Central Asia

Our close historical links with Central Asia provide an asset for building important relationships with the Republics that emerged in the region following the collapse of the Soviet Union. Central Asia is having ancient relationships with India when as they have always been the land bridge between India and Europe and also have become more important in view of energy security and tackling terrorism in recent times.

After the collapse of the Soviet Union in 1991, five new Central Asian republics emerged as new neighbours to India: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Central Asia’s abundant energy resources and India’s relentless energy needs, combined with India’s aspirations to be a major regional and global player, have been the key driving forces behind India’s growing presence in the region. Central Asia is also important as an avenue for access to Afghanistan, where India wants to be a significant player and blunt Pakistani influence. India’s involvement in Central Asia includes energy ties, trade and investment, and the beginnings of a military relationship.

Central Asia has long been a strategic location merely because of its proximity to several great powers on the Eurasian landmass.

Historically Central Asia has been closely tied to its nomadic people and the Silk Road. As a result, it has acted as a crossroads for the movement of people, goods, and ideas between Europe, West Asia, South Asia, and East Asia. Islam is the religion most common in the Central Asian Republics. Russian, as well as being spoken by around six million ethnic Russians and Ukrainians of Central Asia.

Basic Facts about CARs:

• Population of CARs: 85, 378, 925 (2021 data of World Bank)
• Area of Central Asia: 39, 94,400 Sq.Km.
• India Central Asia Trade: $ 2 billion (2021)
• Central Asia China Trade: $ 100 billion

Potential

• Kazakhstan: Hydrocarbons
• Uzbekistan: Minerals
• Tajikistan: hydro-electric
• Turkmenistan: Natural gas

Central Asian Situation

Russia continues to dominate political decision-making throughout the former SSRs; although, as other countries move into the area, Russia's influence has begun to wane. China has security ties with Central Asian states through the Shanghai Cooperation Organisation (SCO) and conducts energy trade bilaterally. Iran and Turkey due to historical and geographical proximity also have an influential role in the region. India maintains a military base at Farkhor, Tajikistan, and also has extensive military relations with Kazakhstan and Uzbekistan.

Background of India Central Asia Relations

• Relations between India and Central Asia are ancient and civilisational. India has been connected closely with Central Asia through the Silk Route from circa 3rd century BC till the 15th century AD when the sea route from Europe to India was discovered.
• The Silk Route connected India with Central Asia not only for the transportation of goods and wares like silk, textiles, spices etc. but was an effective channel of exchange of thoughts, ideas, religion and philosophy.
• Buddhism travelled over this route from India to Central Asia and from there to West China in the contemporary Xinjiang region.
• In medieval times, Babar came from Fergana Valley after losing his kingdom to try his fortune in foreign lands.
• During the Soviet period culture, music, dance, movies and literature bound the Soviet Republics closely with India.
• Political contacts grew and expanded with frequent exchange of visits. Visit by Pandit Jawaharlal Nehru, the first Prime Minister of India accompanied by his daughter Indira Gandhi to Almaty, Tashkent and Ashgabat in 1955 brought the region closer to India.
• Popularity of iconic Bollywood stars like Raj Kapoor, Nargis, Mithun Chakraborty and others brought India into the homes and hearts of common people of this region.
• Bilateral relations however suffered considerable neglect in the 25 years after the emergence of these countries as independent States in 1991.

SIGNIFICANCE OF CENTRAL ASIA FOR INDIA

Energy Security

• With India projected to become ever more reliant on imported energy, reducing dependence on the Middle East and cultivating alternative sources of energy has become a vital concern.
• Central Asia contains vast hydrocarbon fields both on-shore and off-shore in the Caspian Sea. These are home to an estimated 4 per cent of the world’s natural gas reserves, and approximately 3 per cent of oil reserves.
• Most of these resources are found in Kazakhstan, Turkmenistan, and Uzbekistan, although Tajikistan and Kyrgyzstan also have the potential for generating hydroelectric power.
• Central Asia has reserves of uranium ore plus the potential for its enrichment; so the region could be tapped as a source of uranium for India’s civilian nuclear programme, which would in the long term help diversify its energy base.
• Over the past decade, India’s state-owned Oil and Natural Gas Corporation (ONGC) has sought to invest in Kazakhstan, which has three of the world’s richest oilfields. ONGC acquired sizeable stakes in the Alibekmola and Kurmangazy oilfields in Kazakh-owned areas of the Caspian Sea.
• More recently ONGC attempted to buy a share of US company ConocoPhillips holding in the Kashagan oilfield. However, although the Indian Government has begun investing in oil fields in Central Asia, its policy on how to transport this oil to the Indian market or work out oil swap deals is still evolving.
• Accessing oil and gas from Central Asia remains a major difficulty. Besides connectivity, its prohibitive. Cost is also a major issue of consideration.
• Offer of oil swap deals such as that offered by Turkmenistan is now being thought over. This offer is for oil swap involving Iran and Turkmenistan. Iran does not have enough oil in the northern parts of the country. So, Turkmenistan is offering to give Iran oil from Caspian in the north, expecting it to give India oil in the south.
• Also, the Indian government has been engaged in the 1680 km-long Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

