Strategic Analysis

Strategic Analysis:
A Monthly Journal of the IDSA

Jan-Mar 2002 (Vol. XXVI No. 1)

 

India-Kazakhstan: Emerging Ties
Meena Singh Roy * , Research Officer, IDSA

 

Abstract

Various factors, such as historical relations, the strategic situation, and economic potential, pave the way for the emergence of a unique relationship between India and the countries of the region of Central Asia. Kazakhstan, the second largest republic of the former Soviet Union, holds a special place in India’s policy priorities. The emerging ties between India and Kazakhstan clearly indicate that despite several roadblocks to the growth of relations, there are immense prospects for future cooperation.

 

India’s relations with each country of Central Asia have developed in a unique and specific way during the last ten years. The objective of India’s foreign policy has been to establish dynamic and multifaceted bilateral relations with each one of them. Each republic is important for India due to its geostrategic location, politics and economic potential. The present study examines the emerging India-Kazakhstan relations since their inception. It attempts to find answers to the following questions:

 

The Central Asian Context

The Central Asia has been at the crossroads of regional politics for centuries. With the recent developments in Afghanistan, Central Asia has once again gained a key position in world politics. Attempted efforts to stabilise Afghanistan are sure to span the new geopolitical challenges for countries in the region. Today, Central Asia has become an arena of the “bigpower-smallpower syndrome”. The region has become an area of immense importance to Europe, USA 1 , Russia, China, Iran, and Turkey. The US has provided a new direction to cementing a new partnership with some of these Central Asian Republics (CARs). Russia is trying to build a new cooperative framework with this region. China has committed billions of dollars for the development of Central Asian oilfields to fulfil its future energy needs. Europe wants to extend its influence by expanding North Atlantic Treaty Organisation (NATO) eastwards and through the Partnership for Peace (PFP) Programme. 2 Pakistan considers the CARs as a diplomatic and commercial opportunity and as an expanded ‘strategic depth’, though there is little apparent enthusiasm in Central Asia for taking sides in South Asia. Despite the suspicions and doubts of the CARs regarding Pakistan’s support for the Taliban in Afghanistan, Pakistan is trying to forge good-neighbourly relations with this region. As a member of the Organisation of Islamic Conference (OIC), Pakistan is also establishing a strategic partnership with Turkmenistan. The opening in 1999 of a new road linking the Ferghana Valley and Dushanbe with the Karakoram Highway opens up a Central Asian market for Pakistan. The announcement on June 17, 2001 of the Pakistan Finance Minister, Mr. Aziz about building a rail link from Dalbandin via Panjgur to the Gwader deepsea port with Chinese cooperation has renewed the prospect of an alternative land-sea trade outlet for Central Asia through Pakistan via the Indus Basin corridor. 3 Turkey, Iran, and Saudi Arabia are also making efforts to create a position of influence in this region. Some analysts believe that Afghanistan’s endgame is fuelling the growing competition between Russia and its Western allies. 4 In this context it is important to note that the end of the Taliban rule in Afghanistan has helped foster a strategic cooperation between Pakistan and Iran. Following a recent visit to Pakistan by the Iranian Foreign Minister Kamal Kharrazi, the nations have signalled an interest in expanding political, economic and strategic cooperation. Experts view such cooperation as a counter-measure to the potentially growing Western and Russian influence in Afghanistan 5 . Such power politics in Central Asia is neither in the interest of India nor of the CARs.

India, as a pre-eminent regional power in South Asia is naturally interested in any changes occurring within or close to the CARs, which may have implications for its security. India, as an extended neighbour of the CARs, has major interests in this region 6 . Peace and stability in the CARs is vital for India’s security. India has been a victim of extremism and cross-border terrorism in Kashmir for more than ten years. The CARs too, are engaged in a fierce struggle against Islamic radicals trying to destabilise the region. Any advance by Islamic extremist groups in the CARs could invigorate similar elements active in Kashmir. For reasons of geography, India’s strategic concerns are focused on its north and northwest. In its northwest Pakistan continues to be antagonistic towards India, sponsoring cross-border terrorism in Kashmir against India. The Kashmir issue pertains not to the four million Muslims living in the Kashmir valley alone but to the peace and security of 130 million Muslims living elsewhere in India. 7

Afghanistan and Pakistan continue to be the key actors creating destabilisation both in the CARs and India. Should the destabilising pattern of local conflicts, as manifested in Afghanistan and some of the Central Asian States, especially Tajikistan, continue unabated, the security environment of southern Asia, already under severe stress, is likely to become more explosive. The recent attack on the World Trade Centre in New York and the US military response to it have further given a new dimension to the whole security scenario in this region. Central Asia cannot be truly stable so long as there is war in Afghanistan. An unfriendly government and instability in Afghanistan can further destabilise this region and create serious security implications for India, both internal and external. Internally it would affect the secular fabric of the country, and externally, India’s relations with the CARs. A stable and friendly government in Afghanistan, on the other hand, would open up a new front for greater cooperation between India and the CARs. Internally, it would help India in tackling cross-border terrorism in Jammu and Kashmir. Although establishment of interim government in Kabul for six months and deployment of British forces under the United Nations have given some hope of peace in the country, regional problems remain intact. Deriving the right balance of representation among the many factions and local authorities in Afghanistan is a huge and difficult task, and recent indications of warlord activity will make the country harder to unify peacefully. Therefore, keeping in view the developments in Afghanistan, CARs occupy a significant place in India’s foreign policy.

