4th Meeting of the India – Central Asia Dialogue

General Studies Paper -2

Context: Recently, EAM Dr. S. Jaishankar hosted a high-level meeting at 4th edition of the ‘India Central Asia Dialogue’ to explore economic growth opportunities and strengthen India-Central Asia relations.

Key Highlights of the Meeting

• Strengthening Financial Cooperation: EAM highlighted the opening of special rupee vostro accounts by Central Asian banks in Indian financial institutions, facilitating seamless transactions.
  • It included the potential use of India’s UPI for cross-border payments, enhancing financial integration.
• Boosting Trade & Connectivity: The Central Asian leaders stressed the importance of diversifying trade baskets to ensure sustainable and predictable economic interactions.
  • EAM emphasized the need to expand air services and streamline transit procedures, making trade more efficient.
• Commitment from Central Asian Nations:
  • Kazakhstan praised India’s innovation-driven business community, expressing commitment to deepening economic ties.
  • Kyrgyzstan reaffirmed the strategic partnership between India and Central Asia, highlighting the potential for mutual growth.
• Turkmenistan described India as a major and promising partner, recognizing its role in shaping a modern geo-economic architecture in Asia.

About Central Asia

• The five Central Asian Republics (CARS) viz Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
• These countries attained independence on the disintegration of the Soviet Union in 1991.
• All the 5 countries are land-locked.
• All the five countries are richly endowed with natural and mineral resources.
• Kazakhstan has huge commercially viable quantities of most minerals like coal, oil, gas, uranium, gold, lead, zinc, iron ore, tin, copper, manganese, chromite, bauxite and several more.
• Turkmenistan contains the world’s fourth largest reserves of natural gas while having significant quantities of cotton, uranium, petroleum, salt and sulfur.
• Uzbekistan is richly endowed with gas, uranium, cotton, silver and gold.
• Tajikistan and Kyrgyzstan have significant supplies of fresh water.
• Kyrgyzstan has significant reserves of gold, uranium, mercury and lead.
• India’s engagement with Central Asia has evolved into a strategic partnership, focusing on trade, connectivity, security, and cultural exchange.

India-Central Asia Ties

• Early Times: India has several millennia old historical, cultural and civilisational links with Central Asia.
  • Brisk trade of goods, ideas and thoughts took place from India (and China) to Central Asia and beyond over the Silk Road from 3rd century BC to 15th century AD.
  • Buddhism travelled to Afghanistan, Central Asia and Western China from India through the Silk Road.
  • Alexander of Macedonia, Kushans, Babar, Mughals and Sufism are evidence of vigorous links between India and the Central Asian region over the ages.
• Trade & Economic Cooperation: India and Central Asia focus on energy, pharmaceuticals, textiles, and technology.
  • Both have emphasized the need for greater investment and trade facilitation, particularly through Chabahar Port.
• Connectivity & Infrastructure Development: India is actively promoting regional connectivity through initiatives like the International North-South Transport Corridor (INSTC) and air service expansion.
• Security & Geopolitical Collaboration: Both share concerns over regional security, particularly in counter-terrorism and stability in Afghanistan.
  • The India-Central Asia Dialogue has strengthened cooperation in defense, intelligence sharing, and cybersecurity, ensuring a secure and stable regional environment.
• Cultural & Educational Exchange: Both continue to flourish through student exchanges, tourism, and diplomatic initiatives.
  • Indian universities attract thousands of Central Asian students, fostering strong people-to-people connections.

Strategic Challenges in India-Central Asia Relations

• Trade Barriers & Limited Economic Integration: India’s trade with Central Asia hovers below $2 billion annually—negligible compared to China’s ~$50 billion with the region.
  • Logistical challenges, high tariffs, and regulatory complexities continue to limit trade expansion.
• Connectivity & Infrastructure Bottlenecks: Transit inefficiencies, bureaucratic delays, and geopolitical tensions slow progress.
  • The lack of direct land access to Central Asia further complicates trade routes.
• Security & Geopolitical Challenges: Concerns over regional security, particularly in counter-terrorism and stability in Afghanistan.
  • China’s growing influence in the region and Pakistan’s strategic positioning create diplomatic hurdles.
• Financial & Digital Integration Issues: Regulatory misalignment and limited banking infrastructure in Central Asia pose challenges to seamless financial transactions.

Way Ahead

• Infrastructure and Connectivity: Accelerate Chabahar Port Phase-2 and Chabahar-Zahedan rail link.
  • Expand cooperation on the International North-South Transport Corridor (INSTC), linking Mumbai to Central Asia via Iran and the Caucasus.
• Institutional Strengthening: Create a Central Asia Task Force within the MEA.
  • Regularise the India-Central Asia Dialogue and Leaders’ Summits.
• Trade and Economic Diplomacy: Work towards a Central Asia-India FTA or regional trade pact.
• Energy Cooperation: Explore partnerships in green hydrogen, solar energy, and critical minerals. Re-engage with the TAPI pipeline diplomatically.
• Multilateral Engagement: Propose SCO-led initiatives on cybersecurity, counterterrorism, and health diplomacy.
• Soft Power and Cultural Diplomacy: Expand ICCR scholarships, host cultural festivals, and promote Bollywood and yoga diplomacy.
• Establish India-funded centres of excellence in education and technology.