Destination Central Asia

Whilst China has made a huge play for energy assets in five countries of the region, the Indian government is working out a strategy to grab a slice of its natural resource pie

 Historical relations cannot always be a yardstick for deep ties in future. Foreign policy is often guided by pragmatism and national interests often guide realpolitik and bilateral relations. While India has deep historical and cultural ties with Central Asia, the energy-rich region is now courting China like never before. Cash rich-China is all over five Central Asian states with energy deals, pipelines and road and railway projects. 

    India, with its limited resources, remains undeterred. After launching its 'Connect Central Asia' policy last year, Delhi is developing a strategy to partner countries like Germany and Turkey to get a share of the natural resources in the region. Besides oil and gas, energy-hungry India is eyeing imports of uranium from both Kazakhstan and Uzbekistan. Beyond natural resources, the strategy is to focus on education, IT, pharmaceuticals and medical tourism, amongst other sectors, where India has developed expertise over the years. 
India Moves, but Slowly 
There has been a flurry of visitors from India — vice-president Hamid Ansari, external affairs minister Salman Khurshid and minister of state for external affairs E Ahamed — to the region in the past two years. Among them Ansari and Khurshid visited the region twice this year as part of Delhi's 'Connect Central Asia' policy. 
    In September, in a surprise move India held consultations with China on expanding its presence in the landlocked region. "While we told the Chinese that India will continue with its strategy of capacity building, we also quietly informed them that India remains as much interested in natural resources as China and will continue to pursue its interests," an official involved in consultations with the Chinese told ET Magazine. However, Indian economic interests in Central Asia are not limited only to energy resources, but also other raw materials vital for industrial production such as iron ore, coal and other minerals. 
    The dialogue took place in the backdrop of a snub to India when it tried to enhance its presence in the energy sector of the region's largest country. The Kazakh government awarded a stake in the Kashagan oilfield in the Caspian Sea to the Chinese state-run China National Petroleum Corporation (CNPC) after it blocked the sale of the stake of US firm ConocoPhillips to ONGC Videsh Ltd (OVL). 
    China's engagement with the region has progressed in phases and is centered on strengthening economic relationships, and addressing threats of security emanating from the region due to terrorism, extremism and Islamic radicalism. China has extended economic aid both through the mechanism of the Shanghai Cooperation Organisation (SCO) as well as on a bilateral basis by providing substantial loans to the five states. Other than oil, Beijing is keen on investing in precious resources like tungsten and uranium mines. 
    "While India is accepted by all five Central Asian Republics, India's delivery mechanism is very slow. Indian private companies do not take enough interest in this region," says Meena Singh Roy, a research fellow at the Institute for Defence Studies and Analyses and an expert on Central Asia. "China with its economic might is obviously able to penetrate into the region faster than India. While India invests in millions, Beijing invests in billions in Central Asia." 
    The Indian government, according to its policy paper, is looking to Central Asia as a long-term partner in energy, and natural resources. Delhi, like, Beijing, is also eyeing large cultivable tracts of land in the Central Asian states for production of profitable crops with value addition. 
Strategic Slot 
Energy apart, Central Asia is an area of vital importance to India because of the common challenges they face from extremism and terrorism. India considers the region as its extended neighbourhood and thus has strategic security and economic interests in the region. Instability in Afghanistan poses a serious threat to the security of India and the Central Asian states. According to the Connect Central Asia Policy, "India will strengthen its strategic and security cooperation. India already has strategic partnerships in place with some Central Asian countries. In focus will be military training, joint research, counter-terrorism coordination and close consultations on Afghanistan." 
    The Central Asian Republics (CARs) have also been voicing their support for greater Indian participation in the region. Events in Afghanistan have a spillover effect on the CARs, and an unstable and unfriendly government in Kabul post-2014 when US troops withdraw could create serious security implications for India, both internally and externally. 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. India's three pillars of strategic partnership with the region now are defence ties, counter-terror and stabilising Afghanistan. Away from the public glare, India's only military base abroad (the Ayni air base) is in Tajikistan. This is strategically located as it would assist Indian operations in Afghanistan if need be. 
Soft Diplomacy 
That India is currently focusing on its strengths is clear from the fact that it is ready to extend cooperation by setting up civil hospitals and clinics in Central Asia. India is working on setting up a Central Asian e-network with its hub in India to 
