Russia views India’s burgeoning role in Eurasia with optimism, both politically and economically and recognises its potential to fortify its trade and economic foothold in this region
Political pundits while analysing India’s foreign policy tend to examine its implementation in the Indo-Pacific region, where after the economic liberalization, the traditional cultural sphere of influence has been supplemented with economic imperatives. However, the keen interest in the Indo-Pacific maritime spaces may lead to a state of myopia, since other regions of the “extended neighbourhood” may often be overlooked.
One of them is Central Asia, which is of strategic importance for India’s security. In recent years, we witnessed an augmented political engagement in Central Asia’s political process by India, driven by the withdrawal of the American troops from Afghanistan in 2021. The increased interest is evidenced by the India-Central Asia Dialogue and the recently conducted First India-Central Asia Summit in 2022. The second meeting is anticipated to be held this year.
In 1995, an Indian-born Professor at Columbia University, Jagdish Bhagwati, coined the term “spaghetti bowl” while depicting the framework of US preferential trading arrangements. It means interweaving and complexity of economic preferences between its trade partners. Similarly, today’s political and economic landscape in Central Asia is marked by the existence of numerous formats in political and economic spheres—the Shanghai Cooperation Organization (SCO), Eurasian Economic Union (EAEU), Commonwealth of Independent States (CIS), Collective Security Treaty Organization (CSTO), Organization of Turkic states (OTS), Central Asia + formats, and some of specific mechanisms such as Regional Security Dialogue of Afghanistan and Quadrilateral and Coordination Mechanism (QCCM). At the same time, there is no mechanism which unites the five Central Asian states— Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—as a single political entity.
The current political structure confirms the enduring interest from big powers, which recognise the strategic role of Central Asia as a source of energy resources, transit routes, or culturalhub.
The socio-economic conflicts between regional countries condition the existence of the numerous formats, which precludes them from acting as pioneers for regional integration. Moreover, the current political structure confirms the enduring interest from big powers, which recognise the strategic role of Central Asia as a source of energy resources, transit routes, or culturalhub.
Russia perceives the region as a natural sphere ofinfluence.. The Concept of foreign policy of the Russian Federation of 2023 highlighted the strategic role and importance of CA states, especially in the context of regional integration and collective security—the CIS was proclaimed to be of paramount importance for security, stability, and territorial integrity of the Russian Federation. The document pays considerable attention to cooperation with India, especially focusing on expanding trade, investment, and technological ties between the two countries. In light of the prevailing geopolitical dynamics, it can be asserted that the partnership between India and Russia will be focused on several tracks—a) engagement in SCO; b). development of INSTC; c). collaboration in digital development and energy partnership; d) engagement in Afghanistan-related issues.
Nevertheless, today’s cooperation between India and Russia in Central Asia can be called “high-echelon” as it concentrates only on engagement within multilateral structures while leaving out joint economic projects.
Russia advocates for the bolstering of SCO influence, both in terms of its geographical reach through its membership expansion and its political stature by broadening the number of topics under discussion. Thus, the country supported the inclusion of India (and Pakistan) in 2017 despite China’s apprehensions and reluctance. India and Russia uphold similar ideas regarding the role of the SCO as a dialogue platform and a tool for enhancing security but at the same time, the importance of the structure in the foreign policy calculations of the two countries varies. Russia perceives the SCO as an important platform in terms of security, whereas India sees it as a tool for maintaining a political presence in the Eurasia region. The discrepancy derives from the confines of political manoeuvres in the organisation faced by India and caused by a political confrontation with China and Pakistan. Russia does not share India’s apprehensions regarding China’s dominant role in the SCO. Furthermore, some fears were voiced regarding the possible diminishment of the organisation’s efficacy, especially within the Regional Anti-Terrorist Structure (RATS), due to existential disagreements between India and Pakistan.
Russia perceives the SCO as an important platform in terms of security, whereas India sees it as a tool for maintaining a political presence in the Eurasia region.
It is widely acknowledged that China sees the SCO as a mechanism for extending its economic influence in Central Asia, but for both India and Russia, security concerns prevail. Things may change in the near future. India is now viewed as a potential counterweight to China’s economic expansion, and the inclusion of Iran as a ninth member of the SCO could potentially broaden its economic agenda, particularly concerning the development of infrastructure projects within the INSTC. In this regard, the 10-year contract to develop and equip the strategic Chabahar port inspires some optimism.
