KAZAKHSTAN-INDIA RELATIONS: OPPORTUNITIES AND CHALLENGES

During the initial years of independence the primary foreign policy interests and priorities of Kazakhstan were relations with Russia, China, Europe and the US. Turkey also played a key role in the fields of social, economic and cultural cooperation because of long historical, linguistic and traditional ties and linkages between the two countries. Later on when Kazakhstan started to develop trade and economic ties with Asian countries, the focus was on Japan, China and South-East Asian countries, not India. India, however, always enjoys a special and unique position in Kazakhstan’s foreign policy in terms of broader geo-political and strategic interests. For India, as a pre-eminent regional power in South Asia seeking for global power status, Central Asia, particularly Kazakhstan, became important for security, energy, investment and other economic reasons. India does not have any direct border with Kazakhstan and is separated by Afghanistan and Pakistan. With political instability in Afghanistan, rising extremism and fundamentalism in Pakistan and growing threat of domestic terrorism India is afraid of any instability in Central Asia and rise of Islamic fundamentalism that may invigorate the separatist movement in Kashmir.

In this short article, I will focus on the evolution and development of political, security, economic and strategic relations between India and Kazakhstan; the importance of these emerging relationships, the prospects and opportunities for the future as well as the roadblocks and challenges ahead.

Genesis of India-Kazakhstan relations

Ties between India and Kazakhstan go back to pre-Soviet era. Throughout the history the peoples of Central Asia lived in natural economic symbiosis with neighboring India, Iran and China. Indo-Kazakh relations date back to 3^rd century BC. Trade between Central and Southern Asia flourished through the historical Silk Route. India was the only non-Communist developing country that enjoyed tremendous respect from the Soviet people and had close economic, political and military relations with the USSR, particularly after the death of Stalin. In 1955 Jawaharlal Nehru, the First Prime Minister of India, visited Almaty along with his daughter Indira Gandhi who herself became Prime Minister later on. Nehru was fascinated by what he described as “plenitude of resources” and was in the opinion that “almost every conceivable mineral is found there (Kazakhstan)”[1]. But as a Soviet Republic, Kazakhstan could not develop any independent relations with India rather all communications were conducted through Moscow.

For India, the concept of Central Asia is not a monolithic one and its relations with each country in the region have been developed in a unique and specific way depending on New Delhi’s foreign policy goals and security (strategic) interests as well as economic and investment interests. Kazakhstan, being the largest country in Central Asia, second largest of the former Soviet Republics, with the largest and fastest growing economy, huge reserve of oil and gas, naturally became the most important strategic partner for India in the region. Meena Sing Roy thinks that there are three factors that make Kazakhstan important to India; strategic location, economic potential and multi-ethnic and secular structure. Both India and Kazakhstan share a number of common characteristics: they are large countries by territory; they are leaders in their respective region, they are multi-ethnic, multi-religious and secular states and pursue and promote policy of peace, stability and harmonization of relations among all peoples; they participate in the US war on terrorism, share common threats and concerns of growing terrorism and fundamentalism and escalating conflicts in Afghanistan. In foreign policy, both countries pursue peaceful, multi-vector diplomacy with many commonalities of goals and interests. In trade and economic relations, there are huge opportunities and potentials for growth and development as their economies are complimentary not competitive.

Political and Security Relations

India established diplomatic relations with independent Kazakhstan in May 1992, few months after independence as a result of the collapse of the USSR. As early as February 1992 President Nursultan Nazarbayev visited India, one of the first foreign visits by the President, and during the visit a number of Protocols and Agreements were signed that laid the foundation of relations between the two counties. The Kazakh Embassy in New Delhi was opened in September 1992. Since then relations between the two countries are flourishing in the areas of trade, investment, science, technology, culture and so on. Bilateral visits at different levels have become a regular norm between these two friendly countries. In 1992, during the first visit of Indian Minister of State for External Affairs to Kazakhstan, several agreements were signed for establishing joint commissions and expanding cultural exchange programs. A technical cooperation agreement was signed and a credit of $10 million was announced. During the first visit of the Indian Prime Minister P.V Narasimha Rao in Kazakhstan in 1993, a cultural Centre in Almaty was set up and an Indo-Kazakh Joint Commission was created and it had its first meeting in New Delhi in 1993. This Commission now meets on a regular basis and deals with wide arrays of issues for continuous improvement of relations between these two friendly countries. Major breakthroughs in Indo-Kazakhstani relations occurred in 1996 when the Indian Vice President visited Kazakhstan and later on President Nursultan Nazarbayev visited India. The bilateral discussions focused on cooperation in medium and small scale industries, peaceful use of nuclear energy, Indian investments for up-gradation and modernizing of existing infrastructural facilities as well as providing training programs. Concrete areas of cooperation in space, biochemistry, pharmaceuticals ecology and solar energy were also discussed and identified. Kazakh-Indian relations further cemented after the visit of President Nursultan Nazarbayev to India in 2002. Besides discussing multilateral and regional issues and concerns about the growing conflict in Afghanistan and terrorism, the two sides focused on bilateral issues of cooperation in the areas of education, tourism, defense (military) as well as extradition treaty [2]. Kazakhstan and India also work together and coordinate policies in various international and regional forums. It is considered as a diplomatic success for Kazakhstan when it was able to bring together the two irreconcilable neighbors- Pakistan and India- at the summit of the Council of Mutual Confidence Building in Asia held in Almaty on June 4, 2002.