Geostrategic Importance

• The emergence of predominantly Muslim but, in fact, multi-ethnic and multi-religious CARs has added a new strategic dimension to the geopolitics of the whole of Asia and more so, for the countries located in its immediate neighbourhood.
• The geostrategic location of the Central Asian states has made this region extremely pivotal. CARs lie at the crossroads of Russia, the Middle East, South Asia and the Far East. Any geopolitical changes in the region inevitably have significance and impact on several states in the neighbourhood.
• Central Asia lies at the strategic junction between two nuclear powers, Russia and China, and at the interface between Russia and the Islamic world. It shares borders with Afghanistan, which is a major source of spreading religious extremism in the region.
• Central Asia is of great strategic importance to India. Being placed in the middle of the Eurasian Continent, Central Asia is one of the most convenient routes of transit.
• Also, given the Kashmir angle, India cannot be walled off from the political developments which take place in the Central Asian region. Any advance by Islamic extremist groups in the CARs could invigorate similar elements active in Kashmir.

Commercial Interest

• Both India and Central Asia have economic complementarity in terms of resources, manpower and markets. These diverse resources can be pooled for broader regional cooperation in Asia and to realise the potential of both regions fully.
• Central Asia offers a relatively untapped market for Indian consumer goods as consumers in the region have little to choose from highly-priced, imported Western products or cheap but lower-quality Chinese manufactured goods that have flooded the region.
• Indian tea and pharmaceutical industries have already acquired a foothold in the Central Asian market. The potential for Indian investment and expertise in the areas of IT, banking, construction, and food processing is still untapped.
• There is also scope for India to assist Central Asian states in developing small and medium-scale enterprises.
• The Central Asian republics have rich natural resources in form of huge hydrocarbon resources, a large amount of mineral deposits, extensive hydel power potential and vast stretches of arable lands, to fulfil the demands of the growing Indian economy.
• Currently, India provides limited assistance in some of these areas as part of its long-running ITEC (Indian Technical and Economic Cooperation) Programme.
• In recent years, the Indian Government has also begun to assist Indian entrepreneurs and business chambers to organise trade fairs under its CIS programme, and a joint business council has been set up with Kazakhstan.
• On his April 2013 visit to Tajikistan, India’s Vice President signed deals to expand bilateral cooperation in IT, energy, health, education, trade, commerce, mining, and agriculture, while there are also plans to collaborate with Tajikistan in establishing an IT centre of excellence and a Central Asia e-network. The government is focusing on connectivity to boost the trade and investment scenario in this region. Land route options through Iran and Turkmenistan are also being explored.
• Three party agreement on the international transit of goods between Turkmenistan, India and Iran signed in February 1997 at Tehran is still critical as it would enable the movement of goods from Indian ports to Bandar Abbas in Iran and then on to the Central Asian region by road and rail.
• New Delhi, Moscow and Teheran signed an agreement in September 2000 for sending Indian cargo to Russia through a corridor known as International North-South Transport Corridor (INSTC).

Geopolitical Interest

• Another point that needs to be highlighted here is that today the Central Asian region has become an area of immense importance to Europe, the US, China, and Iran.
• The US is trying to undermine Russian and Iranian gains; China has committed billions of dollars for the development of Central Asian oilfields to fulfil its future energy demands.
• Europe wants to extend its influence by means of NATO expansion. All this is likely to bring in high-stakes power politics in Central Asia.
• India’s ability to access Central Asia is vulnerable because Pakistan’s geography – and at times its deliberate policy of obstruction – cuts India off from the region.
• This obviously has implications for India and it must consider ways for its strong and rooted presence in the region though with utmost caution.
• Equally significant in geopolitical terms – though very different in terms of history and future outlook – is India’s relationship with China. China’s long land border with the Central Asian states and its massive economic muscle gives it considerable leverage in the region.
• China has outpaced India throughout Central Asia in terms of volumes of trade and investment, energy acquisitions, and the building of transport and infrastructure networks.

