SCO And Its Significance

Source: The post SCO and its significance has been created, based on the article “What is SCO and what is its significance?”  published in “Financial Express” on 2 September 2025. SCO And Its Significance.

UPSC Syllabus Topic: GS Paper 2- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context: Recently, Prime Minister Narendra Modi hosted the summit meeting of the Shanghai Cooperation Organisation (SCO), which was attended by China’s President Xi Jinping, Russia’s President Vladimir Putin, and Pakistan’s Prime Minister Shehbaz Sharif.

Origins and Structure

1. The SCO traces its roots to the Shanghai Five, formed in 1996 by China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan for border security and trust-building.
2. In 2001, Uzbekistan joined, and the grouping became the SCO.
3. The organisation is headed by the Council of Heads of State. It is its top decision-making body.
4. It also operates through the Regional Anti-Terrorist Structure (RATS) to coordinate on security and terrorism-related issues.

Areas of Cooperation

1. Security – The SCO strengthens security cooperation through counter-terrorism drills, intelligence sharing, and joint action against extremism.
2. Economic Cooperation: It promotes economic connectivity through trade partnerships, infrastructure development, and energy cooperation.
3. Regional Stability: It enhances regional stability by providing a multilateral dialogue platform despite bilateral disputes among members.
4. Cultural and People-to-People Exchanges: It advances cultural and people-to-people exchanges through youth, science, and innovation initiatives.

Significance

1. Strategic Counterbalance: The SCO serves as a counterbalance to Western-led institutions such as NATO, the WTO, and the IMF.
   1. Russia and China view the SCO as a platform to project leadership in the Global South and reduce Western dominance.
   2. For Central Asian states, the SCO helps balance Russia’s traditional role in security with China’s expanding economic footprint.
2. For India, the SCO provides:
   1. Access to counter-terrorism cooperation through RATS.
   2. New initiatives such as the SCO Startup Forum and the Sub-Group on Traditional Medicine.
   3. An opportunity to deepen ties with Central Asia and maintain dialogue with both China and Pakistan.
3. In the 2025 Summit context, the SCO provides a forum where India, China, and Russia can coordinate responses to US tariffs and sanctions, explore de-dollarisation, and expand energy and financial cooperation.

Question: The Shanghai Cooperation Organisation (SCO) has emerged as a major regional grouping with growing geopolitical and economic influence. Critically examine its significance for India in the present global context.