Central Asia is also a transit route of considerable significance for Asia. Throughout history the Central Asians lived in mutual economic symbiosis with neighbouring India, China, Iran, and Europe. 8 Today, these old ties need to be strengthened once again.

The trade and economic relations between India and the CARs are, at the moment, dismally low. There is insignificant trade, limited number of joint ventures, and no worthwhile investment in Central Asia by Indian business and industry, though there are small government credit lines. Nevertheless, the potential for mutual economic advantages for the two regions from an enhanced trade and economic relationship is vast. Central Asia is a huge consumer market. There are a range of goods and services which India can provide. Both India and Central Asia have economic complementarity in terms of resources, manpower, and market. These diverse resources can be pooled for a broader regional cooperation in Asia and to realise the potential of both regions fully. For India, economic cooperation is possible through joint ventures in banking, insurance, agriculture, information technology, and pharmaceuticals. Certain Indian commodities, for example, tea and drugs, pharmaceuticals and fine chemicals have established a foothold in the Central Asian market. 9

An additional reason for developing friendly relations with CARs is India’s need to ensure its energy security. It is estimated that the Caspian region holds 6,000-12,000 mtoe (4-7 per cent of global reserve) of oil and 5,000-9,000 mtoe (5-8 per cent of global reserve) of gas. 10 Some Central Asian sources report that the confirmed oil deposits are 13-15 billion barrels, which is 2.7 per cent of all the confirmed deposits in the world, and around 270- 360 trillion cubic feet of confirmed deposits of natural gas, which constitutes around seven per cent of world deposits. Another view is that the actual reserves of oil in the Central Asian region are in the range of 60 -140 billion barrels. 11 The main oil and gas deposits in the CARs are in Kazakhstan, Turkmenistan, and Uzbekistan. Kyrghyzstan and Tajikistan have enormous hydel resources, the figure for Tajikistan being up to two million kwh of hydel resources for every square kilometer. The average for the Commonwealth of Independent States (CIS) countries is 150 -200 kwh per sq. km of hydel resources. This energy resource can be of use to India if it can be reached through a viable route. 12 It has been suggested that with consumption growth expected to be over six per cent per annum, India’s reliance on imports (currently 60 per cent or 75 million tonnes) will double to 150 million tonnes per annum by 2010. 13 India has already overtaken UK as the sixth largest consumer of energy, and by the first half of the century, it is projected to be among the top five consumers of energy. India’s Gross Domestic Product (GDP) growth rate, which averaged about 5.6 per cent between 1992 and 1997, is expected to average around seven to eight per cent for the next few decades. To sustain this economic growth, India will need a vast amount of energy. 14 Thus, in this sense, Caspian energy resources make this region a place of great significance to India.

 

Kazakhstan’s Importance

There are three factors which make Kazakhstan important for India. First, its geostrategic location, second, its economic potential, especially its energy resources, and third, its multi-ethnic and secular structure. Kazakhstan’s geo-political existence between Russia and Asia, along with the long border with China, makes it a country of great strategic importance. Kazakhstan lies to the northeast of the Caspian Sea, with the Russian Federation to the north, China to the east, Kyrghyzstan, Turkmenistan and Uzbekistan to the south. 15 Despite India not having any border with Kazakhstan, its geostrategic location makes this country important for India because India has an interest in the states bordering Kazakhstan. It is important to note here that the strategic community in Kazakhstan feels that the CARs are being squeezed between China, Russia and now, after the September 11 attack, it also has the American eagle flying over it. 16 Mr. Ashimbayev, Director of Kazakhstan Institute of Strategic Studies, remarked during his presentation (on ‘New Structures of International Relations and Security Problems’) at a conference in Almaty on October 29, 2001 that “ No one will allow Central Asian States to have an independent and a self-sufficient security setup”. Therefore, Kazakhstan apparently seeks some strategic space and manouvrability to balance the two. Mr.Kamal Burkhanov, Director, Institute for Russian and China Studies, is also of similar opinion and has recently very emphatically stressed the importance of greater and more assertive Indian presence in the region. 17 This issue also needs to be viewed against the current developments in Afghanistan. India should see to it that this region does not fall in the hands of those that are inimical to the security interests of India. Kazakhstan is worried about the increasing influence of Russia, China and the US in the region but at the same time needs them. It needs political links with Russia and economic links with the US. China having a long border with Kazakhstan needs to be engaged. As far as India is concerned, it enjoys good relations with CARs, Russia and the US. Therefore, India can play an important role by increasing its ties with these states.