Kazakhstan strongly supported the Russian move to include India into the Shanghai Cooperation Organization (SCO) and at the initiative of Kazakhstan India became an Observer in 2005. Kazakhstan supports India’s quest for becoming a Permanent Member of the UN Security Council. During the recent visit to India President Nazarbayev reiterated Kazakhstan’s support for that. A Bilateral Protocol of Accession of Kazakhstan to the WTO was also signed. India supports Kazakhstan’s candidacy for membership in the ASEAN Regional Forum. India is interested in participating in the activities of the Regional Anti-Terrorist Structure (RATS), SCO Contact Group on Afghanistan and SCO Business Council, and Kazakhstan supports that [3].

In January 2009 President Nazarbayev visited India and he was the guest of honor for celebrating the Republic Day. A number of treaties and protocols were signed during this visit for further cooperation between the two countries. A Memorandum of Understanding between the Nuclear Power Corporation of India and National Atomic Company Kazatomprom JSC was signed which will bring “immense possibilities of cooperation in nuclear civil energy sector including in the mining of uranium”[4].  The two sides recommended signing agreements between the respective Ministries for cooperation in agriculture and allied sectors. It was also agreed to cooperate in research and development activities and the setting up of a Regional Research and Training Facility in Kazakhstan catering to the Central Asian region.

At the initiative of Kazakhstan, an India study center is opened at the National Library in Almaty where students and scientists can read and learn about India, its people, culture and developments. Communication network has been installed which provide telecommunication satellite of the direct air with telecommunications of India. So, the visitors can watch and listen through the direct air news of India and watch free the latest Indian films. Improved relations are also observed in the fields of tourism, education, academic exchange programs and collaboration in the areas of research and publications. According to the information from the Kazakh Embassy in India, the number of Indian tourists in Kazakhstan doubled during the last few years. More than 1000 Indian students are studying in Kazakhstan, mainly in medical colleges and universities. Kazakh universities and research institutions are regularly participating in research projects and seminars jointly with their counterparts in India. Al-Farabi Kazakh National University is cooperating with the India Central Asia Foundation and the Himalayan Research and Cultural Foundation in India.

Another positive aspect of India’s improving relations with Kazakhstan is the fact that Kazakhstan is a peaceful, multi-ethnic, multi-religious, secular state with stable political and economic system. India is keen to learn from the Kazakhstani experiences in dealing with those issues at home. Moreover, if the societies in Tajikistan and Uzbekistan are considered to be more prone to fundamentalism and religious extremism, such possibility is almost remote in Kazakhstan.

India is very much concerned about its security threats both from home and abroad particularly from Pakistan and Afghanistan. Although for the time being Central Asia is not considered as a major security threat to India, New Delhi is concerned that strengthening positions of Taliban in Afghanistan and growing fundamentalism and extremism in Pakistan and Central Asia will have negative influence on the conflicts in Jammu and Kashmir and may create further security threats for India. Currently, economic, trade and energy interests are the most important ones in India’s relations with Central Asian states but New Delhi is also interested in expanding security and military cooperation with the countries in the region. According to a treaty signed between India and Tajikistan in 2006, India built its first foreign military base in Aini (Tajikistan) where the majority of the people have ethnic bonds with Afghan Tajiks who dominate the Northern Alliance, the group that India supports. This base can be used for fighting terrorism and extremism in the region including the Taliban and Al-Qaida [5]. India is also providing military trainings for Tajik army.

