Setting sights on Central Asia

Prime Minister Modi kick-started an eight-day trip to five Central Asian nations and Russia on July 6 in a bid to strengthen economic and political ties with a region, whose strategic importance to Delhi has grown significantly over the past decades.

During his visit to the region, the Indian leader will also take part in this year's BRICS and Shanghai Cooperation Organization (SCO) summits to be held on July 9-10 in the Russian city of Ufa. At the SCO meeting, India - along with its South Asian neighbor Pakistan - is expected to see its status upgraded from "observer" to a full member of the organization.

This is Modi's first trip as prime minister to the Central Asian republics of Uzbekistan, Kazakhstan, Turkmenistan, Kyrgyzstan and Tajikistan, and he intends to make a mark on his hosts while hoping to bolster Indian presence and engagement in these countries.

Dating back to the Soviet days, Delhi has traditionally shared warmer relations with these nations. India also exerts considerable soft power, with its movies and music gaining popularity in countries like Uzbekistan and Kazakhstan.

In an attempt to boost ties, India unveiled a "Connect Central Asia" policy in 2012. But the country still remains a minor player in the region, particularly when it comes to commerce. Business ties remain tepid, while India's lack of physical connectivity to the region also acts as an impediment for enhanced economic cooperation.

Investment opportunities

According to Indian government data, trade between Central Asia and India was worth less than $800 million in 2012-2013. And Indian private sector investments in the region amounted to a mere $29 million. This is despite the complementarities between India's rapidly expanding and energy-hungry economy and the region's plentiful natural resources.

Central Asian countries - particularly Kazakhstan, Uzbekistan and Turkmenistan - are home to vast amounts of oil and natural gas reserves. They also hold considerable deposits of uranium - a source that India needs to maintain and expand its nuclear program, and diversify its energy mix.

Smruti Pattanaik, a research fellow at the New Delhi-based Institute for Defense Studies and Analyses, told DW there has already been talk of building the Trans-Afghanistan Pipeline (also known as Turkmenistan–Afghanistan–Pakistan–India Pipeline, TAP or TAPI) to supply natural gas to India.

Moreover, the analyst explained, India will explore possibilities of oil exploration in Kazakhstan in which the foreign arm of India's state-owned Oil and Natural Gas Corporation Limited (ONGC) can participate in a larger scale. "It already has a 25 percent stake in the Satpayev exploration block and a joint working group may soon be established," said Pattanaik.

Improving connectivity

This is why over the past years Delhi has been actively seeking investment opportunities in the Central Asian energy industry, besides channeling money towards sectors such as automotive manufacturing and pharmaceuticals.

As part of its efforts to build a physical link to Central Asia, the Indian leadership recently agreed with Iran to develop the Middle Eastern nation's Chabahar port.

"The main reason India wants to develop Chabahar is to allow itself easier access to Afghanistan but also to Central Asia," said Michael Kugelman, South Asia expert at the Washington-based Woodrow Wilson Center. "If everything goes according to plan, then we will see the creation of new trade routes stretching from the northern reaches of Central Asia down to Chabahar, in southern Iran," he added.

Vying for influence

However, India's efforts to enhance trade and economic linkages with the region still lag far behind those of China and Russia which are vying for influence in Central Asia.

While Russian President Vladimir Putin views these countries as part of Moscow's traditional sphere of influence and launched an Eurasian Economic Union (EEU), his Chinese counterpart Xi Jinping announced an ambitious "One Belt, One Road Initiative" - a scheme aimed at improving infrastructure links and accelerating trade and investment flows among the countries located along the ancient Silk Road.

In this context, Modi will need "much diplomatic skill and even more purposeful policies to seize the new geopolitical opportunities in the region and overcome the many traditional constraints on Delhi's regional engagement," said C. Raja Mohan, a political analyst at the Delhi-based Observer Research Foundation.

Security concerns

Another reason for India attaching greater strategic importance to Central Asia is the region's proximity to Afghanistan. Many extremist groups operating in Central Asian states are believed to have links to the Taliban and other terror outfits operating in South Asia. The security situation in Afghanistan also remains fragile after the end of the US-led NATO mission.

Delhi is worried about the potential spill over effects of the prevailing insecurity in Afghanistan on Central Asian states as well as on India. Experts therefore say Modi is keen on enhancing India's security ties with these countries to prevent threats to national and regional security.

"The region wants India to step up cooperation in combating emerging threats from terrorism and religious extremism. The rise of the Islamic State in the region and the unfolding instability in Afghanistan have made such cooperation an urgent need," argued Raja Mohan.

Analyst Pattanaik has a similar view: "The Central Asian countries are fighting the menace of terrorism, drug trafficking as well as facing the threat of radical Islam. They look at India as a country that does not aspire for influence in the region and a relevant partner in fighting these problems emanating from Afghanistan."

In this context, analyst Raja Mohan pointed out that Modi also needs to end India's traditional reluctance to embark upon an expansive military diplomacy in the region. "Overcoming India's inertia will certainly take a while, but Modi is well positioned to make a fresh start in Central Asia," he said.