The second factor making Kazakhstan important for India is its energy resources and economic potential. In this perspective, the energy issue certainly deserves particular attention. India remains an energy deficient country and needs to ensure a better supply. In Central Asia, Kazakhstan and Azerbaijan are the principal resource-rich countries. In the first half of the twenty first century, India will be one of the top five consumers of energy. Currently, most of India’s import comes from the Persian Gulf region, but to enhance its energy security India needs to look at an alternative source of energy. In this respect the Caspian region can be an alternative source for India since this region is considered to have the proven reserves of 25 to 30 billion barrels of oil. 18 In Central Asia, Kazakhstan and Azerbaijan are, the principal resource-rich countries. Kazakhstan has been termed the ‘Second Kuwait’ on the basis of its petrol reserves. In CIS, Kazakhstan is the second-largest petroleum producer after Russia. In 1996, 4,60,000 barrels per day were extracted, with 40 per cent of this sold in the international market. Its share of world production is at par with that of countries like Syria and Brazil. 19 According to the Kazakh Deputy Minister for Economy and Trade, Galum Orzabekov, Kazakhstan is expected to extract over 46 million tonnes of oil and gas condensate in 2002. 20 The opening of (US$2.6 billion) Caspian Pipeline Consortium (CPC) which runs from the Tengiz oilfield in Western Kazakhstan to Russia will pump around 6,00,000 barrels of oil to the west from Central Asia each day. This is a significant development. Analysts feel that with the opening of this pipeline the non-Gulf oil is likely to become more attractive to global oil consumers. 21 The production of natural gas has developed slowly, and reached a level of 7.9 million cubic metres in 1991. Subsequent production has not been consistent, varying from 11.2 million cubic metres in 1993 to 7.66 in 1996, an average of a mere one per cent of the CIS total. Other mining resources of Kazakhstan are numerous and inexhaustible: of all the countries of the CIS, 70 per cent of its copper and a substantial amount of iron, tungsten, manganese and nickel is extracted and treated by Kazakhstan. Kazakhstan is also the world’s leading producer of chrome. Silver and gold deposits remain substantial in Kazakhstan. These resources add to Kazakhstan’s importance.

Kazakhstan has carried forward its economic reforms at an ambitious pace for a number of years now and has good economic prospects. Its reforms have been considered the most progressive among the countries of the CIS. 22 Among the Central Asian countries, Kazakhstan has the most developed commercial, legal and regulatory environment. Prior to independence in 1991, the Kazakh economy existed as a highly integrated part of the Soviet production system. With the breakup of the Soviet Union, this centrally planned system collapsed, causing a fall in GDP of over 44 per cent between 1990 and 1995. Growth resumed in 1996 and 1997, slowed after the 1998 Russian crisis, but picked up pace again 2000.The growth rate in first half of 2001 has been 14 per cent. 23 In 2000 the trade surplus amounted to US$1 billion, seven per cent of the GDP. Total external debt fell to $7.5 billion at the end of June 2000 (about 50 per cent of the GDP) following an early repayment of outstanding IMF debt in May 2000. The government plans to step up its debt repayment in 2001-2002.The GDP per capita in Kazakhstan is US$1226.17. It receives relatively high amounts of foreign investment (about US$1.5 billion per year) mostly for the development of its oil sector. 24 According to President Nazarbaev, over the past ten years Kazakhstan has attracted $20 billion in investment, including $12 billion worth of direct investments. The oil sector accounts for some 65 per cent of direct investments. As far as foreign trade is concerned, Kazakhstan’s major trading partners are Russia, Uzbekistan, Germany, Turkey, UK, USA, Netherlands and China. Russia is Kazakhstan’s biggest trading partner. Trade turnover between the two countries in the first nine months of 2001 amounted to $3.6 billion. As compared with the other countries, India’s total trade with Kazakhstan was very low. During 1999-2000 the total trade turnover between the two countries was US$60 million only. 25 Nevertheless, there is a potential for a future partnership in this area.

