International Conference on Energy, Transportation and Economic Links in Eurasia: Emerging Partnerships, 16-17 January 2012

January 13, 2012

The Institute for Defence Studies and Analyses, India’s oldest and premier think tank, is hosting an International Conference on Energy Transportation and Economic Links in Eurasia – Emerging Partnerships” on January 16 – 17, 2012, in New Delhi. Participants from all Central Asian Republics, Mongolia, Russia, Japan, the EU, China, Turkey, Iran, the US and international organizations like the ADB are participating in this conference. The conference plans to address the following questions:

What is the strategic significance of Eurasia for India?
What are the existing and planned transport and energy corridors and how can India link up with them?
What is the strategic impact of connectivity in Eurasia?
What are the prospects for economic cooperation and development in Eurasia and how should the goals be achieved?
What is the contribution of major players like Russia, US, Japan, the EU and China?
How should regional and sub-regional organisations address the challenges of the region and work towards a better future?
What role can India play in contributing to and strengthening cooperative frameworks in Eurasia?

Background

Historically and geopolitically, Eurasia has been very important as evidenced by the Great Game and the Cold War played out between the Soviet Union and the Euro- Atlantic powers. After the 1991 dissolution of the Soviet Union, the discovery of large oil and gas fields spurred a new Great Game in this region. Central Asia witnessed a geopolitical seesaw between the United States, Russia, China and even the EU, with the earlier quest for territorial domination shifting to a competition for energy and other resources. There were rapid shifts in the region – starting with the presence of Russian legacy, succeeded by the entry of the United States, and followed by a rising China. The EU and Japan are also active today in the region. China is focusing on the development of energy resources, building trans-Eurasian pipelines and transportation networks, and extending cooperation in a number of other sectors, leveraging the complementarities between the region’s economies. Russia, China and countries in the region have signed several bilateral deals for collaborations in energy and transportation projects/ corridors while consolidating their strategic partnership in Eurasia through the Shanghai Cooperation Organisation. Countries as far as Turkey are being connected through these networks. The ADB and other international organisations have outlined a roadmap for physical connectivity in order to support economic growth in Eurasia. There are already some 14 oil and gas pipelines operational in the Eurasian region and many more are proposed. There has also been renewed interest in creation of unified Central Asian-South Asian Regional Electricity Market (CASAREM) that is supported by the CASA 1000 project, which involves Afghanistan, Tajikistan, Kyrgyzstan and Pakistan.

India and Central Asia were closely connected from Sakan, Grecian and Kushan times. The advent of the Europeans led to an attenuation and gradual disappearance of India’s historical connectivity with Central Asia, with Great Britain actively preventing contact in order to forestall Russian advance to the warm waters through Afghanistan. Due to lack of physical connectivity and low levels of bilateral trade and investments India was unable to focus sufficiently on developments in Eurasia.

India cannot afford to be insulated from its extended neighbourhood in which many crucial developments are taking place. It is time India also renewed its links and took active initiatives to examine forms of engagement and involvement in the various regional and extra-regional initiatives taking shape, going beyond TAPI and similar plans.

India is increasing bilateral cooperation with countries in the region – in hydrocarbons and energy including civil nuclear energy and uranium supply, transport and energy pipelines connectivity, space research, economic, military, education, information technology, as also in countering common security threats like religious extremism, terrorism and drug trafficking. Several Indian VVIPs have visited this region over the past few years. Indian Prime Minister visited Kazakhstan in April 2010, Uzbek President Islam Karimov paid visit to Delhi in May 2011, Defence Minister AK Antony visited Kyrgyzstan in July 2011 and Foreign Minister SM Krishna paid visit to Astana in June 2011 to participate in the SCO summit.

India’s major engagement is facilitated through ambitious project of International North South Transport Corridor (INSTC). The INSTC agreement signed between India, Iran and Russia in 2000 provides for the transit of goods through Iran and the Caspian Sea to Russia and Northern Europe. The potential will be manifold, with India, Myanmar and Thailand also getting linked by road. This will boost trade between Europe and South East Asia as well. As compared to the route through Suez Canal and the Mediterranean Sea that is currently used, INSTC is much shorter and cost-effective. The Suez Canal route takes 45-60 days whereas this route will take 25-30 days. In fact, the INSTC is 40 per cent shorter and 30 per cent cheaper. From India’s point of view, the North-South Corridor not only helps India bypass Pakistan and yet reach out to Central Asia but also enables it to transport goods at a cheaper cost to European markets.

India is interested in investing in the Chabahar Container Terminal Project as well as the Chabahar-Faraj-Bam railway project. It has proposed expanding the capacity of the port, currently working at its full handling capacity of 2.5 million tones of cargo per year from two active berths, by five times and linking it to the Iranian town of Bam with a railway line. From Bam which is on Afghan border, goods can be taken through the Zarang-Delaram road which is linked up with the garland highway connecting all major Afghan cities. The trilateral agreement between the Government of India, Iran and Afghanistan to develop the Chabahar route through Melak, Zaranj and Delaram can facilitate regional trade with Afghanistan and Central Asia, thus contributing towards enhanced regional economic prosperity.

India is also participating in the exploration of Hydrocarbons in Kazakshstan. India and Kazakstan are co-operating Uranium exploration and mining. A package of three agreements-participating share assignment agreement, carry agreement and joint operation agreement between ONGC Videsh Ltd. and National Company “Kazmunaigas” (KMG) on Satpayev exploration block was signed in April 2011.OVL has paid $13m as signing amount for 25% stake in Satpayev block . In addition it will pay $80 m as one time assignment fee to KMG. In addition OVL has committed a minimum exploration investment of $165 m and optional expenditure of $235m to the project. Agreement between India and Kazakhstan for cooperation in peaceful uses of atomic energy including fuel supply, nuclear medicine, use of radiation technologies for healthcare including isotopes, reactor safety mechanism, exchange of scientific and research information, exploration and joint mining of uranium, design, construction and operation of nuclear power plant has been signed. Engagement with Central Asia is emerging as key trend in India’s foreign policy.