India-Central Asia Business Council: Reinvigorating India-Central Asia Economic Engagement
Dr Pravesh Kumar Gupta, Research Associate , VIF

On 6 February 2020, the Federation of Indian Chambers of Commerce and Industry (FICCI) along with apex industrial bodies of the five Central Asian countries launched the India-Central Asia Business Council. In his address, External Affairs Minister, S. Jaishankar, called the business council a “significant step”, and urged the Indian industries to take greater interest in Central Asia to step up India’s economic engagement in its extended neighbourhood.1 Despite cordial bilateral relations, India’s combined annual trade with the region remains below two billion US dollars. Jaishankar also asked the Council to examine the feasibility of establishing air corridors between the two regions to boost trade of perishable goods, agricultural and food products.2

India has historical and civilizations linkages with Central Asia, however, this was interrupted during the colonial period and subsequently during the partition of India. The cultural influences that bind the two region together represent best testimony of this legacy. After the collapse of the Soviet Union and subsequent emergence of independent Central Asian Republics, India was one of the first countries to recognize their independence. India considers Central Asia as part of its extended neighborhood. India’s relations with the region was undermined due to the lack of direct overland route in the Post-Soviet period.

In 2012, India launched its Connect Central Asia policy in Bishkek Kyrgyzstan.3 In 2015, PM Modi visited five of the Central Asian countries which reinvigorated India-Central Asia ties. During his visit a number of Memorandum of Understandings (MoUs) and Agreements were signed which has further given impetus to India’s connect Central Asia Policy. Subsequently India was granted full membership of Shanghai Cooperation Origination (SCO) in 2017. 4 High level visits from both sides have elevated the level of bilateral political engagements between India and Central Asia. However, bilateral trade remained below potential due to lack of connectivity.

The India-Central Asia Business Council came into being after its need was felt during the maiden India-Central Asia Dialogue held in Samarkand, Uzbekistan in January 2019. The council will serve as an institutional platform to strengthen trade and investment initiatives between India and Central Asia. It will facilitate deeper cooperation between their small, medium and big enterprises to boost the inter-regional trade and economic exchanges. The areas of focus will be renewable and non-renewable energy, oil and gas, life sciences, pharmaceuticals, agro food processing, higher education, automotive industry, information technology, tourism, civil aviation, urban infrastructure and transport including railways. The council will constitute four working groups; Oil and Gas, Agro Processing and Agro Machinery, Logistics and Pharmaceuticals and Life Sciences.

The nominated representatives of India and Central Asian countries include Ms. Sangita Reddy, President FICCI, Ambassador Bulat Sarsenbayev of the Kazakh National Chamber of Entrepreneurs, Mr. Bekturgan Kalybek uulu of the Kyrgyz Chamber of Commerce and Industry, Mr. Odil Sangov, of the Tajik Chamber of Commerce and Industry, Ambassador Shalar Geldynazarov, Ambassador of Turkmenistan to India and representative of the Turkmen Chamber of Commerce and Industry and Mr. Adkham Ikramov of the Uzbek Chamber of Commerce and Industry. All of them formally declared their resolve to collaborate and provide an industry view to the bilateral economic engagement. After the meeting, it was agreed that the council will also lay emphasis on:

  • Training Human Resources
  • Relaxing Visa Regimes
  • Opening of Schools and Universities
  • Strengthening Tourism
  • Investment in Agricultural Sector
  • To connect Indian states with the provinces of Central Asian Republics

This new development will go a long way for both India and Central Asia to redraw and weave the New Silk route between the two regions. It will further substantiate the formation of the ‘India-Central Asia Developmental Group’ to enhance developmental partnership between India and Central Asia at the G2G level. Referring to the upcoming Second India-Central Asia Dialogue with the participation of Afghanistan later this year, the EAM also informed, “We are already working on the formation of the proposed India-Central Asia Development Group. Officials of all the countries are currently engaged in this process.”5

Though energy sector is a top priority, the lack of land route connectivity between India and Central Asia remains a major hurdle. It has also hindered the completion of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.6 The EAM acknowledged that the Chabahar port in Iran will help overcome the connectivity hurdles. The port will be the crucial point of connectivity for Indian goods to reach Afghanistan, and further to the landlocked Central Asian Republics. In the Union Budget 2020, the government has allocated Rs. 100 crore for the Chabahar port. India will also continue working on the International North South Transport Corridor (INSTC) and the development of the multimodal transport corridor as per the Ashgabat Agreement.7

The success of this initiative will enhance the prospects of other initiatives which are in line of discussion between India and Central Asia. The changing regional environment in Central Asia would facilitate India’s engagement with the region. It is also likely to help in improving the prospects for implementation of the connectivity projects such as Chabahar and INSTC.

References
  1. ANI News, 7 February 2020. https://www.aninews.in/news/national/general-news/ficci-in-partnership-with-central-asian-countries-launch-india-central-asia-business-council20200207035451/
  2. ‘India-Central Asia business council launched’, Outlook, 6 February 2020. https://www.outlookindia.com/newsscroll/indiacentral-asia-business-council-launched/1727841
  3. ‘Keynote address by MOS Shri E. Ahamed at First India-Central Asia Dialogue’, Ministry of External Affairs Government of India, June 12, 2012. https://www.mea.gov.in/Speeches-Statements.htm?dtl/19791/
  4. Michel Casey (2017), ‘SCO Set to Expand, Adding India and Pakistan, Does it matter that two new flags will rise in Beijing?’, The Diplomat, 6 June 2017. https://thediplomat.com/2017/06/sco-set-to-expand-adding-india-and-pakistan/
  5. Deepanjan roy Chaudhary ‘Indian Foreign Minister urges industry to take greater interest in Central Asia’, the Economic Times, 6 February 2020. https://economictimes.indiatimes.com/news/politics-and-nation/indian-foreign-minister-urges-industry-to-take-greater-interest-in-central-asia/articleshow/73988117.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
  6. ‘India-Central Asia business council launched’, India Post, 7 February 2020. https://www.indiapost.com/india-central-asia-business-council-launched/
  7. Elizabeth Roche, ‘Budget 2020: Rs100 crore allocated for Chabahar port development in Iran’, Livemint 2 February 2020. https://www.livemint.com/budget/news/budget-2020-rs100-crore-allocated-for-chabahar-port-development-in-iran-11580649324784.html

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>


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