India’s Policy Initiatives

India is now looking intently at the region through the framework of its ‘Connect Central Asia’ policy, which is based on pro-active political, economic and people-to-people engagement with Central Asian countries, both individually and collectively. The main focus areas are:

• Strong political relations through the exchange of high-level visits
• Strategic and security cooperation: focus will be military training, joint research, counter-terrorism coordination and close consultations on Afghanistan.
• Multilateral engagement with Central Asian partners using the synergy of joint efforts through existing fora like the SCO, Eurasian Economic Community (EEC) and the Custom Union
• Long-term partnership in energy, and natural resources. Central Asia possesses large cultivable tracts of land and we see the potential for India to cooperate in the production of profitable crops with value addition
• Setting up a Central Asian e-network with its hub in India, to deliver, tele-education and telemedicine connectivity, linking all five Central Asian States.
• Reactivation of the International North-South Transport Corridor (INSTC)
• Improve air connectivity between India and CAR countries.
• A cooperative approach for embedding Afghanistan into a more meaningful regional economic and security framework would have benefits for the entire region. One way is to work towards converting Afghanistan into a hub for trade and energy, connecting Central and South Asia. The landmark agreement for the construction of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline has put the spotlight on the importance of Central Asia for India's future energy plans. It would also greatly benefit Afghanistan.
• The big challenge that remains unresolved, however, is how to get Central Asian energy resources to the Indian market. India faces some natural obstacles like limited land connectivity and the limited size of the Central Asian markets. Kazakhstan has the largest oil resources in the region, with three of the world’s richest hydrocarbon fields. ONGC Videsh already has a 15 per cent ownership stake in Kazakhstan’s Alibekmola oil field and has announced a $1.5 billion investment in the joint Russian-Kazakh Kurmangazy oil field in the Caspian Sea.
• Additionally, Kazakhstan has offered India rights to develop the Karzahanbas oil field. ONGC Videsh has also expressed an interest in investing heavily in Uzbekistan’s oil and natural gas fields.
• India is also actively looking into importing gas from Turkmenistan via a potential Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. Turkmenistan is sending most of its gas out via pipelines through Russia and has been unwilling thus far to provide the long-term supply commitments needed to finance a new pipeline.
• Export of electricity to India has also been under discussion. Tajikistan and Kyrgyzstan have developed only a relatively low percentage of their potential hydro-generating capacity. Their period of surplus production is in the summer, typically a time of unmet demand in northern India. Moving electricity to India would require a substantial investment in new dams and generating plants, as well as new transmission lines going through Afghanistan and Pakistan, with the same security problems as for the Turkmenistan pipeline. It would also involve complicated price negotiations.
• Central Asian countries could also gain from the techno-economic- the potential of India, which could be accessed in cooperative, mutually beneficial partnerships. Central Asia’s desire for diversifying hydro-power and energy export routes would correspond with India's quest for diversifying imports. India will be keen to invest in setting up downstream production facilities, instead of exporting raw materials out of the region through expensive pipelines. The approach could differ from those seeking exclusively to pump out Central Asia's riches.

Three “sustained” policies on Central Asian republics have paid off India handsomely after September 11, 2001. These are:

• Multi-ethnic people-to-people contacts.
• Opposition to jihadi terrorism spawned by fundamentalist forces.
• Political and diplomatic support to Tajikistan, Uzbekistan, Kyrgystan and the erstwhile Northern Alliance.

Connectivity is the key

Lacking direct access to the CAR and with its difficult relations with Pakistan, India‘s major initiative has been cooperation in building a North-South trade corridor.

International North-South Transport Corridor (INSTC): Russia, Iran and India are founding members of the International North-South Transport Corridor (INSTC). Many other countries, including Belarus, Kazakhstan, Tajikistan, Oman, Armenia, Azerbaijan, Syria, Bulgaria, Ukraine, Turkey, and Kyrgyzstan, have joined the project.

• This corridor establishes a transit link for the European countries and Russia to the Indian Ocean, Persian Gulf and Southeast Asian states.
• This is a trade connection for goods in transit between European countries and northern Europe, the Scandinavian region and Russia through the ports of Amsterdam, Hamburg, Copenhagen, Stockholm and Helsinki in Europe to St. Petersburg and Moscow in Russia.
• It can also extend to the southern ports of the Caspian Sea (Anzali and Amirabad) and to Central Asia through Russian ports on the north of the Caspian Sea and can continue to Iran, the Persian Gulf, and Indian Ocean countries to Southeast Asia.
• There is also a land connection through Azerbaijan between Russia and Iran. Compared to the long and costly existing sea transport routes, this route with its important section passing through Iranian territory is faster and cheaper than the other routes, such as the Suez Canal.
• The route links the Indian Ocean (Mumbai port) with Bandar Abbas in southern Iran through maritime transport. Goods will be shipped from Bandar Abbas to northern Iranian ports on the Caspian Sea (Bandar Anzali and Bandar Amirabad) through roads and railway and then will be dispatched to Astrakhan and Lagan ports in Russia.

