CPC - Caspian Policy Center


india holds first-ever central asia summit

India Holds First-Ever Central Asia Summit

Author:Dante Schulz

Feb 8, 2022

Image source: PIB

India is proving to be a viable ally for Central Asia looking to diversify its partnerships. On January 27, Indian Prime Minister Narendra Modi welcomed the five presidents of the Central Asian republics to the first-ever India-Central Asia Summit, held in a virtual format due to the ongoing COVID-19 pandemic. The summit witnessed numerous MoU signings, commitments to expand dialogue at the ministerial level, and guarantees to promote trade and investment cooperation between India and the region. The India-Central Asia summit was held just two days after the Virtual Summit to Commemorate the 30th Anniversary of Diplomatic Relations between China and the Central Asian countries, highlighting India’s eagerness to compete with China in the region by proving itself as a valuable trade and investment partner for the region.

India was among the first countries to establish relations with the Central Asian states due to its privileged relationship with Moscow during the Soviet period. New Delhi hoped to rekindle its relationship with the region by establishing itself as a diplomatic powerhouse in Central Asia. Nevertheless, its trade and investment portfolio in Central Asia has stagnated while Chinese involvement has skyrocketed. India has instead appeared on the periphery of the Central Asia geopolitical game. Modi hopes to rectify this by reinforcing the India-Central Asia relationship with enhanced overland transit routes, an inflow of investment, and stronger security cooperation.

In 2012, India launched the Connect Central Asia Policy, which was followed by a series of visits from Prime Minister Modi to the region. Furthermore, India gained membership in the Shanghai Cooperation Organization (SCO) in 2017, which allows it to influence regional security discussions.

A major barrier to Central Asian-Indian relations is the lack of overland transit routes connecting the two. Pakistan has denied India its transit trade, making any direct connection with the region unattainable. New Delhi has also considered utilizing the International North-South Transport Corridor to access Central Asia but the 4,473-mile-long route linking Russia to Iran via Central Asia is not yet fully operational.

The most promising route to Central Asia lies through Iran’s Chabahar Port. Chabahar is Iran’s only deep-sea port with direct access to the Gulf of Oman and is within close proximity of Afghanistan, Pakistan, and India. In 2016, Prime Minister Modi announced that India would invest $500 million to develop the Chabahar Port, underscoring New Delhi’s desire to solidify trade networks extending to West- and Central Asia. India is developing two terminals at the port, which it would operate for ten years, according to the agreement signed with Iran. The port was spared from U.S. sanctions against Iran, suggesting that the United States wants India to use the completed port to bolster relations with its Central Asian partners.

Still, the recent takeover by the Taliban in Afghanistan could stymie efforts to use the Chabahar Port to reach Central Asia. Warming relations among Central Asian countries with Taliban leadership suggest that Central Asia could be exploring a route through Afghanistan and Pakistan instead of via Iran. This would isolate India from regional trade network discussions. Trade between India and Central Asia has suffered because of these concerns. Compared to other regional powers, the value of India’s trade relationship is minimal.

While formulating an extensive trade network to connect India and Central Asia is the cornerstone of Modi’s ambitions for the India-Central Asia relationship, he also envisages a more comprehensive investment portfolio in the region. The summit participants noted that current levels of investment between India and Central Asia were far below that of its potential and suggested the India-Central Asia Business Council (ICABC) adopt methods to attract investment. Since 2006, India has invested more than $360 million in Kazakhstan and $43.9 million in Tajikistan, but these figures are overshadowed by China’s $19.2 billion in investments in Kazakhstan during the same time period.

Even so, India is an additional option for Central Asian countries seeking to finance large-scale infrastructure projects. In October 2021, India created a $200 million line of credit for Kyrgyzstan to finance small community development projects and in March 2021, Indian External Affairs Minister Subrahmanyam Jaishankar met with his Tajik counterpart, Sirojiddin Muhriddin, to devise ways to enhance their bilateral business relationship. The willingness of Central Asian countries to engage with India emphasizes their appetite for investment and trade from a variety of donors. India should prioritize expanding its investment portfolio in Central Asia to compete with its geopolitical rivals and achieve the full potential of these partnerships.

Revival of the Taliban in Afghanistan has caused a resurgence of security initiatives to safeguard territorial integrity and stamp out religious extremism. Tajikistan allegedly received reports in September 2021 that Tajik militants who fought alongside the Taliban were plotting an attack. Uzbek officials were also among the first to engage with the Taliban leadership to receive assurances of Uzbekistan’s security. Most recently, a clash between Taliban insurgents and Turkmen security forces aggravated the security apparatus of the region, although the conflicting reports have yet to be verified.

India has also raised alarms at the Taliban takeover. New Delhi is concerned that Pakistan will take advantage of its historical ties with the Haqqani Network, an offshoot of the Taliban, to threaten India’s security. Countering religious extremism has remained at the forefront of India’s foreign policy agenda. The 2008 terrorist attack carried out by the Pakistan-based terrorist organization, Lashkar-e-Taiba, which left at least 178 dead, reinforced India’s resolve to root out extremism. Since then, India has laid the foundation for security-based relationships with its Central Asian counterparts. India could transform these joint security accords with several Central Asian states into multi-dimensional frameworks.

India has remained a stable partner for the Central Asian states since their independence 30 years ago. However, India and its regional counterparts have failed to grow the relationship into anything matching China's overwhelming presence. Numerous trade and transit difficulties impede the relationship, but innovative solutions can overcome these barriers. The United States should work alongside India to promote its inclusion in regional discussions. New Delhi’s presence in Central Asian economic and security discourse can help to balance growing Chinese involvement.

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