Kazakhstan and India are cooperating in the military and security areas. The foundation for military cooperation was laid down in the Memorandum on Military-technical Cooperation between India and Kazakhstan signed in 2002 during the second visit of President Nazarbayev to India. Military ties between the two countries grew through joint projects such as training military officers, developing joint military-industrial projects, and establishing a partnership between the defense industries of India and Kazakhstan as important areas of cooperation. Kazakhstani specialists get trainings in the National Defense Academy of India in New Delhi as well as complete training programs at the Headquarters of Defense College in Wellington, India. India is also considered to be the most reliable partner for Kazakhstan in its drive to create a Caspian Fleet but the main stumbling block is Russia’s disapproval of such a project. There are also reports that Kazakhstan has been carrying out a number of joint projects with India aimed at modernizing and repairing the torpedoes belonging to the Indian Navy and planning to design a new torpedo called Kazy. There seems to have wide opportunities for military cooperation between India and Kazakhstan. The Indian Navy is currently equipped with hundreds of torpedoes that were produced in Kazakhstan during the Soviet era and Indian experts believe that the production of such arms could shift to plants in India, with Kazakh expertise and supervision [6].

Over the years, bilateral relations between the two countries are institutionalized and appropriate structures and frameworks are created for further cooperation. Seven bilateral Commissions and Working Groups are set up that meet on regular basis and work as driving force for rapid development of bilateral relations between the two countries.

Economic and Trade Relations

Kazakhstan’s trade with India is not large compared to Russia and China. Economic and trade cooperation between the two countries is regulated and promoted by the various bilateral treaties and commissions created during the multiple visits of high level delegations. More than 20 such bilateral treaties, agreements and protocols are in operation dealing with promotion of trade, investment and other economic relations. In 1998 the Indian Airlines and Air Kazakhstan signed an agreement and started regular flights between Delhi and Almaty. Punjab National Bank also opened its representative branch in Almaty in 1998.

2000	2001	2002	2003	2004	2005	2006	2007	2008
68	60	59	79	97	120	210	297	368

Export items to Kazakhstan from India	Import items from Kazakhstan to India
Tea Machinery and Instruments Drugs and pharmaceuticals Medical equipment, Cosmetics/toiletries Textiles, tobacco Primary semi-finished iron & steel	Iron & steel Other crude minerals-gold & silver Non-ferrous metals Machinery except electrical & electronics etc Asbestos Aluminum, wool, raw hides etc.

Numerous steps are taken for improving bilateral trades between the two countries and one of them is to hold trade expo on a regular basis. Recently, at the initiative of India Trade Promotion Organization and Indian Embassy in Kazakhstan the India Expo-2009 was held in Almaty. Over 70 small and medium businesses representing different sectors of energy, oil and gas, nuclear industry, auto-industry, IT-technologies, pharmacy, jewelry, and agriculture, metallurgical and steel-making took part in the Expo and signed contracts with their potential Kazakh partners [13].

Kazakhstan is also very important for India’s growing energy needs in future. By the first-half of this century India will be one of the top five consumers of energy. Most of India’s energy needs are now coming from the Persian Gulf countries but considering the war in Iraq and continuous tensions in the region, India is keen to explore alternate sources of energy and Central Asia and Kazakhstan can be an obvious choice. In 1997 ONGC Videsh Limited got a five-year license for exploring oil in an area of 9,085 sq. km in the Pavlodar region of Kazakhstan. During the recent visit of President Nursultan Nazarbayev to India an agreement was signed between the Kazakh National Company KazMunaiGas JSC and ONGC Mital Energy for exploration and further cooperation in the fields of oil and gas. According to this agreement the stakes of Indian companies in the Kazakhstani market will increase. The stakes of OVL (ONGC Videsh Ltd.) and OMEL (Mital Energy Limited) will increase from current 10 percent to 25 percent in Satpayev oil fields in the Caspian Sea. It is estimated that 3 oil fields there contain up to 253 million tons of deposits of oil which is equivalent to 1.85 billion barrels [14].

Kazakhstan was the fourth country, besides US, France and Russia that signed a treaty with India to supply uranium for peaceful civilian energy purposes. Under this agreement the Nuclear Power Corporation of India was authorized to import at least 120 tones of uranium from Kazakhstan annually [15].

India wants to actively participate in projects, like “Iran-Afghanistan-Pakistan-India” and “Turkmenistan-Afghanistan-Pakistan-India” for transportation but in the situation of the war in Afghanistan and the continuous tensions and conflicts in Indo-Pak relations it will be difficult to implement these projects in near future. However, one positive aspect is that despite the conflicts and animosities both India and Pakistan have common interests in unlocking the energy resources in Central Asia as they are in dire need of it. Iran can play a very important role in this equation. Considering the complex and uncertain geo-political realities in the region, India seems to be more interested in expanding relations with Russia, the old and tested ally during the Cold War. India wants to activate the North-South energy corridor by involving Russia and Moscow is interested in creating its own energy security network in the region by involving China and India and in order to reduce the role and influence of the USA.

