India and Kazakhstan deepen their strategic partnership

Jan 16, 2015 12:00 AM

In the 24 years since the collapse of the USSR in 1991, the Caucasian and Central Asian post-Soviet states have striven to strengthen their independence and economies by balancing their relations with their former colonial overlord Russia and East Asia’s rising economic superpower China.

Now a third regional rising power, India, is seeking opportunities in the post-Soviet space and is receiving a warm reception in Central Asia’s largest nation, Kazakhstan.

Since Kazakhstan and India do not share borders, both countries are making concerted efforts to step up regional cooperation to establish transport corridors. Economic relations between the pair are thriving; Kazakhstan now accounts for more than half of India’s trade with the Central Asian countries. Bilateral trade between India and Kazakhstan increased from $120 million in 2005 to $676.9 million in 2013.

While Kazakh-Indian trading contacts date back to the Great Silk Road, recently the two nations have continued to deepen their diplomatic and economic relations.

Kazakhstan-Indian diplomatic relations were formally established on Feb. 22, 1992. Kazakh independence coincided with India adopting more liberal trade policies, beginning in 1991 onwards.

In its pre-reform period, India’s trade policy was highly complex, notable for a structure of high tariff levels and non-tariff restrictions. Following independence, Kazakhstan began introducing market oriented economic reforms, starting with liberalizing prices, foreign economic activity and institutional transformations. Consequently, since 1991-1992, both India and Kazakhstan have been developing liberal trade regimes necessary for bilateral trade and investment, a hallmark of Kazakh-Indian relations from the outset.

In the first of what would become many exchanges, the same month that diplomatic relations were established, India’s then Minister of Trade and Commerce, Palaniappan Chidambaram visited Kazakhstan. His sojourn resulted in the two countries according each other most favored nation trading status, while agreements were signed to establish embassies, cooperate in science and technology, culture, sports and trade, along with a banking protocol with the State Bank of India.

Underscoring the significance he attached to the relationship, the same year that diplomatic relations were established, Kazakh President Nursultan Nazarbayev chose India to be the first country he visited outside the Commonwealth of Independent States, to be followed up by the visit of Indian Prime Minister Narasimha Rao to Kazakhstan in 1993. Bilateral diplomatic and economic visits subsequently became part of both countries’ political landscape.

Notable exchanges occurred a decade later, when in 2002 Indian Prime Minister Atal Bihari Vajpayee made a state visit to Kazakhstan, combining it with participation in the first Conference on Interaction and Confidence-Building Measures in Asia (CICA) Summit. India has been consistently and actively supporting the CICA process ever since. The same year, during his reciprocal visit to India Nazarbayev, besides his official meetings in New Delhi, visited India’s unofficial information technology (IT) capital, Bangalore.

Subsequent various delegations were designed to provide greater economic and commercial collaboration in bilateral relations, with IT, space, agriculture and food processing being identified as key areas of bilateral interest.

Transportation corridors are a high priority for the two countries. To that end, in Aug. 2014 Kazakhstan opened two new railway links intended to improving freight flows from the northern part of the country southwards. They are not small undertakings, as the two new railway links – Zhezkazgan-Beineu and Arkalyk-Shubarkol, run 750 miles. The Zhezkazgan-Beineu line is a short cut from central Kazakhstan to Kazakhstan’s Caspian Aktau port, extending further to Kazakhstan’s border with Turkmenistan and the Persian Gulf. The Arkalyk-Shubarkol line links central Kazakhstan to Russia, allowing further access to West European countries.

It is the Zhezkazgan-Beineu line, part of the Kazakhstan-Turkmenistan-Iran railway opened last month, that links Central Asia to Iran’s Bandar Abbas port on the Persian Gulf, that particularly interests India, as it will allow access to Central Asian trade, particularly Kazakhstan’s oil and uranium assets. While the first phase of the railroad envisages a capacity of 3 million tons annually, it is predicted that cargo rates will increase to 12 million tons per year.

Kazakhstan’s Ambassador to India, Bulat Sarsenbayev, sees the railway’s economic potential as but one element in deepening relations, remarking last month, “Our goal is to increase diplomatic relations, strategic partnership next year. We are going to prepare the next step in our relations. Our president is going to invite Prime Minister Modi to visit Kazakhstan. During that visit, we will sign some agreements, for investments for some trade between India and Kazakhstan.”

Beyond trade, on the diplomatic scene, besides India supporting Kazakhstan’s CICA initiative 13 years ago, India and Kazakhstan consistently support each other’s initiatives. India currently has observer status in the Shanghai Cooperation Organization and has applied for full SCO membership with the complete support of Kazakhstan. Interaction in the UN has also been close and mutually supportive. Kazakhstan has endorsed India’s efforts to obtain a permanent seat in the UN Security Council, while India supports Kazakhstan’s bid for the Security Council non-permanent membership in 2017-2018.

How India’s burgeoning interest in Central Asia will play out with Russia and China remains to be seen, but Ambassador Sarsenbayev believes that neither his country nor India should be overly concerned about China’s economic penetration of the region, but rather both nations should seek to maximize bilateral and economic contact with Beijing for the overall benefit of the peoples of the three nations. As China and India have overlapping territorial claims, including Kashmir and Arunachal Pradesh, Sarsenbayev’s optimism may be put to the test.

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