The third factor, which makes this country important for India, is the multi-religious, multi-ethnic, democratic and secular structure of Kazakhstan. They are deeply concerned about the rise of religious extremism in their neighbourhood. In Kazakhstan today, the secular state prevails. The Kazakh national flag currently makes no references to Islam: sky blue background represents the endless sky, golden sun with thirty two rays and a golden ‘steppe’ eagle appear in the centre, on the hoist side, a piece of national ornamentation appears in yellow. In Kazakhstan, the emergence of a politicised Islamic movement of real strength is less likely than in the other former Central Asian Republics. While Islam is deeply rooted in Tajik and Uzbek societies, this is not the case in the traditionally nomadic Kazakh society. Muslim radicalism has to date never gained ground in Kazakhstan. It is only in the extreme southern strip of the country that the religious feeling is strong. At present, religious politics are at the centre of the great cultural battle in which three protagonists fight for supremacy: the official religious hierarchy, a parallel one, and some nationalist movements, strongest of which are Jeltoqsan and the Alash Orda. Despite official control over the spread of political Islam there has been an increase in the number of mosques. While in 1985, there were 25 mosques, they went up to 60 in the year 1990 and 600 by end of 1995. Egypt and Turkey have been the major financers in the construction of these mosques. In fact, official Islam has met with opposition from the popular version, which has run on the parallel track and has developed mainly in the southern part of the country. But it is important to note here that the government of Kazakhstan does not promote any kind of political Islam and has a strict control over these Islamic radical forces. Kazakhstan has shown a great amount of interest in learning from the Indian experiences of religious tolerance, unity in diversity and pluralist democracy. They also feel that combating terrorism could be an area of bilateral cooperation between the two nations. 26

 

Existing Relations and Future Prospects

Having analysed the importance of Kazakhstan to India, it is necessary to highlight the driving forces which exist between the two countries and examine the future prospects.

Political Relations

India lays great emphasis on its relations with Kazakhstan, which is the second largest republic of the former Soviet Union. There is a high level of activity in the political cooperation between the two countries. Indo-Kazakh contacts go back to the days of the great Silk Route through which not only did Indian goods move to the Far East but this route also became the highway for Buddhism from India to Kazakhstan. Indo-Kazakh relation dates back to the third century BC. During the Soviet days, however, Indo-Kazakh ties were through Moscow. In 1955 Jawaharlal Nehru, India’s Prime Minister, visited Almaty along with Indira Gandhi, his daughter, who would one day herself become the Prime Minister. 27 With the independent Kazakhstan, India established the diplomatic relations in May 1992, opening its Embassy in Almaty. The Embassy of Kazakhstan was opened in New Delhi in September 1993.

Relations between India and Kazakhstan ever since have been marked by a significant cooperation in different areas ranging from science and technology to cooperation in medium and small-scale industries, upgrading and modernisation of existing infractructural facilities as well as training programmes.

Political interaction between India and Kazakhstan has been regular and mutually supportive in the UN and other international organisations. Both have high levels of understanding and shared perceptions on each other’s concerns in the region. 37

Economic Relations

In terms of economic cooperation, Kazakhstan is of great importance to India. Kazakhstan is the only country in Central Asia, with which India has considerable trade relations. For example, ISPAT International Consortium has acquired the shares of Karaganda Metal Plant, carried out its modernisation and turned it into a profitmaking enterprise. In 1997, ISPAT-KARMET was exporting 90 per cent of its products to India, which for the first time gave Kazakhstan a balance of trade in its favour. 38 The pharmaceutical factory of the Kazakh-India joint venture Kazakhstanapharama is approaching completion in Almaty. More than 30 Indian companies have their offices in Kazakhstan and they are actively investing capital in the Kazakhstan economy. Larsen & Toubro signed a business venture agreement in November 1999 with the Government of Kazakhstan. India and Kazakhstan have also signed a memorandum of understanding and cooperation for the development of small enterprises and creation of new work places. An entrepreneurial development centre is being built in Asthana.

Trade and economic relations between India and Kazakhstan are regulated on the basis of six inter-governmental agreements. The trade figures between the two countries have been fluctuating over the years, with the peak in 1997-98 and the trough in 1999-2000 (see Table 1). The main inhibiting factor in trade is the high cost of transportation of goods from India to Kazakhstan, and vice versa. Indian goods can become more competitive once the cost of transportation is reduced. The ‘North-South Corridor,’ if established, can redress this imbalance. Kazakhstan has also expressed its readiness to join this corridor. Attempts have been made to resolve transport problems between Bombay and Asthana; 350 containers are imported and exported annually through the Indian port. 39 Despite low levels of trade there is potential for further growth. Both the governments are trying to work jointly to address the various roadblocks.

Table-1. Trade Between India and Kazakhstan, 1996-2001

(in Rs. lakh)

Period Export to Import from  
  India India Total
April 1996-March 1997 4,461.18 28,449.66 32,910.84
April 1997-March 1998 15,685.84 25,150.32 40,836.16
April 1998 March 1999 5,229.28 15,986.31 21,215.59
April 1999-March 2000 4,670.30 12,116.23 16,786.53
April 2000 822.29 1,130.48 1,952.77
April 2001 60.29 1,040.14 1,100.43

Source: Foreign Trade Statistics of India: Principal Commodities and Countries, 1996-2001. Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce and Industry, Government of India, Kolkata.

