INDIA AND CENTRAL ASIAN REPUBLICS ECONOMIC COOPERATION: AN ANALYSIS OF PROBLEMS AND POTENTIALS

Abstract

India and Central Asia have been enjoying long historical and civilizational relations since the recorded history. Due to the prominent historical links, both regions have been sharing great economic engagements as well. After coming under the imperial powers, these historical relations had been weakened and even if one says, the same had come to an end, would not be an exaggeration. With the disintegration of the former USSR, both the regions have started rediscovering each other. However, the relations between both the regions have been remained untapped and unrealized to the potentials given the internal and external dynamics. With the introduction of liberalization, globalization and privatization, Indian economy has been emerged as a potential economy. of India, it is a very peculiar situation. On the one hand, the Indian economy has growing at the faster pace but at the same time, its domestic energy is not coinciding. Moreover, India has been remained depended on Middle East Asian countries. Given, turbulence in the region, now India has been started looking towards the other regions as well. In this background, given geopolitical environment and substantial gap between production and consumption, India has been started reorienting towards the Central Asian Republics. Therefore, the present study India and Central Asia. For the first objective, Indo-CARs Economic Cooperation, the researcher has analysed the trade trends and patterns between India and CARs. The data has been taken from UNCOMTRADE database since 2000 to 2015 and have used SITC 02- digit code for all 99 commodities. It has also calculated the Hirschman Concentration also employed the gravity model to find the potential economic cooperation between both Indo-CARs. The second objective of this thesis is energy economics between India and CARs. Under this study, the researcher has examined the energy economics of India-CARs by using the empirical data from various energy database sources regarding crude oil and natural gas production/consumption as well imports and prices. The trade potential index has been measured to assess either the Central Asia will be a next future energy partner of India or not. In order to examine the third objective-geopolitical perspective, the scholar has made comparative study of China, Russia, and the U.S. with the region in terms of trade and energy cooperation and their implications for India. As far as the trends and patterns of economic cooperation is concerned, it has been found out that the trade between both the region is at the lowest ebb. The total trade between India and CARs is less than US$ 1 billion. Kazakhstan is the major trading partner of India among the CARs. The energy economics has pointed out that the total imports of oil and petroleum product by India is stood at the quantum of US$ 274 million. The comparative prices of the CARs are higher (Kazakhstan US$ 50p/b & Turkmenistan US$ 57p/b) than the other energy destinations. Thus, it is clearly indicated that CARs has not yet been a favorable energy supplier of India. However, it can be a significant energy provider of India by reducing the monopoly power of OPEC countries and other Middle East countries with competitive oil prices. The present study has also pointed out that China, Russia, and the - economic engagements with the region which have affected India energy interests in the region by introducing and implementing the various economic and energy projects. Along with the geopolitical challenges, it has also been found out that lack of connectivity and less liberalized economic policies on part of CARs are the major hurdle to realize the full potential of the economic and energy cooperation. Given these challenges, India and CARs have not been able to realize the full potential of economic and energy cooperation. However, India has been investing its investment in the direction of connectivity like INSTC and Chabahar projects. India and Central Asia have demographic dividends, large untapped markets, and institutionalized structural reforms are being putting in place. Therefore, it is anticipated that there is a huge potential for economic and energy cooperation between India and CARs.