Long-standing historical, cultural, political, and economic ties between India and Central Asia have evolved into a solid, experienced, and transformative connection over time. In light of the COVID-19 epidemic and the shifting global order, India’s proximity to and growing convergence on concerns with the five Central Asian nations of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan has led to increased collaboration on these issues. The two sides have simultaneously intensified their discussions and cooperation on issues like trade and connectivity, economic development, energy security, regional concerns of shared interest, and the shared geopolitical worries of both sides regarding new challenges in Afghanistan.
Trade significantly impacts India’s relationships and influence in the Central Asian Region. India’s trade with Central Asian countries helps to foster economic ties and strengthens political and culturial relations. India’s imports from the area, such as oil, gas, and minerals, provide the country with access to critical resources. In contrast, its exports, such as textiles and agricultural products, give the region market access.
Geostrategic Importance of the Central Asian Region
Central Asia is strategically important due to the location at the crossroads of Asia and Europe, making it a critical link between the two continents. The Region also has significant energy reserves, including oil, natural gas, and coal, making it a substantial energy supplier to Europe and Asia. Central Asia is also home to several major transportation and communication networks, including the historic Silk Road, connecting the Region to the rest of the world and making it a hub for trade and commerce. The Region’s proximity to several regional and global powers, such as Russia, China, and India, further highlights its strategic importance.
Central Asia is strategically located in the middle of both Asia and Eurasia. It connects Asia and Europe as a bridge between Eastern and Western nations. Central Asia’s importance is acknowledged due to its geopolitical, geoeconomic, and geostrategic position. The Central Asian states have historically been a centre of trade, rivalry, and warfare due to geography. It now serves as a bridge connecting North and South and East and West. In addition to its strategic location, the Central Asian Region is also seen by outsiders as the new global geopolitical and economic battleground. Over 2000 years of conflict have been etched into its history as the past great empires struggled to control the Silk Route, the vital trade route between Europe and Asia.
India’s Policy for growing its potential in the Central Asian Region
India’s trade with Central Asia also has the potential to help balance China’s growing economic influence in the Region. India has been actively pursuing a policy of economic engagement with Central Asian countries and working to increase investment, trade and energy ties with these countries. Several factors, including energy security, access to raw materials, and regional economic integration, have driven India’s engagement with the Region. India has made efforts to increase trade and investment flows with the Central Asian countries, which includes establishing trade agreements and participating in regional economic forums. Regional politics, competition with other major powers such as China, and regional security have also influenced the trade relationship. By engaging in trade with Central Asia, India can tap into the Region’s resources, enhance its economic footprint, and contribute to regional stability and prosperity. Drug trafficking, fundamentalism, and religious extremism threaten the strength of these communities and the wider area. Water, security, environmental, and immigration issues have all become urgent. The Region is threatened by more recent acts of narcoterrorism coming from Afghanistan. Russia, China, the U.S., Turkey, Iran, Europe, the E.U., Japan, Pakistan, India, and Afghanistan are all claimed to have significant economic and security interests in the Region, making the area a “theatre of the great game” where this and other conflicts are being played out. A significant obstacle to fostering and growing ties is that India still needs to have a shared land border with any of these states. Direct travel from Pakistan to either Afghanistan or Central Asia is prohibited. Thus, China is the transit country for time- and money-consuming land trade. India has made significant headway towards enhancing connectivity by signing a security cooperation agreement for the refurbishment of Chabahar port, the creation of the International North-South Transport Corridor (INSTC), and accession to the Ashgabat Agreement. This gap is expected to be closed by India’s involvement in both the Eurasian Economic Union (EEU) and the Shanghai Cooperation Organization (SCO).
The India-Central Asia Summit was presided over by Indian Prime Minister Narendra Modi in January 2022 in the presence of all five Central Asian heads of state. The online meeting showed India’s dedication to its “Extended Neighborhood Policy”, which mandates that New Delhi diversify its geopolitical allies and diplomatic objectives, as well as its readiness to cooperate with its Central Asian partners on several fronts.
Overall, trade helps to position India as an essential player in the Central Asian Region and contributes to its regional and global significance. More interaction is anticipated to enhance regional economic growth and mutual security. Economically, Central Asia offers India’s industry a “near abroad” market, overland links to the Middle East’s and Russia’s rich resources, and considerable energy supplies at comparatively close ranges. Suez and the Mediterranean Sea are both shorter than the INSTC corridor route. This Region is projected to become more significant as competition with China for resources increases.
The increased trade can also help India to reduce its dependence on other areas for energy supplies and increase its bargaining power in the global market. It aimed at improving the flow of goods, services and investment between the two regions and also to tapping into the vast energy resources of Central Asia. Additionally, more significant business can lead to infrastructure development and job creation, thereby improving the economic conditions in both regions. However, it also faces challenges such as competition from other countries and the need for a well-developed transport and communication network in the area.
