How India Lost The Game In Central Asia And Why It Is Being Welcomed Back Now

New Delhi’s presence in Central Asia brings in the much required balancing factor by ensuring strategic autonomy for the regional republics against China and Russia.

– India remained passive in its engagement of the Central Asian Republics for nearly a decade, and had lost out on lucrative investments

– Renewed attempts at more pro-active engagement and involvement is being welcomed by the Central Asian Republics.

– The CARs see India as a useful balancing factor against China and Russia.

– Chinese investment especially in key countries like Kazakhstan has long surpassed that of India’s by manifolds. India has a lot of catching up to do.

Much of PM Narendra Modi’s foreign tours have been focused on recalibrating India’s lost strategic influence in its near and extended Asian neighborhood be it the Indian Ocean Region, Southeast Asia or the recently concluded Central Asian visit covering Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan and Kyrgyzstan.

It is quite an irony that India remained passive in a region which has such deep historical ties and economic relevance allowing powers like China and Russia to become dominant influences in Central Asia.

The energy-rich Central Asia – with its huge reserve of hydrocarbon and extensive hydel power, has the potential to feed the fast-paced economic growth of an energy starved India. Kazakhstan, largest of the five republics, is the biggest producer of uranium in the world and apart from having substantial oil and gas reserves. Tajikistan has huge hydropower potential and oil deposits while Uzbekistan boasts of considerable oil and gas reserves. Turkmenistan possesses world’s largest gas deposits.

Even then much of India’s strategic efforts in the region have been inadequate when compared to the focused and consistent engagement of Russia and China.

A case in point is the Ayni airbase in Tajikistan which India lost to Russia in 2010. In its quest for strategic footing in Central Asia, New Delhi has been developing the Ayni airbase – originally used by the Soviets but abandoned since the 1988-89 following withdrawal of Soviet troops from Afghanistan, since 2003. But India never made any effort towards expanding diplomatic ties with the Tajik authority during that time. As a result in December 2010, Tajikistan announced that Moscow would be the only country to use the Ayni airbase.

To control the damage, New Delhi in June 2012 launched the Connect Central Asia Policy aimed at bolstering strategic and security cooperation and long-term partnerships in energy development with the region. Even that saw little effort.

This was also the time when China was aggressively advancing in Central Asia dealing major strategic blows to New Delhi. One among them is the loss of ConcoPhillips’ share in Kazakhstan’s massive Kashagan oil field to Beijing. Although India was hopeful that Kazakhstan would approve the $5 billion sale of ConocoPhillips’s share to ONGC Videsh Limited (OVL), the Kazakhstani government in September 2013 sold an 8.33 percent stake in Kashagan to the Chinese National Petroleum Corporation (CNPC).

No wonder then, foreign policy experts have heaped a lot of appreciation and hope on the current visit by Mr. Modi. India signed a flurry of defense and energy pacts with the five Central Asian countries.

While key agreements in Kazakhstan comprised defense treaty, energy contract between NC “KazAtomProm” JSC and Nuclear Power Corporation of India Limited (NPCIL) for a renewed long-term supply of natural uranium, and launching of drilling by OVL in the Satpayev oil block of Kazakhstan where it bought 25 per cent of the block in 2011.

In Turkmenistan, PM Modi emphasized on the early implementation of the USD 10 billion TAPI (Turkmenistan-Afghanistan-Pakistan-India) project. An MoU has also been signed for cooperation in the fertilizer sector.

With Tajikistan India pledged to intensify cooperation against terrorism while Kyrgyzstan inked four agreements in defense and joint working in the field of elections.

India and Uzbekistan inked three pacts which included discussions on ways to implement the contract for supply of uranium from mineral-rich Uzbekistan signed last year for supply of 2,000 metric tonnes of the yellow cake.

Modi also discussed the need for economic integration through greater connectivity between the region and India by stepping up roles of these countries in initiatives such as the International North South Transport Corridor (INSTC) – a ship, rail and road route between India, Russia, Iran, Europe and Central Asia and the Ashgabat Agreement the transit agreement between Uzbekistan, Iran, Turkmenistan and Oman signed in 2011.

Despite this one question that looms large is will India continue to play second fiddle in the region? Chinese investment especially in key countries like Kazakhstan has long surpassed that of India’s by manifolds. Rights acquired by OVL for additive investments of about $0.5 billion in Kashagan is said to be sixteen times less than what China has spent already.

The TAPI pipeline, originating from Turkmenistan’s Galkynysh field the world’s second largest, can hugely boost India’s energy connectivity with the region. Even here China has enormous clout.

The Galkynysh gas field was developed by a CNPC-led consortium which is expected to be the sole service contractor for Galkynysh’s second development phase. Experts feel if CNPC is selected as the TAPI consortium leader – decision expected in September – it will, instead of expanding India’s influence in Central Asia, make China a determinant factor over India’s natural gas supply.

But all is not lost. Despite India’s modest investment in the region compared to other powers, New Delhi’s rising global stature as a believer of multipolar world has a lot of relevance not only for the Central Asian republics but also for the contending powers looking at expanding their influence in the region.

For the Central Asian republics, India’s re-entry into the region helps them keep their “strategic autonomy” from both Russia and China. These countries which became independent in the 1990s from the erstwhile Soviet clout have no desire for a hegemonic swap with China. India’s presence provides these countries with the much-needed balance against any exclusivity for a Russia or a China.

Take for instance the TAPI project, apparently Turkmenistan is not too willing to have China as the consortium leader of the pipeline. Ashgabat would rather have an expansion of India’s engagement in its energy sector to avoid over-reliance on Beijing.

Although China is Turkmenistan’s energy customer, it is also indebted to Beijing for the China-Turkmenistan pipeline built by China. India’s growing influence in the TAPI pipeline will provide Turkmenistan with the much-needed diversification of its energy consumption markets.

Further, there is a significant competitive undercurrent for expansion of influence in the region between major powers which is counteracted by India’s entry. Although Russia grew closer to China as a result of western sanctions, Moscow is not too comfortable with Beijing’s growing influence in a region which has traditionally been Russia’s sphere of influence.

With India as a player in Central Asia, Moscow can balance out things leading to a stronger Indo-Russian relationship, which many say could be, at the expense of a more solidified Sino-Russian partnership.

Shanghai Corporation Organization (SCO), experts feel, is a way for Russia to keep an eye on China in Central Asia. This could explain the reason why Moscow has been so eager to have India as a full member of SCO.

So despite a late re-entry New Delhi still has a leverage in Central Asia. The key for Modi’s diplomacy in the region will be continuity of engagement with all the five republics he visited.