In Central Asia, Modi Jump-Starts India’s ‘Look North’ Strategy

http://www.worldpoliticsreview.com/articles/16243/in-central-asia-modi-jump-starts-india-s-look-north-strategy

 JULY 17, 2015 

Indian Prime Minister Narendra Modi and Kazakh President Nursultan Nazarbayev at the Akorda President's Palace, Astana, Kazakhstan, July 8, 2015 (

Saurav Jha Thursday, July 16, 2015

Indian Prime Minister Narendra Modi’s whirlwind tour this month of the five Central Asian republics of Uzbekistan, Kazakhstan, Turkeminstan, Kyrgyzstan and Tajikistan, with a stop in the middle in Russia, was a move to breathe life into the “Connect Central Asia” strategy launched under Modi’s predecessor, Manmohan Singh, in 2012. Modi’s renewed seriousness about an Indian foreign policy that looks north is underscored by India’s investment in the Iranian port of Chahbahar. The port forms the southern end of the International North-South Corridor (INSTC), a multination rail, road and shipping network connecting India with Russia via Central Asia. But this key piece in India’s plans also reveals New Delhi’s dependence on Iran in achieving its goals in Central Asia. 

India wants to expand that trade corridor as a gateway to Central Asia and Russia, bypassing Pakistan. To do so, India plans to link the INSTC with other projects in the region, such as the 2011 Ashgabat Agreement to develop a transit corridor initially connecting Uzbekistan, Iran, Turkmenistan and Oman. The agreement has since expanded to include Kazakhstan and, perhaps in the near future, India, which has expressed interest in joining. India wants to emerge as an alternative market for Central Asia, even as China looks to cement its economic primacy in the region via its massive, so-called One Belt One Road infrastucture and trade initiative in Eurasia. India’s engagement in Central Asia is also aimed at strengthening multilateral security ties, as evidenced by India’s pending entry into the Shanghai Cooperation Organization (SCO) at a time when new unrest in Afghanistan is stoking more Islamic terrorism and drug trafficking.

Uzbekistan, the most populous of the Central Asian republics and a country that sees itself as a natural leader in the region, was Modi’s first stop. Modi stressed that beginning his journey in Uzbekistan “underlined its importance for India, not just in the context of this region, but also more broadly in Asia.” Symbolism aside, India and Uzbekistan realize they need to add economic depth to their strategic partnership. Discussions during the visit focused on removing hurdles to Indian investment in Uzbekistan’s agriculture and energy sectors that could increase related exports to India. Uzbekistan is already India’s main counterterrorism partner in the region; closer intelligence cooperation on the Taliban and Pakistan, as well as on new players entering Afghanistan like the self-declared Islamic State, is on the table.

Since physical connectivity is a prerequisite to boosting economic ties, India also asked Uzbekistan to join the INSTC, after Uzbekistan supported India’s proposed inclusion in the Ashgabat Agreement. The recent accession to the Ashgabat Agreement of Kazakhstan, the second stop on Modi’s tour and India’s premier economic partner in Central Asia, has made that framework even more important. In Kazakhstan, Modi signed a bilateral deal on railway cooperation that focused on linking the INSTC with existing Iran-Turkmenistan-Kazakhstan railway lines.

Enhanced connectivity with Kazakhstan will pave the way for greater Indian exports of pharmaceuticals and manufacturing, even as Kazakhstan’s importance as an energy supplier to India is set to grow. During Modi’s visit to Astana, both sides renewed a uranium supply agreement for a further 5,000 tons of natural uranium to be exported from Kazakhstan to India. On the hydrocarbon front, India’s oil and gas giant, ONGC Videsh Limited, has already invested a third of an eventual $400 million in Kazakhstan’s Satpayev oil block. India had to be content with Satpayev since Kazakhstan favored Chinese interests in the giant Kashagan oil field in the Caspian Sea in 2013. Now, however, it seems that India will be given preferential access to more Kazakh finds in the Caspian, as Astana balances Chinese influence in its energy sector. Along with these growing economic ties, Modi also sealed agreements in Astana on expanded defense ties, with a focus on capacity-building in the Kazakh military as well as joint weapons manufacturing.

India’s new sense of purpose in Central Asia is finding support from Russia. Moscow seems to agree that new roads from the region should not only head east to China, but also south to India. Moscow has already agreed to link its Eurasian Economic Union with China’s One Belt One Road plan. But it still sees India as providing economic ballast. Last month, a proposed free trade agreement between New Delhi and the EEU took another step to being signed. In fact, even as Russia’s ties with China seem to grow in response to its isolation from Europe due to the crisis in Ukraine, Moscow is more keen than ever to have India at the Eurasian table. That explains Russia’s key sponsorship of India’s full membership in the SCO, which India is expected to formally join, along with Pakistan, by next year’s summit.

India, meanwhile, is looking to use the SCO’s Afghan involvement as a buffer against any return of Pakistan’s strategic depthin Afghanistan. New Delhi views SCO membership as a multilateral lever for managing threats in Afghanistan after the U.S. withdrawal, given the shared concerns of the Central Asian republics on Islamic terrorism. As India’s dependence on Central Asian energy grows, maintaining security in the region will be just as important as connectivity.

Energy certainly topped the agenda during Modi’s visit to Turkmenistan, where both sides called for the early implementation of the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline, known as the TAPI project. Modi proposed a new alignment for the TAPI pipeline, going through Iran and then under the Arabian Sea, instead of through Afghanistan and Pakistan. Clearly, Iran is the linchpin of India’s pivot to Central Asia, and New Delhi hopes that a U.S.-Iran reset is all the more likely with a deal finally reached on Tehran’s nuclear program. Finally, India also pledged long-term investments in Turkmenistan’s petrochemicals sector.

Overall, Modi’s tour showed that India has returned to Central Asia with a definite game plan, albeit one heavily dependent on Iran. Modi is trying to show China that it will not have free reign over the Eurasian heartland. At the same time, India’s entry into the SCO, along with a willingness to explore and even work with China’s other ambitious initiatives across the region, suggest that India is likely to both cooperate and compete with China in Central Asia.

Saurav Jha studied economics at Presidency College, Calcutta, and Jawaharlal Nehru University, New Delhi. He writes and researches on global energy issues and clean energy development in Asia. His first book for Harper Collins India, “The Upside Down Book of Nuclear Power,” was published in January 2010. He also works as an independent consultant in the energy sector in India. He can be reached atsjha1618@gmail.com.