 

Although the present level of trade between the two countries is nowhere near the real potential, there are many areas where both countries could be engaged in meaningful cooperation. Economies of the two countries are complementary to each other and not competitive. Six Indian firms are accredited with Kazakhstan and nine joint ventures are registered. Infrastructure building and construction activities have considerable prospects in Kazakhstan. Asthana, a new city in the process of being built, is humming with construction activities. It is once again a good opportunity for companies that are specialised in infrastructure and construction to get involved in this area.

During the conference on Investment Possibilities in Central Asia, held in February 2000, a Memorandum of Understanding and Cooperation was signed between the Ministry of Ecology and Resources of Kazakhstan and Tata Energy Research Institute (TERI). 40 The meeting of the Joint Council of the businessmen of Kazakhstan and India, held in Almaty in May 2000, was an exploratory exercise. Another attempt to strengthen the trade ties came in May 2001 when “Indo-Kazakhstan Chamber of Commerce” was established in Chennai in India. 41 Currently, India-Kazakhstan trade is mainly confined to the traditional commodities which India used to supply to former USSR. Table 2. highlights the major items of import and export between the two countries.

Table 2. Major Items of Import and Export

Export items to Kazakhastan from India Import items from Kazakhastan to India
Tea Iron &steel
Machinery & instruments Other crude minerals-gold & silver
Drugs & pharmaceuticals Non-ferrous metals
Cosmetics/toiletries Machinery except electrical &
Primary semi-finished iron & steel Electronics, etc.

 

The US Energy Information Administration (EIA) has stated in its forecast that Caspian oil production will reach 6 million bpd by 2020. 42 The OPEC in its recent forecast has mentioned that Kazakhstan may become the largest producer of crude oil in the world by 2015 and reach the level of Saudi Arabia. 43 Once the transport corridor is established, there is a great scope for cooperation between India and Kazakhstan in the energy sector as well. The Government of Kazakhstan has also issued a license to the ONGC Videsh Ltd., the Indian Oil Corporation and ISPAT-KARMET, for the exploration and extraction of oil near Pavlador and Aktyubinsk. In August 1999 a memorandum of mutual understanding was signed for the project, for the construction of a project with modern technology for use of coal waste. At the same time, a joint venture for feasibility study of the project was also signed. There is also a lot of potential for cooperation in the field of space with Kazakhstan.

 

Specific Sectors of Indo-Kazakh Collaboration

There exist immense future prospects for India-Kazakhstan cooperation in banking, construction, information technology, airways, pharmaceutical, commercial and hill farming, and food processing. Especially in telecommunication, India can contribute a great deal in the field of telecom modernisation of Kazakhstan. India can provide expertise and training in the field of satellite imagery and also in financing, in management and in the service sector. Besides, Kazakhstan offers prospects for import of raw wool.

Prospects are there in tourism industry as well. This will not only bring profit to Kazakhstan but will also help build people to people contact between the two countries. In this sector, Kazakhstan needs to develop infrastructure and create an environment for investment in Kazakhstan. Considering the present levels of industrialisation of CIS countries, Indian technology could be more suitable than western technology.

Another field with rich potential for cooperation is mineral exploration. Kazakhstan has high quality mineral resources. The most important is oil, which is followed by coal, copper, iron, lead, zinc, and gold. One half of the known reserves of iron ore and copper, 37 per cent of bauxites, 20 per cent of lead and zinc, 12 per cent of gold, 11 per cent of gas, 4 per cent of oil and manganese are ready for exploration. Considerable investment is required in many multimetal deposits as well as in copper fields, tin fields, bauxite fields, uranium fields, gold and silver fields and rare-earth metal fields. Indian investors and business companies should take advantage of this opportunity as this sector has the potential. Kazakhstan offers opportunities to the Indian business community in various manufacturing sectors, such as, textiles, clothing, leather, plastic, chemicals, engineering goods, etc. 44 The potential sectors for investment by Indian companies could be: food processing, mining machinery and equipment, textiles, wool processing, consumer electronics and tools, and steel/copper pipes and tubes. 45

 

Prospects in Security Arena

Economic prosperity is unattainable without adequate political stability and overall security. In their mutual interest, India and Kazakhstan need to cooperate in the sphere of security as well. This would possibly include:

There is a great amount of understanding between the two countries in relation to the arising security problems in the region. Sharing a border with China, as India does, Kazakhstan has adopted a policy of maintaining a balance in the region, in view of the rising influence of China. In this regard both countries can cooperate at the strategic level. 46 Problems of security emanating from Afghanistan and Pakistan are affecting all of us in the region. India and Kazakhstan could address these problems jointly. As a secular country, Kazakhstan understands the problem of cross-border terrorism as faced by India in Kashmir. Therefore, it could cultivate an opinion in Organisation of Islamic Conference (OIC) against the radical aspirations of Pakistan.

