India-Central Asia Relations – Significance & Challenges – Explained Pointwise

How have India-Central Asia relations evolved?

What is the significance of the Central Asian Region for India?

1. Geostrategic Significance: Situated at the heart of Eurasia, Central Asia acts as a land bridge connecting Europe and Asia. Its stability is crucial for India’s extended neighbourhood policy, particularly amid China’s Belt and Road Initiative (BRI) and Russia’s regional influence.
2. Energy and Mineral Security: The region is rich in hydrocarbons, uranium, and rare earth elements. Kazakhstan is a leading uranium producer, and Uzbekistan has significant uranium reserves. Turkmenistan’s natural gas reserves are vital for India’s energy diversification strategy. Initiatives like the TAPI pipeline, though stalled, reflect India’s long-term energy engagement.
3. Security Cooperation: Terrorism, drug trafficking, and radicalization are shared concerns, especially following the Taliban’s return to power in Afghanistan. Joint efforts in counterterrorism, intelligence sharing, and military exercises (DUSTLIK, KAZIND) enhance regional security collaboration.
4. Trade and Investment Potential: Bilateral trade between India and Central Asia reached around $1.7 billion in 2023, up from $500 million in 2010, with pharmaceuticals leading exports and Kazakhstan as the main source of imports. Since 2010, India has invested about $1.5 billion in the region, mainly in coal, oil, and gas, though investment from Central Asia to India remains limited.
5. Cultural and Soft Power Influence: India has strong cultural and spiritual ties with Central Asia through shared Sufi and Buddhist heritage. It promotes its soft power using cinema, cuisine, yoga, and traditional medicine, while initiatives like Project Mausam strengthen cultural and maritime connections in the region.

What initiatives has India undertaken to strengthen its relations with the Central Asian countries?

1. Connect Central Asia Policy (2012): India launched the policy to strengthen political, economic, cultural and strategic ties with the five Central Asian republics. It focuses on connectivity, energy cooperation, trade, capacity building, education, technology and people-to-people contacts.
2. India-Central Asia Dialogue (2019): A Foreign Ministers-level institutional mechanism was established to promote cooperation in political, economic, security, cultural and development-related spheres.
3. India-Central Asia Summit (2022): India institutionalised a leaders-level summit mechanism, along with regular meetings of Foreign Ministers, Trade Ministers, Culture Ministers and National Security Council Secretaries to set long-term cooperation priorities across trade, security, and technology.
4. Connectivity and Trade Corridors:
   • International North-South Transport Corridor (INSTC): Launched with Iran and Russia in 2000, now expanded to include Central Asian countries, facilitating cargo movement and reducing trade costs.
   • Chabahar Port: India has invested in developing the Shahid Beheshti Terminal at Chabahar Port in Iran, providing a sea-to-land transit link to bypass Pakistan and connect directly with Central Asian markets.
   • Ashgabat Agreement: India, along with all five Central Asian Republics, is a party to this agreement, promoting multi-modal transport networks to enhance connectivity.
   • TAPI Pipeline: India remains involved in discussions around the TAPI Gas Pipeline (Turkmenistan-Afghanistan-Pakistan-India) and joint exploration efforts in the Caspian Sea basin.
5. Economic and Technological Collaboration:
   • Trade and Investment: Bilateral trade between India and Central Asia reached approximately $1.7 billion in 2023, with potential for growth in sectors like pharmaceuticals, information technology, and agriculture.
   • Development partnership: India has offered a $1-billion Line of Credit for priority projects in connectivity, energy, IT, healthcare, education and agriculture, besides High Impact Community Development Projects.
   • India-Central Asia Business Council (ICABC): Established in 2020 to strengthen business-to-business linkages, investment and trade, particularly involving SMEs.
   • Digital Public Infrastructure: India has offered assistance in developing Digital Public Infrastructure (DPI) based on India Stack and agreed to establish an India-Central Asia Digital Partnership Forum.
   • Capacity Building: Through the Indian Technical and Economic Cooperation (ITEC) program, India offers training and scholarships in various fields, enhancing human resource development in Central Asia.
6. Defence and Security Cooperation:
   • Strategic Partnership Agreements (SPA): Signed with Kazakhstan, Tajikistan, and Uzbekistan to deepen defence and trade ties.
   • Joint Military Exercises: India conducts regular bilateral exercises focused on counter-terrorism and mountain warfare, including KAZIND (Kazakhstan), DUSTLIK (Uzbekistan), and KHANJAR (Kyrgyzstan).
   • NSA-Level Consultations: Institutionalized dialogue on counterterrorism, Afghanistan, and regional stability.
   • Multilateral Engagement: India leverages platforms like the Shanghai Cooperation Organization (SCO), Conference on Interaction and Confidence-Building Measures in Asia (CICA), and DAKSHIN (Global South knowledge exchange) to maintain continuous engagement with Central Asian countries.
7. Science, Innovation & Critical Minerals:
   • Rare Earth Forum: The first India-Central Asia Rare Earth Forum was held in September 2024 in New Delhi, focusing on joint exploration and cooperation in critical minerals.
   • Space Technology Cooperation: Collaborations in space technology and innovation enhance strategic and economic ties between India and Central Asia.
8. Cultural Diplomacy:
   • Youth Exchange Programs: India hosted the 3rd Central Asian Youth Delegation from 22nd to 28th March 2025, fostering youth collaboration and cultural exchange.
   • Cultural Centers and Initiatives: Promotion of Indian cultural centers, Sanskrit chairs, and youth exchange programs strengthen people-to-people connections.