The Asian vector of Russia’s foreign policy is deeply intertwined with the formulation of a so-called “Greater Eurasian” partnership. Although the essence of the term remains somewhat opaque, particularly concerning the mechanisms of its implementation. The objectives are still articulated in an aspirational manner—to “transform Eurasia into a cohesive intercontinental realm characterized by peace, stability, mutual trust, development, and prosperity”. The concept primarily pursues economic objectives, representing a consistent advancement towards a network of free trade zones and international trade-economic alliances.
In trade and economic matters, Russia and India have two main points of convergence—collaboration within the framework of EAEU trade cooperation agreements and the development of the INSTC.
A reduction of India’s import duty due to the FTA agreement with EAEU could serve as a pivotal lever to enhance Russian exports of chemical industry products, sunflower oil, coal.
India’s trade policy exhibits a marked level of protectionism, both in terms of tariffs and non-tariff barriers. The average customs duty under the Most Favoured Nations (MFN) regime has increased from 13.4 percent to 18.1 percent from 2016 to 2022. A reduction of India’s import duty due to the FTA agreement with EAEU could serve as a pivotal lever to enhance Russian exports of chemical industry products, sunflower oil, coal. India, on the other hand, can increase exports of pharmaceuticals, agricultural products, leather goods, machinery and equipment, and textile.
However, the lofty expectations are tempered by practical realities. Firstly, amidst international pressures, the negotiations may undergo protracted delays and the outlook could be clouded by apprehensions from the Indian business community. Secondly, the trade deficit will likely increase. Thirdly, the primary concern of the inefficiency of extant trade and logistical routes. Without the solution to logistics problems, the impact of the agreement may be nominal. Moreover, the sabotage on the Nord Stream gas pipeline in September 2022 underscored the vulnerability of critical transport infrastructure, prompting calls for enhanced security assurances.
Conversely, it’s plausible that it could lead to concluding an FTA that would catalyse the development of the INSTC. Put differently, the imperatives of business interests in expanding trade volumes would propel logistical advancements, with mutual benefits serving as the linchpin for long-term project efficacy. An example of this perception may be found in the signing of the FTA between EAEU and Iran in late 2023. After the Ukrainian conflict, the interest in the projects remained unabated, displayed by the visit of India’s Foreign Minister S. Jaishankar to Iran this January and Russia’s signing of some tangible agreements with the Islamic Republic. Furthermore, the question of concluding a free trade agreement between India and the EAEU has received a new impetus as the parties have announced the resumption of talks.
After the Ukrainian conflict, the interest in the projects remained unabated, displayed by the visit of India’s Foreign Minister S. Jaishankar to Iran this January and Russia’s signing of some tangible agreements with the Islamic Republic.
Russia views the INSTC as instrumental in advancing Central, Volga, and Caspian regions, while integrating Russian ports with major international trade arteries. The corridor is poised to emerge as a viable alternative to the Suez Canal, potentially reducing delivery times and transportation costs by 30-40 percent. Politically, Russia aims to sideline non-regional actors in the Caspian region and forge a strategic counterbalance to competing projects like the Middle Corridor (TMTM) and the Transport Corridor Europe-Caucasus-Asia (TRACECA), to offset the logistic endeavors under the Belt and Road Initiative (BRI).
Russia views India’s burgeoning role in Eurasia with optimism, both politically and economically. Despite reservations surrounding India's QUAD participation, Russia acknowledged India as a crucial partner within the SCO and a significant player in the Greater Eurasian Partnership. The deepening political ties between India and Central Asian nations are mostly unnoticed by Russian political elites, while the expert community allocates relatively scant attention to India's Central Asian stance. This is attributed to India's modest trade and economic clout and a narrow pool of Russian specialists on India. Nonetheless, India's potential to fortify its trade and economic foothold in both Russian and Central Asian region is recognised. Should this materialise, it could ignite discussions on India's role as a favourable alternative to Chinese economic expansion, albeit the scale and the pattern will be determined by several factors.
Ivan Shchedrov is a Visiting Fellow at the Observer Research Foundation
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Ivan Shchedrov is presently a Visiting Fellow at Observer Research Foundation, New Delhi. He is also a research fellow at the Center of Indo-Pacific Region ...
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