Of utmost importance to India is the initiative taken by Kazakhstan in creating the Conference on Interaction and Confidence-Building Measures in Asia (CICA) with the aim of ensuring security and stability on the Asian continent. For the countries of Asia and its neighbouring regions, the need for peace, stability and greater cooperation has never been as important as it is now. Asia is possibly the only continent still beset with perennial conflicts, many with their roots in history and the colonial past. The violent turbulence in Afghanistan continues to affect the entire region, and growing violence along the southern belt of oil-rich Central Asia serves as a stark reminder to mankind. A human tragedy continues to affect the people of Iraq, ethnic violence in Indonesia has still not ended, and tensions in the Korean Peninsula and South China Sea remain worrisome. These uncertainties need to be addressed and solutions found. The CICA provides a continental forum to discuss the most pressing problems affecting the continent and making a joint search for solutions. In this context the importance of CICA is obvious. At present, 16 Asian states are members of this forum. India fully supports CICA 47 and hopes that forum will serve as a new system ensuring security, stability and peace in the region. While India’s commercial profile can acquire prominence only after it gets more deeply involved in the oil and gas sector, there are opportunities in the security arena where India and Kazakhstan can cooperate.

 

Roadblocks to Indo-Kazakh Co-operation

Having said all about the economic and geo-political potential, which exists between India and Kazakhstan, one cannot ignore the problems and several roadblocks which are a reality. Some of these constraints in enhancing India-Kazakhstan cooperation are:

The Government of India is making an effort to create the right kind of atmosphere for the companies to enter this market. It has been striving to improve the connectivity. Land route options through Iran and Turkmenistan are also being explored. There already exist a rail and a road line in Turkmenistan and Iran, except for a few short stretches between Meshad and Sarakhs on the Iranian side and Tredzen and Sarakhs on the Turkmen side. A Three-Party-Agreement on international transit of goods between Turkmenistan, India and Iran signed on February 22, 1997 at Tehran is of great significance. 49 This would enable the movement of goods from Indian ports to Bandar Abbas in Iran and then on to the Central Asian region by road and rail. India and Russia are developing a new transit route through Iran. New Delhi, Moscow and Teheran signed an agreement in St. Petersburg on September 12, 2000 for sending Indian Cargo to Russia through a ‘north-south corridor’. According to the arrangement Indian goods will be sent from Mumbai or Okha to the Iranian hub of Bandar Abbas via the strait of Hormuz in the Persian Gulf. From here, containers will be reloaded on trucks or railway wagons and dispatched to the Iranian port of Anzali on the Caspian Sea. After transhipment at Anzali, goods will be loaded on ships and taken to the Russian port of Astrakhan. Astrakhan, in the past, has been the springboard for expanding Tsarist Russia’s influence towards Central Asia. The land route from Astrakhan to the Russian mainland is straightforward and containers from here can be sent either to Moscow or St. Petersburg. Cargo can further head for European destinations such as Helsinki and Hamburg because of the availability of a well-developed road and rail network. There are several bottlenecks yet to be cleared before the corridor could become viable. This new corridor could boost Indian trade with the CARs as well as Central Europe. 50 Another transit route option which has been widely discussed is an agreement with China for the use of its road to Kyrghyzstan through the Xinjiang province. India could use this road by constructing a link road in Ladakh joining the Tibet-Xinjiang road. Ladakh is already linked by road with Himachal Pradesh. Therefore, connectivity is what India and the CARs in general and Kazakhstan in particular should focus on if existing relations need to be strengthened.

 

Recommendations

Both governments could address the above-mentioned handicaps by taking appropriate measures. Both the governments need to consider the following recommendations:

 

Conclusion

Many experts see Central Asia as one of the areas of instability. On the contrary, it can become a natural, historically formed buffer zone. It can also form the hub of Islamic extremism. It is rich in minerals, especially hydrocarbons. Being in the middle of the Eurasian continent, it is also one of the most convenient routes of transit. As a consumer market, it remains virtually unexplored.

India as an extended neighbour of the CARs has major geostrategic and economic interests in this region. The prospect for cooperation between Central Asia and India in the field of energy security seems to be bright. Peace and stability in the CARs and Afghanistan seems to be the most crucial factor for India’s security. There is already a realisation of danger posed by religious extremism and terrorism by world powers. In fact, this problem of terrorism is not only being addressed at a bilateral level but also in various regional forums like Shanghai-5 {now Shanghai Cooperation Organisation (SCO)} and CICA. 51 While formulating its policy towards CARs it is important for India to ensure that this region does not enter into any hostile combination against India.