What are the challenges facing India-Central Asia relations?

1. Geography and Connectivity: India has no direct land border with Central Asia and depends on third countries for access. Transit through Iran’s Chabahar port is subject to geopolitical disruptions, US sanction regimes on Iran, and regional instability. The International North-South Transport Corridor (INSTC) faces operational bottlenecks due to missing rail links, fragmented customs processes, and banking limitations tied to sanctions on Iran and Russia.
2. Low Trade Volumes: Bilateral trade is around $1.7 billion in 2023, far below China’s $100 billion with the region. High logistics costs, tariff barriers, and banking challenges restrict growth.
3. Chinese Dominance: China has emerged as Central Asia’s major economic and infrastructure partner. China’s Belt and Road Initiative (BRI) and CPEC investments in Central Asia are faster and larger, overshadowing India’s presence.
4. Afghanistan instability: Political instability, terrorism and humanitarian concerns in Afghanistan create security risks and complicate India’s connectivity with the region.
5. Russia-Ukraine conflict: The conflict has disrupted established trade and connectivity routes and complicated the geopolitical balance in Central Asia, where Russia remains an important security partner.
6. Stalled Energy Infrastructure: Trans-regional projects designed to supply energy to South Asia, such as the TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline, remain largely stalled due to security issues and geopolitical friction along the transit route.
7. Low Private Sector Awareness: Indian private companies often view Central Asia as a high-risk market due to unfamiliar legal/bureaucratic environments, language barriers (Russian/Turkic dominant), and opaque regulatory frameworks.
8. Limited People-to-People Links: Compared with India’s relations with some other regions, cultural, educational, tourism and business exchanges with Central Asia remain relatively underdeveloped.
9. Financial and Banking Gaps: Lack of direct banking channels hampers trade, remittances, and currency conversion. Joint financial working groups are still in early stages.

What should be the way forward?

1. Enhance Connectivity: Make INSTC and Chabahar Port fully operational, develop multimodal transport corridors, digitize customs processes, and encourage full participation of Turkmenistan and Uzbekistan to strengthen regional links. Institutionalize Chabahar Port within the broader INSTC architecture, encouraging Central Asian states to utilize dedicated Indian terminal facilities (like the Shahid Beheshti Terminal) for their maritime trade. 
2. Institutionalize Summit Diplomacy: Regularize the India-Central Asia Summit at fixed intervals (not ad hoc) to maintain momentum and ensure follow-through on commitments. Strengthen NSA-level and Foreign Ministers’ Dialogue mechanisms for continuous security and connectivity coordination. Expand diplomatic footprint by opening more embassies, consulates, and cultural centers to match engagement depth with China/Russia.
3. Secure Energy and Minerals: Resume TAPI pipeline discussions once Afghanistan stabilizes, collaborate on rare earth exploration, and ensure long-term uranium supply agreements with Kazakhstan to support India’s energy and strategic needs.
4. Strengthen Financial and Trade Links: Create a joint financial connectivity group, promote rupee settlements and digital payments, and enhance business-to-business engagement through the India–Central Asia Business Council (ICABC).
5. Negotiate a Preferential Trade Agreement (PTA): Fast-track PTA negotiations with the Eurasian Economic Union (EAEU) and targeted bilateral trade deals with key partners like Kazakhstan and Uzbekistan to lower tariff bottlenecks.
6. Promote Digital Cooperation: Share India Stack and digital governance solutions, roll out pilot Digital Public Infrastructure (DPI) programs, and deepen collaboration through the India–Central Asia Digital Partnership Forum.
7. Develop Human Capital: Expand ITEC scholarships, vocational training, and medical fellowships, while supporting Indian university campuses and joint research initiatives to build skills and promote innovation.
8. Enhance Security Cooperation: Institutionalize NSA-level consultations, conduct joint training in counterterrorism and cybersecurity, and use platforms like SCO and bilateral mechanisms to address regional security challenges.
9. Deepen Cultural and Trade Ties: Strengthen cultural centers, Sanskrit chairs, and youth exchange programs, hold regular Culture Ministers’ Meetings, and expand trade and investment in sectors like IT, pharmaceuticals, tourism, and energy.
10. Adopt a balanced geopolitical approach: India should maintain constructive relations with Russia, China, Iran and Central Asian republics while safeguarding its own strategic autonomy and regional interests.