Sino-Indian Relations: Competition or Co-operation in Central Asia?

By Amitha Rajan

China and Pakistan: the world's highest border crossing. Photo by Pamir Times

China and Pakistan: the world’s highest border crossing. Photo by Pamir Times

Central Asia is emerging as a region that could test the influence of India and China. Although New Delhi is following Beijing’s lead and expanding into this resource-rich and strategically important region, it is set to play second fiddle.

In a move to improve its access to Central Asia, the Indian government – after a decade of unwarranted red tape – approved a plan to develop the Chabahar port in Iran. India plans to lease two berths for ten years at the port and invest $85 million to develop the berths into container and cargo terminals.

Chabahar will provide India access to Afghanistan and Central Asia, thus allowing it to bypass Pakistan – an attractive prospect at a time when relations between New Delhi and Islamabad are frosty. Iran, Afghanistan and India have also signed an agreement under which Indian goods travelling to Central Asia will be given preferential treatment.

While New Delhi would need to invest a lot more than $85 million to reap tangible benefits from Chabahar – given that India will need a very expensive railway line that connects Chabahar to Zaranj in Afghanistan to then link up with the already built Delaram-Zaranj highway – the investment is a welcome step. The absence of a direct land link to Central Asia has severely hampered India’s prospects there. This disadvantage compared with China means that New Delhi is light years away from matching China’s pervasive presence in the region. Indeed, compared with China’s 2012 trade of nearly $46.5 billion with the five Central Asian Republics, India’s trade was a paltry $746.3 million for 2012-2013, or less than 2 per cent of Beijing’s trade, based on data from the Export-Import banks of both countries.

New Delhi has tried to bridge this gap. In 2012, it unveiled its ‘Connect Central Asia’ policy in an effort to strengthen its economic and political ties and revive its historical bonds with the five Central Asian Republics. Energy partnerships are an integral part of this policy, particularly the Turkmenistan-Afghanistan-Pakistan-India or TAPI pipeline project that has long been in the works. State-run companies from all four countries recently agreed to create a firm that will be tasked with attracting investment for the development of the natural gas pipeline – a project estimated to cost about $10 billion.

The ‘Connect Central Asia’ policy also envisages co-operation in regional security, mainly over shared concerns such as drug-trafficking and religious extremism. India has Joint Working Groups on Counter-Terrorism, with Kazakhstan, Tajikistan and Uzbekistan to facilitate such activity. Concerns over security have assumed a greater significance with the US and British troops withdrawing from Afghanistan. Indeed, Tajikistan – where New Delhi helped upgrade the Ayni airbase and which shares a long and porous border with Afghanistan – in September agreed to increase its security co-operation with India.

Given the similar goals that India and China share in Central Asia, New Delhi is bound to compete against Beijing for greater influence. Last year, India learnt the extent of China’s influence in the region the hard way, when ONGC Videsh Ltd – which had agreed to buy ConocoPhillips’ 8.33 per cent stake in Kashagan, Kazakhstan’s largest oilfield – lost the deal to China National Petroleum Company after Kazakhstan’s state-owned oil and gas company KazMunaiGas exercised its right of refusal. One senior official at KazMunaiGas highlighted his country’s pragmatism: “We are already linked to the Chinese: they are our partners, and they are our customers.” Even the successful headway India has made in the region has been in China’s shadow. China had offered a credit facility of 60 million euros to Iran last year to refurbish Chabahar, even though it is already developing the Gwadar port in Pakistan that is a little over 70 kilometres away. Had Iran accepted, India would not have gained even this small foothold in the region. Mindful of this reality, New Delhi expedited its talks with Iran and the approval of its investment.

It is inevitable that two of the world’s most populated countries will compete with each other in their quest for resources. At the same time, India has much to gain by co-operating with China in Central Asia, given their common security concerns. India’s desire for closer co-operation in this area is highlighted by its formal application to join as a full member of the Shanghai Cooperation Organisation (SCO). India currently holds only observer status in this traditionally Central Asia-focused organisation, but SCO members agreed to expand the organisation at the most recent summit in September. If its bid is successful, India could expand its economic prospects in the region, and it could better collaborate with other SCO members over common security concerns in a multilateral framework, most notably via the SCO’s Regional Counter-Terrorism Structure in Tashkent. With the drawdown of Western troops in Afghanistan, the spillover of militancy is a concern for all members of the SCO, including India. New Delhi and Beijing could work together to address these concerns, as they have at bilateral and trilateral levels with regard to the future of Afghanistan’s security.

The strides India and China have made in their bilateral relationship could prove useful in their co-operation elsewhere. Under Narendra Modi and Xi Jinping, trade relations between the two countries have shown signs of improvement. And although border skirmishes continue, New Delhi recently appointed National Security Adviser Ajit Doval as a special envoy on China to resolve this issue. While the settlement of this long-standing dispute will certainly take time, a move towards the negotiating table is encouraging.

Years of indeterminate strategy towards the Central Asian Republics mean that India’s best shot at playing an active role in the region is to co-operate with China and strengthen its position in multilateral forums such as the SCO. There is no doubt that China will continue to eclipse India in influencing the geopolitics of this region.


Amitha Rajan is a former journalist and editor. She recently completed a master’s degree in International Studies and Diplomacy from the School of Oriental and African Studies, London. You can follow her at @amitha_rajan



5 thoughts on “Sino-Indian Relations: Competition or Co-operation in Central Asia?

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