Opportunities

Despite limited trade, investment and economic relations, India has potentials and opportunities for rapid growth of relations with Kazakhstan. There are number of positive factors that can work as driving force: the political goodwill and understanding on the part of both the countries to promote trade and investment; people in Kazakhstan have good impression about India and its people and always consider it as a friendly country; both India and Kazakhstan share common concerns for growing extremism and fundamentalism in the region and cooperate and coordinate policies in regional and international organizations. As mentioned earlier, at the Initiative of Kazakhstan India became an Observer of the SCO and Kazkahstan is lobbying to further increase the role and importance of observers. India fully supports Kazakhstan accession to the WTO and is actively lobbying for Kazakhstan’s entry into the ASEAN. India hopes and expects Kazakhstan’s help and support when it will assume the Presidency of the 56 member Organization OSCE in 2010 and acquire the Chairmanship of the powerful Organization of the Islamic Conference in 2011.

Another positive factor is that both courtiers have friendly and cooperative relations with the major players in the region: USA, Russia and China. India’s close, friendly relations with Russia and improving relations with China, the two dominant powers in the region, will help New Delhi to play an important role in Central Asia. Moreover, all these three powers share common problems of regional security and separatist movements (Chechnya, Uigur and Kashmir).

Finally, economies of India and Kazakhstan are complimentary not competitive and that will help to boost further economic cooperation between the two countries.

The major roadblock of India’s relations is the lack of geographical congruity and viable trade route. For any economic cooperation and trade expansion it is important and vital to have easy and safe route of transportation and communication. Geographically, India is not that far from Kazakhstan, rather a distant neighbor, but they are separated by the mountains and rugged terrains of Afghanistan and Pakistan, the two countries rotten by war, conflict and extremism. India is looking for alternate routes; a three-party agreement on international transit of goods between Turkmenistan, India and Iran was singed in February 1997. It will allow Indian goods to transport to Bandar Abbas in Iran and from there to Central Asia. A similar agreement was signed among Russia-Iran and India in 2000 for sending Indian goods to Russia through a “North-South corridor’. But these are not very convenient; time consuming and expensive.

Another problem is that despite the historical connections and long political and cultural ties Central Asia and for that matter Kazakhstan is an unknown territory for Indian companies and businesses. Problems and difficulties faced by some Indian companies (on the issues of contracts and payments) in Kazakhstan during the initial years created apprehensions and suspicions about the emerging unfamiliar markets not explored before. Now, one of the important tasks is to take measures and initiatives for confidence building among the companies and businesses in both countries. Problems like proper banking channels and convertibility of currencies further complicate the situation.

India will have to balance its relations with other major actors in the region. India certainly cannot and will not compete with Russia for influence in the region; either economic or political. India may not undertake any project that will upset Russia, like the project of modernizing the Caspian Sea Fleet. Moreover in case of deteriorating relations between Kazakhstan and Russia, Indian interests in Kazakhstan may be affected.

India will have to develop and pursue its strategic goals and objectives in Central Asia by taking into consideration of China’s interests as well. India cannot compete with China for a number of reasons: China has direct territorial linkages with Central Asian countries; the volume of Chinese trade and investment in Kazakhstan is much higher than that of India. Most of China’s trade with Kazakhstan is done through the Xinjiang province, neighbor of Kazakhstan. Only the trade with Xinjiang accounted for 73% of China’s national trade with Kazakhstan in 2004 [16]. Compared to Chinese investment in Kazakhstan, Indian investment is very insignificant [17]. Although India is improving its relations with China, a potential Indo-Chinese rivalry in South and Central Asia may not be rejected. When China built a naval port on the Arabian sear in Baluchistan, Pakistan that connects Central Asia and Afghanistan with the outside world, India immediately responded by building a port at Chahbahar, Iran that links Central Asia and Afghanistan with the Persian Gulf [18]. India is seeking for a long term strategy of exerting influence in Central Asia through Afghanistan and Tajikistan. India maintains close, friendly relations with the regime in Kabul. At the initiative of India, Afghanistan became the 8^th member of the South Asian Association for Regional Cooperation (SAARC). Indian strategists know it very well that their road to Central Asia lies through Afghanistan.