Valdai Club

Since the emergence of new Central Asian states, India has forged a strong political relationship with them. However, lack of easy connectivity has been an impediment for India’s inroads into the region.

Central Asia had been historically a zone of India’s civilizational influence. Historically, India has had close contacts with five Central Asian states of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan. Interactions between India and Central Asian states had begun since the time of the Sakas or the Scythians. The Sakas had originally inhabited around Issyk-Kul Lake in Kyrgyzstan and later expanded southward to establish the Indo-Scythian kingdom in the second century BC. Intense contacts took place through Indian traders who visited Fergana Valley to trade along the Silk Route. Central Asia in return received a stream of philosophical ideas, especially the influence of Buddhism from India to Central Asia and beyond.

History is full of friendly interactions among Indians and the Central Asians through movement of people, goods and ideas, including spiritual interface that were not without advantage to our common heritage.

Since the independence of five Central Asian states in 1991, India was among the first to establish diplomatic relations with them in 1992; the resident Mission of India was set up in all the five states. Political ties with the Central Asian republics have been traditionally warm and friendly.

The developments in Central Asia potentially engage India’s security concerns. The struggle against terrorism and attempts to stabilize Afghanistan will always remain a challenge. All the Central Asian states and India share common concerns on threat of terrorism, extremism and drug–trafficking. The stabilization process in Afghanistan may have unexpected consequences for the Central Asian states too.

Since the establishment of diplomatic relations India and Central Asian countries have signed several framework agreements on culture, trade and economic cooperation, civil aviation, investment promotion and protection etc. At the institutional level, foreign office consultations have provided a useful forum for exchange of views on bilateral and international issues.

Nevertheless, India’s trade with Central Asia is very low and remained stagnant over the years. Indian investments to Central Asia have not been forthcoming for various reasons. Firstly, Central Asian states lack the necessary investment climate. Secondly, the banking system and financial institutions are not developed for attracting FDI and repatriation of profits. Thirdly, the present visa regime of Central Asia also puts up numerous obstacles for travelling Indian businessmen. Fourthly, frequent changes in the government formation are yet another problem for the investors.

Though few Indian companies have entered the manufacturing sectors, their success is yet to be seen. However, the initiation of Green Corridor by India, Russia and Iran known as International North-South Transport Corridor (INSTC) is a significant regional transport project trying to revive the Silk Road connectivity linking the Central Asian countries by rail, ship and by road ways for moving freight from South Asia through Central Asia, Russia to Europe. INSTC is expected to improve the linkages and increase the regional cooperation. INSTC will help in connecting India-Central Asia through transport corridors focusing on the possible regional integration.

Technical assistance under the Indian Technical and Economic Cooperation (ITEC) programme, particularly, in terms of Human Resources Development (HRD), is the cornerstone of India’s economic involvement in Central Asia.

Since independence, Central Asia has been in a state of inevitable dilemma of nation-building. The countries had been trying to follow what it termed as a “multi-vector” foreign policy, but in reality it had to pursue a conventional approach to go along with Russian choice of policy direction. It had been proved more than once that for Central Asian States the so-called multi-vector foreign policy, which essentially entailed manipulation of ties with Russia, USA, China, and other key countries in the region became unsustainable.