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"The Trade Game: Engaging with Central Asia" | India’s Plans for Trade Routes to Central Asian Republics

India and CARs need to beware, as SCO’s statutes make it impossible to curb Chinese expansion in the region. Replete with maps and annexures, this book is a must for a wide range of professionals, writes Anil Bhat.

Price:   995 |  23 Sep 2017 4:35 PM GMT  |  Anil Bhat

India’s Plans for Trade Routes to Central Asian Republics

The Great Game – also known as Bolshaya Igra – was all about intense rivalry between the British and Russian Empires in Central Asia (from early 19th century to early 20th century), wherein Britain sought to influence or control much of Central Asia to create a buffer to her empire’s “crown jewel”, India. Declassified British Archives in fact clearly reveal why the Brits partitioned India to create Pakistan (Unravelling the Kashmir Knot, by Aman Hingorani-Sage) to extend the great barrier for Russia and to create a long-term loyal puppy of the British, as also a thorn in India’s side.

The Brits failed to predict the irony that when India needed arms to deal with two hostile neighbours and neither they nor any western power provided them, it would be Soviet Russia supplying up to 70 per cent arms and equipment to India’s three armed forces at very political prices and forging a long-term friendship.

Whereas Britain’s aim in the Great Game was extension and protection of its power while plundering the resources of its colonies, World War II marked the beginning of the end of the British Empire. Eventually, with the US and USSR emerging as powers representing the western and eastern blocs, the new great game became one of power-power to trade, power to prevent rivals and smaller nations from trading, sanctions etc.

A further irony was that a decade after USSR’s breakup, despite sanctions, India and Russia signed an agreement in February 1998, to design, develop, manufacture and market BrahMos ( coined as a combo of Brahmaputra and Moscva rivers), a versatile supersonic cruise missile system, launchable from land, aircraft, ships and even submarines, which was successfully accomplished by 2006. Producing the world’s fastest cruise missile, about three and a half times faster than the American subsonic Harpoon cruise missile, BrahMos also became the first Make in India project in defence weaponry.

The collapse of Soviet Union, left five Central Asian Republics (CAR) namely Kazakhstan, Tajikistan, Turkmenistan, Uzbekistan and Kyrgyzstan as the largest landlocked region, with no access to any ocean and dependent on Russia, China, Iran and other nations to provide it access to warm ports. India’s desire and efforts to trade with CARs have remained greatly stymied owing to (a) Pakistan’s intransigence/ denying its land and air routes, (b) CAR’s rich energy and other mineral resources requiring heavy investments and technical know-how to develop them and (c) above all, CARs sharing common glitches of political instability, terrorism, mutual discord on border delineation, sharing of water resources and problems of being landlocked.

The Trade Game, a revised extension to India-Central Asia Relations: The Economic Dimension, is the work of Dr Amiya Chandra, a senior level bureaucrat who, in the Commerce Ministry, has handled the East European region including Central Asia, and was part of the Indian government’s delegation which set up India’s trade route to Central Asia via Iran.

This study endeavours to evaluate the extent and pattern of over two decades of their economic and trade ties in order to make a future projection of the on-going relations. It seeks the Indian policymakers to be aware of the fact that an all-round economic engagement with Central Asia can be an answer to New Delhi’s multiple objectives: (a) to maintain India’s positive political influence in the region, (b) to meet India’s energy requirements, (c) to enhance and bring better efficiency in Indian manufacturing through strategic material sourcing, (d) to develop new markets for Indian products and services and (e) for mutual prosperity, promoting and strengthening people to people contact. To overcome the problem of the CARs being landlocked, India’s short-term objective is trying to reactivate a shorter, cheaper and quicker route to Central Asia. This is the International North-South Transport Corridor (INSTC) that runs through Iran and was agreed upon by India, Iran and Russia in 2002. The INSTC has been expanded to include other members, such as Kazakhstan, Kyrgyzstan, Tajikistan, Ukraine and Belarus. The INSTC envisages a movement of goods to and from Mumbai to the Bandar Abbas port in Iran by sea, from Bandar Abbas to Bandar-e-Anzali (an Iranian port on the Caspian Sea) by rail and road, from Bandar-e-Anzali to Astrakhan (a Russian port, across the Caspian Sea) by ship and from Astrakhan to other regions in Russia by rail. According to feasibility studies, this route could reduce the time and cost of container delivery by 30–40per cent. This route may provide not just Central Asia but also Russia and the South Caucasus with a viable access to the sea through the territory of Iran.

The North-South Corridor will help India bypass Pakistan and yet reach out to Central Asia. There are other north–south routes coming up for Central Asia’s access to the sea; like the Iran-Turkmenistan-Kazakhstan rail link which will provide an alternate rail connectivity from western Kazakhstan and Turkmenistan to Bandar Abbas through Gurgan in Iran.

A medium-term objective India is working on is connectivity through Iran’s Chabahar port, which will benefit all, particularly Uzbekistan, who need warm-water ports, as they would get access to the Indian Ocean. A trilateral transit agreement with Iran and Afghanistan is in the pipeline for allowing transit rights of Indian goods through Iran to Afghanistan. During Prime Minister Narendra Modi’s visit to Iran in May 2016, India signed a historic trilateral deal to develop the strategic port of Chabahar and agreed on a three-nation pact to build a transport-and-trade corridor through Afghanistan that could help halve the time and cost of doing business with Central Asia and Europe.

Can this become India’s alternative to China’s One Belt One Road? The long term challenge is the creation of stable and competitive goods and energy supply networks for not just trade but also for the supply of oil from the Caspian Sea, gas from Turkmenistan and hydroelectricity from Tajikistan to India.

Indian public sector companies are in active discussions with Kazakhstan, Turkmenistan and Uzbekistan in the oil and natural gas sector. The governments of the region agreeing to the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is a positive indication of the opportunities ahead, given the growing political will to enter into such cooperation between Central Asia and South Asia. The TAPI gas pipeline project is crucial particularly for India’s energy security which, once completed, would provide access to the gas and oil resources of Central Asia. This will not only diversify our energy supply but also benefit Afghanistan and Pakistan and may bring in peace and prosperity to the region. Will Pakistan allow it to happen?

Exploring uranium cooperation with the countries of the region, India is also considering alternate dream projects, like oil pipelines from Kazakhstan and Russia to India. India is engaged with Central Asia through the Shanghai Cooperation Organization (SCO), of which, after contributing as an observer since 2005, became a full member in June 2017. However, India and CARs need to beware, as SCO’s statutes make it impossible to curb Chinese expansion in the region.

India is also participating actively in the still evolving Kazakhstan-promoted Conference on Interaction and Confidence Building Measures in Asia (CICA), being pushed by Turkey as well. On the economic side, India has proposed a Comprehensive Economic Cooperation Agreement (CECA) with the Russia-Belarus-Kazakhstan Customs Union to further integrate into the region’s multilateral processes like the Eurasian Economic Community (EEC) and the Eurasian Customs Union (EACU).

Replete with maps and annexures, this book is a must for a wide range of professionals, scholars and analysts.

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