In 2015, focus on Central Asia
Narendra Modi deserves full credit for re-invigorating Indian diplomacy in the seven months he has been in power. However, Central Asia, crucial for India’s energy security, has missed his attention. In the new year, his Government must improve India’s standing in that region
While only time will tell the kind of influence the Modi Government will have on Indian foreign policy, there is no denying that this year has been a turning point. The Prime Minister has infused life into India diplomacy and his foreign trips, especially have helped reinvigorate Brand India. In the seven months that Mr Modi has been Prime Minister, he has placed a surprisingly significant amount of emphasis on his foreign policy. He has re-focussed our efforts in South Asia, earned plaudits for India at multilateral forums and hosted several world leaders.
However, the one area that is yet to catch his attention is Central Asia. While this is not surprising as the region has hardly ever been a foreign policy priority, it should not be relegated to inconsequence for long. India’s application for membership to the Shanghai Cooperation Organisation, a powerful regional forum, is a step in the right direction but a lot more needs to be done.
India lags behind not just China but all other major players in the region – definitely the US and Russia but also Iran and Turkey. This is despite the fact that India has civilisational ties with central Asia that go back centuries; more recently, New Delhi has also made a conscious effort towards strengthening its presence in that region.
The Government of India’s official Connect Central Asia policy was unveiled by former Minister of State for External Affairs E Ahamed at the India-Central Asia Dialogue in the Kyrgyz capital of Bishkek in June 2012. More than two year later, the policy remains more aspirational than it is in the actual.
Yet, a strong presence in central Asia is important for India for two key factors: Energy security and military security. In the first case, India currently receives almost all of its oil and gas from West Asia but given how volatile that region can be, it is a good idea to look for other suppliers. Moreover, as the country’s energy demands continue to grow, New Delhi has no choice but to tap into other sources. In this context, energy-rich and proximate Central Asia is best positioned to become India’s next big oil and gas supplier.
China faces much the same challenges (growing economy, growing population) – except that it seems to have responded to them much better, as is evident from the deep inroads that it has already made into the Central Asian energy market. Beijing’s two trillion-dollar-strong foreign exchange reserves and a ruthlessly efficient Government not encumbered by the demands of democracy, have meant it has consistently managed to out-bid New Delhi in oil deals not just in Central Asia but across the world. For example, just weeks before the dialogue in Beijing, India lost to China the world’s largest oil find in five decades – the giant Kashagan oilfield in Kazakhstan.
In November 2012, India’s state-run ONGC Videsh Limited had struck a deal with America’s ConocoPhillips to buy the latter’s 8.4 per cent stake in Kashagan for five billion dollars. However, the deal fell through in July 2013 when the Kazakh Government itself stepped in and informed ConocoPhillips that its own national oil company, KazMunaiGaz, will buy the American company’s stake for the same amount. Kazakh law allows the Government certain pre-emption rights as a result of which it has the authority to buy any oil asset for sale in the country at the price agreed on by the buyer and seller. KazMunaiGaz will now sell that stake to China National Petroleum Corp for a reported $5.3-5.4 billion.
But China is only one of India’s problems in Central Asia. What has most significantly limited New Delhi’s diplomatic efforts in that region is a stubborn Pakistan which has wholly refused India overland access to Central Asia, through Afghanistan. Ideally this would have been the shortest route for India; however, that is not to be – one of the big reasons why the ambitious Turkmenistan-Afghanistan-Pakistan-India oil pipeline project, for example, has been a non-starter.
Consequently, New Delhi has had to look for new routes that bypass Pakistan altogether. Towards that end, the North-South Transportation Corridor which connects India to the Central Asian region through Iran was envisaged as a game-changer. Initiated in 2003, this project aims to connect the port in Mumbai to the Iranian ports of Chabahar and Bandar Abbas through maritime transport, and then develop road and rail networks linking these two ports with Afghanistan and other Central Asian Republics.
Some initial progress was made in this regard – India’s Border Road Organisation invested $136 million to set up a road link from Zaranj to Delaran which was inaugurated in 2009. This 215km long road is a crucial part of what is known as Afghanistan’s garland road network that goes around the country connecting Herat to Kabul via Mazar-e-Sharif and Kandahar. But this road link apart, the North-South Transportation Corridor has mostly been gathering dust for a decade now.
In the meantime, the Chinese have aggressively built similar road and rail networks penetrating deep into the heart of Central Asian Region. The Karakoram Highway, which is under-construction in Pakistan-occupied Kashmir and stands a direct threat to India’s security interests in that region, is also essentially an extension of this plan, and so is the Gwadar port in Pakistan that is being developed as a counter-balance to the Chabahar port in Iran, located less than 200km away.