|
| ||
|
Changing Dynamics of India-Central Asia Relations The Central Asian region, as a whole, not only connects Asia to Europe, but is also rich in natural resources, provides the shortest transit route to Europe from Asia, and has a 55-million strong consumer market. It therefore occupies a special place in India’s foreign policy priorities. Unlike in the past, its importance to India today is not merely civilisational, but also geopolitical and economic. Looking at the centrality of the region’s location, in a changing strategic environment and security alignments, India is not only stepping up its diplomatic efforts in Central Asia, but is also keeping a careful watch on emerging challenges in this region. New Delhi is making a concerted effort to cement existing ties with these republics, with a view to establishing a peaceful and cooperative framework in the region. These efforts were strengthened by the visit of the Prime Minister Vajpayee to Almaty in June this year for the 16-nation Conference on Interaction and Confidence Building Measures in Asia (CICA).
The Central Asian Republics (CARs) have also been voicing their support for greater Indian participation in the region. Recently, the leaders of Kazakhstan and Kyrgyztan proposed India’s membership to the key Central Asian grouping the Shanghai Cooperation Organisation (SCO). Though India has never lobbied for its membership in SCO, nor formally applied for membership (as reported erroneously in some recent writings), it has nevertheless evinced an interest in the grouping. However, India tends to lose rather than gain by joining this organisation until SCO membership rules are finalised. Moreover, China is trying to reorganise the organisation to counter-balance increasing US influence in CARs. In the given situation, India’s interests would be better served in CICA, the recently-created Asian forum for dialogue.
Yet another reason for India’s need to cultivate the CARs is its interest in stability in Afghanistan. Events in Afghanistan have a spill-over effect on the CARs, and an unstable and unfriendly government in Kabul could create serious security implications for India, both internally and externally, as they would impact on the country’s secular fabric. Therefore, stability in this region is in both India’s as well as the CARs’ interest; it also opens up a new opportunity for cooperation. In fact, India sees the CARS as potential partners in fighting the menace of religious extremism, ensuring its energy security and expanding its trade network.
However, despite the excellent underpinning which India and Central Asia possess in terms of historical, cultural affinities and strong political ties, India has somehow been unable to achieve the kind of substantive content in its interactions with these states. And nowhere is this more visible than in the area of trade and economic relations, which are unsatisfactory, portraying not only low levels of bilateral trade between India and these countries, but also a limited number of joint ventures, with no worthwhile investments in the region being made by Indian business and industry. Though the government has set up small credit lines, the trade figures between India and the CARs have been fluctuating over the years. For instance, during April 1996-97, the total trade between India and CARs amounted to $76.4 million, in April 1997-98 it went up to $109.95 million and in April 1998-99, it came down to $67.30 million. In April 1999-2000 it again went up to $88.91 million, but during April-July 2001, they reflected a paltry $28.55 million. In April 2002, the trade figures noted $4.72 million.
However, despite the present level of trade between India and the CARs, the potential for deeper and more meaningful economic cooperation does exist. Both India and Central Asia have economic complementarity in terms of resources, manpower and markets, which if exploited, can be translated into broader cooperation to realise the potential of both regions fully. Opportunities for joint ventures in banking, insurance, agriculture, information technology and pharmaceuticals are many, while Indian commodities like tea, drugs and fine chemicals have already established a foothold in the regional markets. However, India will have to strive hard to increase its basket of exports in order to maximise mutual benefits through bilateral cooperation. Given the policy preferences of Central Asian countries, India would do well to lay emphasis on manufacturing and industrial activities. Prospects in infrastucture building and construction activities as well as commercial farming are also promising and India can exploit its expertise in the construction of small and medium-sized hydro-electric plants in countries like Kyrgyztan and Tajikistan, which have substantial hydropower potential. Also, with Central Asian energy reserves being pegged at 2.7 percent of total world oil reserves and 7 percent of total natural gas reserves, the region is a potentially important future energy source for India.
However, there are several bottlenecks that need to be addressed before any meaningful commercial relations with the CARs can be established. The ground reality is that Indian manufacturing and investment companies are apprehensive about entering the unfamiliar markets of the region, due to the rather daunting conditions that prevail. One of the main impediments is the non-availability of hard currency and lack of conversion facilities. Communication links are also inadequate; currently, the region is connected by air only, though India has been trying to improve the situation. Land and sea route options through Iran, Turkmenistan and Russia are also being explored as the establishment of new routes through the region could boost India’s trade, not only with Central Asia but also with Central Europe. However, though several agreements have been signed, they only exist on paper. For instance, the trilateral agreement on the international transit of goods between Turkmenistan, India and Iran signed in 1997 has yet to be operationalised, while the much-talked about North-South corridor, an agreement for which was signed between Russia, Iran and India in 2000, also suffers from the same fate, with several bottlenecks needing clearance before they can become viable.
It is important to note that despite the Indian government’s efforts to encourage increased economic interaction with the region, the private sector’s presence in terms of investments and projects is imperative before the economic landscape registers a change. In the given context, it is time for Indian businessmen to change their approach and look at Central Asia as a region of opportunities rather than a region of huge profits.
The writer specialises in Central Asian political and strategic issues | ||
|
URL: http://www.financialexpress.com/fe_full_story.php?content_id=16543 Print this Story
Expressindia | The Indian Express | The Financial Express | Screen | Kashmir Live About Us | Advertise With Us | Privacy Policy | | Labelled with ICRA© 2005: Indian Express Newspapers (Bombay) Ltd. All rights reserved throughout the world. Top | Close this window |