Kazakhstan holds a special place in the foreign policy priorities of India. India seeks no clash but a compatibility of interests with Kazakhstan. Over the period of last ten years, the relations between the two countries have developed in a unique and specific way. During this period the objective of India’s policy has been to establish dynamic and multifaceted bilateral relations with Kazakhstan. India is keen to have both strong economic as well political ties with Kazakhstan. India’s focus should lie in getting more deeply involved in the energy sector in Kazakhstan. Although there are problems in transporting these resources, both countries need to work together to establish some kind of bilateral or multilateral arrangement to transport these resources. Despite India’s low level of involvement in the economic sector, possibilities of future cooperation in this strategic arena exist which both the countries need to work on. Once the problem of connectivity gets resolved, the linkages between India and Kazakhstan will take a new turn for the benefit of both the countries.

 

Acknowledgements

The author thanks Maj. Gen. (Retd.) V.K. Shrivastava, Cmde C.U. Bhaskar, Shri Sujit Dutta and Shri Rajiv Sikri, for their valuable inputs for this paper.

 

Endnotes

Note *:   Dr. Meena Singh Roy is a Research Officer. Her area of specialization is Central Asia and Africa. She received her PhD from Department of African Studies, University of Delhi. Back.

Note 1:   Silencing Central Asia: The Voice of the Dissidents. Testimony from US Congressional Hearing on Central Asia, Committee on International Relations of Representatives, July18, 2001.

The US interests in the CARs have been clearly identified in testimony in US Congressional Hearing on Central Asia: “The overarching goal of the U.S. policy in Central Asia is to see these states develop into stable, free market democracies, both as goal in itself and as a bulwark against regional instability and conflict. This broader goal serves three core strategic interests: regional security, political/economic reform and energy development. While our security and energy interests are important, in long run none of these goals can be achieved until these governments undertake comprehensive reforms to enfranchise their people both economically and politically.” Back.

Note 2:   P. Stobdan. India and Central Asia: Imperatives for Regional Cooperation in Peace and Security in Central Asia. In Jasjit Singh, Ed. Peace and Security in Central Asia. Occasional Paper Series. 2000. Institute for Defence Studies and Analyses, New Delhi. pp.96-98. Back.

Note 3:   Aftab Kazi,. Transit- Route Politics and Central Asia’s Indus Basin Corridor. The Times of Central Asia Bishkek, ). Jul 12, 200, 3 (28) & (123) Back.

Note 4:   “Igor Torbakov. Russia’s Growing Presence in Afghanistan hints at Regional Rivalry with Western Power”, at http://www.eurasianet.org/departments/insight/articles/eav120201.shtml Back.

Note 5:   Akhtar Jamal “Pakistan, Iran Ready for New Strategic Cooperation” at http.//www.eurasianet.org/departments/insight/articles/eav120/o1a.sntmtBack.

Note 6:   This subject has been dealt in greater detail in separate article. See Meena Singh Roy. ndia’s Interests in Central Asia. Strategic Analysis, March 2001. 24 (12) Back.

Note 7:   P. Stobdanp, no. 2 Back.

Note 8:   A Perspective for Central Asia-India Relation: Common Ties of History. The Times of Central Asia, January 27, 2000.

The Islamic geographer Yaqut noted in the twelfth century that “ a prosperous merchant of Merve had one warehouse on the Volga river and another in Gujrat, India and he owned his prosperity to his role as a middle man in an exist of trade” Central Asia was a meeting point for traders and travellers, where mercantile communities lived in perfect harmony. Back.

Note 9:   Azhar Muhammad. The Emerging Trade Relation Between India and Central Asi. In Shams- ud- din, Ed. Nationalism in Russia and Central Asian Republics, 1999. Lancers Book., New Delhi. pp. 329. Back.

Note 10:   The Geo-Politics of Caspian Oil. Jane’s Intelligence Review, Jul 2000. 12(7) Back.

Note 11:   Alim Jone. The Energy Security Challenges and Resource: Transport Corridors. Paper Presented at India-Central Asia Seminar in New Delhi on September 11-12, 2000. Back.

Note 12:   Ibid. Back.

Note 13:   India Vulnerable to Oil Supply Cuts. The Hindu, New Delhi. Feb 1, 1996. Back.

Note 14:   S. Ray Dadwal. Energy Security: Challenges and Resource: Transportation Corridors. Paper Presented at the India- Central Asia Seminar in New Delhi, Sep 11-12, 2000. Back.

Note 15:   “Kazakhstan”, Worldmark Yearbook, 2000 2(I-R.) Detroit, New York. p.1457. Giampaolo R. Capisani. The Handbook of Central Asia, 2000. I.B. Tauris, New York. p.8. Back.

Note 16:   “US Support for Karimov Under Scrutiny”, http./www.iwpr.net/index.pr?aremve/rca/rca/rca_2001 10_11_1_eng.txt Back.

Note 17:   Based on discussion with several experts in Almaty. Oct 2001. Back.

Note 18:   Caspian Energy Resources: Implications for the Arab Gulf, 2000. The Emirates Center for Strategic Studies and Research, Abu Dhabi. p. 15. Back.