China factor in India-Central Asia relations

• China's increasing presence in the region
• Central Asian Republics are enthusiastic supporters of China's Belt and Road Initiative (BRI)
• After the independence of Kazakhstan, Kyrgyzstan, and Tajikistan, China moved quickly to settle its borders with these countries
• The importance of Central Asia for its energy needs has increased for China in the wake of the South China Sea dispute
• Central Asia is important for China for the security and stability in Xinjiang
• China's trade with Central Asia is approx. $100 billion against India's only $2 billion

India-Central Asia Summit 2022

• Held in January 2022
• The main areas/points emphasized/agreed upon are

1. connectivity
2. trade and commerce
3. investment
4. proposal to include Chabahar port of Iran and Turkmenbashi port of Turkmenistan within the framework of INSTC
5. connectivity initiatives should be based on the principles of transparency, broad participation, local priorities, financial sustainability, respect for sovereignty and territorial integrity
6. to establish cooperation between specialized national institutions, including in the fields of finance, renewable energy, information, digital and other advanced technologies
7. proposal to create an India-Central Asia Investment Club to promote investment opportunities in the each other

Future

• India’s Connect Central Asia Policy will be consonant with our overall policy of deepening engagement in Eurasia, our policy of strengthening relations with China, with Pakistan, and building on our traditional relationship with Russia. We hope that our membership in numerous regional forums including at the SCO would bolster India's renewed linkages with the region.
• Collectively, we must also think about creating a cooperative security structure for maintaining peace in Asia. Our policy of peaceful coexistence and of playing a constructive and meaningful role in the United Nations (now also as a non-permanent member of the UN Security Council) will drive us to work with a deep sense of responsibility on all global issues. India's engagement in Central Asia, therefore, must be seen in the context of a quest for a world order which is multi-polar.

Ashgabat agreement

Ashgabat, known as Poltoratsk between 1919 and 1927, is the capital and the largest city of Turkmenistan in Central Asia, situated between the Karakum Desert and the Kopet Dag mountain range. The Ashgabat Agreement, which aims to develop the shortest trade route between Central Asian countries and Iranian and Omani ports, was initially signed among Uzbekistan, Turkmenistan, Iran, Oman and Qatar back in April 2011 and was given additional support in 2014 when a Memorandum of Understanding was signed. Whilst Oman called for early completion of basic technical requirements so that the corridor can be operational by 2015, Qatar withdrew from the agreement in 2013. However, Kazakhstan promised to join instead, which will increase the project’s significance and extend it further into Central Asia.

The Iran-Turkmenistan-Kazakhstan (ITK) railway line will be the major route according to the Ashgabat Agreement, which became operational in December 2014 and was also included as part of the India-funded North-South International Transport Corridor (NSITC).

The Union Cabinet has given its approval for India to accede to the Ashgabat Agreement, an international transport and transit corridor facilitating the transportation of goods between Central Asia and the Persian Gulf.

Eurasian Economic Union

• It is an economic union which is planned to be established by a treaty signed on 29 May 2014 between the leaders of Belarus, Kazakhstan, and Russia after ratification by the respective parliaments.
• The Eurasian Economic Union would create a single economic market of 171 million people and a gross domestic product of 3 trillion U.S. dollars. The republics of Armenia, Kyrgyzstan and Tajikistan have also expressed interest in joining the organization
• In 1999 Belarus, Kazakhstan, Russia, Kyrgyzstan and Tajikistan signed the Treaty on the Customs Union and the Single Economic Space by clarifying the goals and policies the states would undertake in order to form the Eurasian Customs Union and the Single Economic Space.

Way Forward

• Russia, China and Iran are increasing their footprints in Central Asia through investments and multilateral cooperation. India needs to leverage its relationship with these countries, especially Russia and Iran, to increase its presence in this region.
• India should set up Central Asia Forum (Similar to India – Africa Forum) to deal with the region in a holistic fashion. Growing bonhomie with the USA may antagonize Russia and China, which will not help Indian interest in this region.
• We need to explore the Ladakh – Xinxiang axis to increase the connectivity between India and Central Asia. Not only will it help India to bypass the unstable Afghanistan-Pak belt, but it would also lead to greater synergy between India and China.
• India needs to deliver on its commitment in a time-bound manner. It will help in changing the attitude of these countries towards India. Indian government should promote the private players to play a more active role in this region by establishing joint ventures. Also, Indian Trade Promotion Organization (ITPO) needs to pay more attention to this region to increase the visibility of Indian goods and services.
• Agriculture and food processing is another area of cooperation which has not been explored yet. Greater information about each other would help in boosting tourism between India and CAR. There is a need to increase research on the region in Indian educational institutions, besides giving training in regional languages to students and researchers.
• India can help this region with its Space technology and can work to have a dedicated satellite for the region’s media networks.