Xi offers Central Asian nations $500 mn just ahead of Central Asian leaders Summit

Contact Counsellor

Xi offers Central Asian nations $500 mn just ahead of Central Asian leaders Summit

  • Xi made the announcement at his own virtual summit with Central Asian leaders.
  • Xi also announced that China would provide 50 million doses of vaccines to the five countries.
  • He pledged to “import more quality goods and agricultural products from countries in the region” and “strive to increase the trade between the two sides to $70 billion by 2030”.

China and Central Asia

  • The Chinese have gone in a big way to make their presence in the region.
  • China is increasingly becoming more aggressive in the region and it has been a strong player because of its rising economic clout in the world stage.
  • China has been investing heavily in Pakistan in the CPEC and looking for a foothold in the central Asian region.
  • The Chinese assertiveness is the reflection of its power and its growing interests.
  • Chinese have penetrated into the region economically, militarily and with its One Belt One Road initiative, they have committed billions of dollars for the silk route project to connect China with the entire Eurasian region.
  • Central Asia is a transit area for the entire transportation route. So china has huge stakes in Central Asia in many ways.
  • All the Central Asian countries and Russia have consented to the Chinese initiatives. This is where the challenge for India arises.

India and Central Asia Relation:

  • The two regions have shared deep cultural linkages with each other over the past two millennia in terms of people to people contact, trade, and commerce.
  • Ancient kingdoms like the Kushana Empire had territory in parts of both regions.
  • Both regions had been connected through the Silk route from 3rd century BC till 15th Century AD until the sea route from Europe to India was discovered.
  • Buddhism travelled over this route from India to Central Asia and from there to West China.
  • The historical and civilizational linkages have spilled over into many areas including religion and culture.
  • Contacts between the both regions were further strengthened during the medieval ages with the advent of Islam and later with the establishment of Muslim rule in India, many of whose rulers had their origins in Central Asia.

Importance of the Central Asia Region:

  • Energy:
  • The Central Asian countries are bestowed with substantial hydrocarbon fields, natural gas and oil reserves which makes them an attractive point for investment.
  • Kazakhstan - leading manufacturer of uranium and has enormous gas and oil reserves as well.
  • Uzbekistan - rich in gas, and is a significant local producer of gold together with Kyrgyzstan.
  • Tajikistan - has enormous hydropower potential and Turkmenistan has the fourth largest gas reserves of the world.
  • Regional Security:
  • To tackle the challenges of terrorism, drug trafficking and arms smuggling.
  • Strategic Location:
  • The location of Central Asian countries makes them a bridge between different regions of Asia and between Europe and Asia.
  • It is a central point of geopolitical manoeuvring affecting India’s relations with Pakistan, China, the US, Russia and other powers in the region.
  • Commercial:
  • Central Asia offers a relatively untapped market for Indian consumer goods.
  • Indian tea and pharmaceutical industries have acquired a foothold in the Central Asian market.
  • The rapid economic development of Central Asia has sparked a construction boom and development of sectors like IT and tourism.

Suggestions for India

  • Central Asia has been called “the global chessboard,” and not without reason. India needs to work on an intricate network of relationships with the regional states while remaining mindful of the “big picture”.
  • The deepening of the traditional Indo-Russian mutual understanding has injected dynamism into Delhi’s regional strategy on the whole.
  • It is bound to have a calming effect on India’s tensions with China.
  • Delhi cannot have an effective Central Asia strategy without the cooperation of these two big powers.
  • India can use the card of regional connectivity to stimulate partnerships. The time may have come to reopen negotiations on the TAPI and IPI gas pipeline projects. Both involve Pakistan.
  • Russia is well-placed to act as guarantor and help build both these pipelines, while China too will see advantages in the normalisation of India-Pakistan ties.

Way forward

  • Central Asian countries are keen to have India as a partner as they have sought to diversify their strategic ties.
  • India cannot afford to lose any time in recalibrating its regional engagements.
  • Central Asian countries have admitted India into the Ashgabat Agreement, allowing India access to connectivity networks to facilitate trade and commercial interactions with both Central Asia and Eurasia, and also access the natural resources of the region.
  • India hosting a first-of-its-kind virtual summit with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan will also aid to strengthen India-Central Asia relations.