India and Central Asia eye enhanced trade ties

India and Central Asia have long been associated through trade, cultural and historical ties. Trade is well established in pharma, automobiles, agriculture and also education. There is a possibility of collaboration in rare earth minerals, digitisation and trade in local currencies, amongst other things.

S. Jaishankar, minister, external affairs, has now expressed optimism of a leaders’ summit between India and the Central Asian Five (Kazakhstan, Kyrgyzstan, Tajikstan, Turkmenistan and Uzbekistan) in the near future. “India’s mutual trade with these countries is close to $2 billon and has the potential to grow exponentially,” Jaishankar said during the recently held India-Central Asia Business Council meeting, which was organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the ministry for external affairs (MEA).

“We are meeting at a time when e-commerce platforms, blockchains, cross-border digital payments, etc, are transforming the way the world interacts, trades and affects payments. India would be happy to partner on platforms like the UPI, Aadhaar or DigiLocker with our central Asian partners. Certainly, greater use of digital technologies and AI applications will help us unlock the full potential of our trade and economic ties. I would also add that it will be a great help to our tourists, students and medical travellers,” Jaishankar added.

The representatives of the five central Asian countries, who took part in the meeting, included Murat Nurtleu (deputy PM & minister, foreign affairs of Kazakhstan), Zheenbek Kulubaev (minister, foreign affairs, Kyrgyz Republic), Sirojiddin Muhriddin (minister, foreign affairs, Republic of Tajikstan), Rashid Meredov (deputy chairman, cabinet of ministers & minister, foreign affairs, Turkmenistan) and Saidov Bakhtiyor Odilovich (minister, foreign affairs, Republic of Uzbekistan). “We would hope for the resumption of talks on the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline,” said Meredov. “India is growing fast and we would like to further our trade ties with them”.

There are uncertainties of the international economy and this requires governments and businesses to work together in tandem. “There are three objectives before us,” added Jaishankar. “First, deepen the existing co-operation; second, diversify the trade baskets and, third, introduce greater sustainability and more predictability in our economic interactions. And, that means more long-term contracts and arrangements, cross investments, joint ventures and certainly sectors like energy – be it for uranium, crude oil or, even potentially, gas”.

“Trade through new multi-modal corridors is helping in the growth trajectory,” concurred Odilovich. “We have traded through India’s Mundra and Nhava Sheva ports, wherein goods are transported to Uzbekistan within 22 days. We are hosting the first Tashkent Investment Forum in June and are optimistic of trade being enhanced further”.

Closer engagements

There is also talk of trade in local currencies. “There should be closer engagements between our banks and financial sector,” Jaishankar stressed. “Some beginnings have been made in terms of opening of Special Rupee Vostro Accounts in Indian banks by central Asian banks. There have also been some discussions about the use of UPI (unified payment interface), I would certainly support that strongly, as also the steps we could take to facilitate mutual settlement of trade in our national currencies.”

Interestingly, India supplies about 60 per cent of generic medicines globally and pharmaceuticals is one of India’s most important exports to central Asia. There is a need to strengthen co-operation, especially among drug regulators. India is also looking at covering medical services, including hospitals, clinics and diagnostic centres, as also the supply of medical equipment and medical devices.

“We need to improve our connectivity, because that has been a big obstacle,” Jaishankar argued. “And, here, I am talking about land as well as air connectivity. This means there are more resources and effort in the INSTC (International North-South Transport Corridor). Greater use of Chabahar port will surely reduce travel distance and costs. We are discussing this under the Joint Working Group on Chabahar Port under the India-Central Asia platform”.