

Issues in Iran-Afghanistan bypass route

Recent events acquire broader geopolitical relevance for India in this route:

• Taliban takeover of Afghanistan: The takeover of Afghanistan by the Pakistan-backed Taliban has severely set back India’s plans in Central Asia.
• Iran’s bypassing of India: Iran’s overtures has been clearly visible after itself allocating Farzad-B Gas exploration contract to another company bypassing India.

Central Asia’s importance for India

• Fossil fuels: While Central Asia is seen as fuel-rich and, hence, important for an energy-starved India.
• Mineral richness: Central Asian states are also mineral-rich, and Kazakhstan, for one, has been a source of uranium for India’s nuclear power plants.
• Market for India: A country like India which is seen as a major economy has to have a presence in these markets. INSTC also offers a safe and cost-effective route to the EU (European Union) market.
• Convergence against Terrorism: India can forge a common position on terrorism and radicalization, which is a matter of concern to the region as much as it is to India.

India’s recent engagement

• Defence collaboration: In recent years, New Delhi has engaged with Central Asian Republics in the defence sphere through military exercises (say Ex Kazind).
• Engagement at UN: Political and economic engagement is also important, given the imperatives of working together at a body such as the United Nations (UN).
• Technological ties: India has set up universities there—Sharda and Amity are examples.

Scope for expansion

• Dairy Sector: There is scope for collaboration in the dairy sector.
• Pharma: Indian firms have been setting up pharmaceutical units in Russia that can serve these countries as well.
• Info Technology: IT and IT-enabled services are two other areas.
• Cultural connect: Bollywood movies are quite famous in these countries.

Way forward

• India needs to develop into stronger bonds of trade and commercial bonds which will be possible once the INSTC crystallizes.

Conclusion

• The road ahead in the short term is difficult as India doesn’t seem to have any real leverage to get the connectivity projects with Central Asia going.
• India has been negotiating with individual bilateral partners though.

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