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Key Points

India and Central Asia have significant untapped economic potential that needs strengthening through better trade and investment ties. The region's strategic location as a land bridge between Asia and Europe gives it crucial geopolitical importance for India. Bilateral trade reached $1.7 billion in 2023 with Uzbekistan emerging as India's top export destination. The report recommends enhancing digital infrastructure, improving transport connectivity, and promoting joint ventures to unlock economic benefits.

Key Points: India Central Asia Trade Investment Ties Need Strengthening Report

  • Bilateral trade reached $1.7 billion in 2023 with strong expansion potential
  • Uzbekistan emerged as top export destination with 45.3% share
  • Kazakhstan dominated imports contributing 64.5% of regional total
  • India invested $1.5 billion in Central Asia from 2010-2023
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India, Central Asia need to strengthen trade and investment ties: Report

India-Central Asia trade reached $1.7B in 2023 with huge growth potential in pharmaceuticals, energy, and textiles according to India Exim Bank and EDB joint study.

"Central Asia’s strategic location as a land bridge between Asia and Europe imbues it with undeniable geopolitical significance for India - India Exim Bank and Eurasian Development Bank Report"

New Delhi, Sep 12

Central Asia’s strategic location as a land bridge between Asia and Europe imbues it with undeniable geopolitical significance for India. This partnership encompasses a broad spectrum of shared interests, including security, energy, and other economic and commercial opportunities, according to a new joint study released by the India Exim Bank and the Eurasian Development Bank (EDB).

The report titled ‘Exploring Trade and Investment Relations between India and Central Asia: Unlocking Economic Benefits’ highlights an immense untapped potential in India-Central Asia economic relations and provides actionable policy recommendations for deepening bilateral cooperation.

The report states that the bilateral trade between India and Central Asia stood at $1.7 billion in 2023, with strong scope for expansion in pharmaceuticals, machinery, textiles, petrochemicals, agribusiness, and ICT.

India’s trade relations with Central Asia underwent a significant shift in the past decade. Uzbekistan emerged as the preeminent export destination, capturing a substantial 45.3 per cent of India’s total exports to the region. Kazakhstan, while maintaining a robust presence, accounted for 35 per cent of India’s exports in 2023. Tajikistan, Kyrgyzstan, and Turkmenistan followed, with shares of 6.9 per cent, 6.6 per cent, and 6.1 per cent, respectively.

The import landscape presented a different picture. Kazakhstan was India’s primary supplier from the region, contributing over 64.5 per cent to the region’s total imports in 2023. Turkmenistan commanded a decent 21.7 per cent share. Uzbekistan contributed 10.6 per cent to India’s imports from the region, while Tajikistan and Kyrgyzstan had more modest shares of 2 per cent and 1.2 per cent, respectively.

India has invested about $1.5 billion in Central Asia (2010-2023), mainly in coal, oil, gas, renewable energy, and textiles. Sectors like renewable energy, healthcare, food processing, and logistics are emerging as priority areas.

The policy recommendations in the report include collaboration on Digital Public Infrastructure (DPI), such as joint payment systems, enhancing trade finance access for MSMEs, improving transport connectivity via INSTC, and promoting joint ventures and knowledge transfer.

With mineral resources, increasing diversification of economies, and a growing focus on regional cooperation, these landlocked nations have the potential to be integrated as important players in the global economy. The recent merchandise trade performance of these nations has been characterised by a rapid expansion of trade volumes; exports heavily concentrated in a few primary commodities; and trade partnerships limited to a few countries, the report added.

- IANS

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Reader Comments

P
Priya S
Finally some concrete policy recommendations! Digital Public Infrastructure collaboration could be a game-changer. UPI-like systems in Central Asia would make trade so much easier for small businesses. Hope they implement these suggestions quickly.
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Michael C
The trade imbalance with Kazakhstan is concerning - we're importing much more than exporting. Need to balance this relationship better. Maybe focus on value-added exports rather than just raw materials.
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Ananya R
As someone working in renewable energy sector, I'm excited about the investment opportunities mentioned. Central Asia has great potential for solar and wind projects. Indian companies should definitely explore this more aggressively 🌞
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Suresh O
The INSTC corridor is crucial for better connectivity. Current shipping routes take too long and increase costs. If we can improve transport infrastructure, trade volumes will automatically increase. Government should prioritize this.
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Neha E
While the report is comprehensive, I wish it addressed the cultural and language barriers more. Many Indian businesses struggle with understanding Central Asian markets. Need more cultural exchange programs and language training initiatives.
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David E
$1.5 billion investment over 13 years seems quite low given the potential. Indian companies need to be more bold in their Central Asia strategy. The region offers great opportunities beyond just energy sector.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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