Note 19:   The Handbook of Central Asia, no.15. P.39. Back.

Note 20:   The Times of Central Asia, Nov 15,2001. 3(46) & (141), p. 7 Back.

Note 21:   Ibid, Nov 29, 2001. 3(48)& (143) p.6 Back.

Note 22:   For more detail see “Foreign Trade and Economic Development of Kazakhstan”, The Times of Central Asia, Nov1, 2001. 3 (44)&(139) p.7. Back.

Note 23:   “The EU’s Relations with Kazakhstan-An Overview”, at http:// europa.eu.int/comm/external_relations/kazakhstan/intro/index.htm. Kazakhstan-Fact Sheet, Aug 25, 2001. Almaty, Embassy of India. Back.

Note 24:   “Economic Situation and Outlook in Russia and Central Asia”, at http://wbin0018.worldbank.org/eca/eca.nstBack.

Note 25:   Francesca Mereu, “Kazakhstan: Nazarbaev Calls for Stronger CIS”, at http://www.eurasianet.org/departments/insight/articales/eav120/o1b.shtml. Report by Confederation of Indian Industry (CII) on Kazakhstan, 2001. Back.

Note 26:   Based on discussion with experts in Almaty. October 2001. Back.

Note 27:   Chinara Jakypova “Indo-Kazakh Bilateral Relations,” http//meadev.nic.in/foreign/kazak.htm Back.

Note 28:   Ministry of External Affairs Report 1992-93, p41-42 Back.

Note 29:   Ministry of External Affairs Annual Report, Government of India, 1993-94 p.28. Back.

Note 30:   Ibid. 1995-96 p.34. Back.

Note 31:   Ibid. 1996-97 p.31. Back.

Note 32:   Ibid. 1997-98, p43 Back.

Note 33:   Ibid. 1998-99, p.34-35. Back.

Note 34:   Ibid. 1999-2000. p,32. Back.

Note 35:   Ibid. 2000-2001, p.34. Back.

Note 36:   Kazakhstan in Brief, 2001. Embassy of Kazakhstan, New Delhi. p.11 Back.

Note 37:   These visits include the visit of Vice -President (September’96) and Prime Minister (May 1993);Minister of Tourism and Civil Aviation Shri Gulam Nabi Azad (September1993) and Minister of External Affairs Shri Jaswant Singh (September 1999) Back.

Note 38:   Information based on report by CII. Back.

Note 39:   M Abuseitova, “ Straightening India – Central Asia Cooperation: Especially Economic and Trade Relation” Paper Presented at India- Central Asia Seminar in New Delhi, September, 11-12, 2000. Back.

Note 40:   Kazakhstan in Brief, no.36, p.10. Back.

Note 41:   Ibid. p.11. Back.

Note 42:   Mamuka Tsereteli. Caspian oil in the Strategic Picture of 2020. htpp//www.times.kg/?d-articie&aid-1024391&c-&d- Back.

Note 43:   The Times of Central Asia, Jul26, 2001. 3 (30)&(125) p.7. Back.

Note 44:   Kazakhstan in Brief, n. 36, p.18-19. Back.

Note 45:   Information based on discussion at CII. Back.

Note 46:   Information based on discussion at “Round Table Conference on India-Central Asia relation” in Almaty, October 30, 2001. Back.

Note 47:   “Conference on Interaction and Confidence-Building Measures in Asia,” Kazakhstan in Brief, no, 36 p.22-23. Back.

Note 48:   Aloke Sen. Strengthening India-Central Asia Cooperation: Especially Economic and Trade Relation. Paper Presented at the India- Central Asia Seminar in New Delhi on September 11-12, 2000. Back.

Note 49:   M. Abuseitova. Strengthening India – Central Asia Cooperation: Especially Economic and Trade Relation. Paper Presented in India- Central Asia Seminar in New Delhi, September 11-12, 2000. Back.

Note 50:   “New Delhi, Moscow Developing New Trade Route Via Teheran” The Hindu, New Delhi, November 3 2000. Back.

Note 51:   Shanghai Five-Summit Declaration Text

According to the text of Shanghai five Summit Declaration “ the Sides confirm their resoluteness to fight jointly against international terrorism, religious extremism and national separation which is the main threat to regional security, stability and development and against such criminal activity as the illegal circulation of arms and drugs, illegal migration, with purpose, the Shanghai Five member states will draw up a relevant multilateral programme in the near future and will sign the necessary multilateral treaties and agreements on cooperation” The declaration mentions that “the sides view the conference on cooperation and confidence-Building Measures in Asia as a positive process in the Asian continent, guaranteeing, together with the existing structures and mechanism in Asia, additional opportunities for political dialogue on issue of regional security, strengthening mutual confidence and development of multilateral cooperation.” Back.