    deliver tele-education and 
    tele-medicine connectivity, linking all the five Central Asian states. In 2009-10, India had successfully launched the PanAfrica e-network connecting all countries in the continent. 
    The country's higher education system delivers at a fraction of the fees charged by Western universities. Keeping this in mind, India would like to assist in setting up a Central Asian University in Bishkek, the capital of Kyrgyzstan, which could come up as a centre of excellence to impart world-class education in areas like IT, management, philosophy and languages. 
    The government is also looking at opportunities for Indian companies to showcase their capability in the construction sector and build world-class structures at competitive rates. Central Asian countries, especially Kazakhstan, have almost limitless reserves of iron ore and coal, as well as abundant cheap electricity. India also plans to set up several medium-sized steel rolling mills, producing its requirement of specific products. 
    However, the biggest impediment for India is the absence of a direct land route to Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. China, which shares a land boundary with some of these states, has a huge natural advantage over India in this regard. The absence of a land route has impacted India's commercial engagement with the region in a big way.
    Avers Nirmala Joshi, an expert on Eurasia and Central Asia, and a former professor at 
    the Jawaharlal Nehru University, Delhi: "The geographical proximity and economic might have made China a key partner for the Central Asian Republics. The Chinese system also complements the system in the Central Asian states. India's slow 
    delivery mechanism is also not helping Delhi's cause." She adds that the Chinese are now one step ahead in entering the Exclusive Economic Zone of Uzbekistan. "India must work out its smooth connectivity route to Central Asia through Iran to bolster its presence there. Central Asia will become geopolitically important after US troops withdraw from Afghanistan next year." 
    To address this India has reactivated the International North-South Transport Corridor (INSTC). The corridor is the ship, rail and road route for moving freight from South Asia to Europe through Central Asia, the Caucasus and Russia. The route primarily involves moving goods from India via ship to Iran. From Iran, the freight moves by ship across the Caspian Sea or by truck or rail to southern Russia. From there, the goods are transported by truck or rail along the Volga River through Moscow to northern Europe. The corridor will have its starting point from JNPT port in Mumbai, and via transhipment the goods will reach Bandar Abbas port (near Strait of Hormuz) in Iran; the plan for the corridor includes building a railway link between Iran, Turkmenistan, Kazakhstan and eventually Russia. If the proposed railway line is transformed into reality then trade with Afghanistan may also be possible. Simultaneously, the importance of a $7.6-billion Turkemenistan-Afghanistan-Pakistan-India gas pipeline project as a transit route between Central Asia and South Asia through Afghanistan cannot be undermined. 
    The Iranian port of Chabahar will serve as India's gateway to Afghanistan through the Zaranj-Delaram Roadway (ZDR) in Nimroz province, built with India's assistance. India will invest in the expansion of Chabahar port. The ZDR is connected to the Garland Highway, which links up with Central Asia. The port's expansion and connection with Afghanistan will deepen India's ties with energy-rich Iran; help it access Central Asian markets without relying on Pakistan; through the Iranian port of Bandar Anzali on the Caspian coast India will be able to get access to Russia; and most importantly ZDR will help India connect with Afghanistan and Central Asia, bypassing Pakistan. 
'Sunrise' Region 
Today India's engagement with Central Asia, both politically and economically, is on the rise, but without greater access to the countries in the region. New Delhi cannot take optimal advantage of the region's rich natural resources such as oil and gas, uranium and other minerals. "The Central Asian states point out that while they are doing business with China, their heart is with India. Yet the full potential of the relationship has not been realised due to impediments like the absence of direct road access to the five states of the region," a government of India official pointed out. Absence of a viable banking infrastructure in the region is a major barrier to Indian trade and investment. 
    India also wants step up multilateral engagement with Central Asian partners using the synergy of joint efforts through existing fora like the SCO, Eurasian Economic Community (EEC) and the Customs Union. India has already proposed a Comprehensive Economic Cooperation Agreement to integrate its markets with the unifying Eurasian space. With Russian support, Delhi is pushing hard to become a member of SCO. 
    Central Asia is a 'sunrise' region for Indian businesses and there is immense scope for greater annual trade turnover with the five CARs, which now ranges between $22 million and $360 million. That can only happen when the INSTC is fully functional. 
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Vice-president Hamid Ansari, foreign minister Salman Khurshid and minister of state for external affairs E Ahamed have visited the region in the past two years