India’s ties with Central Asia are growing stronger, thanks to the region’s key spot as a bridge between Asia and Europe. A fresh report from the India Exim Bank and the Eurasian Development Bank (EDB) dives into this partnership, spotlighting huge opportunities in security, energy, and business. Titled ‘Exploring Trade and Investment Relations between India and Central Asia: Unlocking Economic Benefits’, the study points out untapped potential in India-Central Asia economic relations and suggests practical steps to boost cooperation.
In 2023, bilateral trade between India and Central Asia hit $1.7 billion. Experts see massive room for growth in sectors like pharmaceuticals, machinery, textiles, petrochemicals, agribusiness, and ICT. Over the last decade, India’s trade with the region has shifted gears. Uzbekistan now leads as the top export destination, grabbing 45.3% of India’s total exports to Central Asia. Kazakhstan follows closely with 35%, while Tajikistan, Kyrgyzstan, and Turkmenistan make up 6.9%, 6.6%, and 6.1% respectively.
When it comes to imports, Kazakhstan dominates as India’s main supplier from the region, accounting for 64.5% in 2023. Turkmenistan holds a solid 21.7% share, Uzbekistan adds 10.6%, and Tajikistan and Kyrgyzstan contribute smaller slices at 2% and 1.2%.
India has poured around $1.5 billion into Central Asia from 2010 to 2023, focusing on coal, oil, gas, renewable energy, and textiles. Now, areas like renewable energy, healthcare, food processing, and logistics are stepping up as hot priorities for investment.
The report offers smart policy ideas to deepen these India-Central Asia ties. It calls for teamwork on Digital Public Infrastructure (DPI), like shared payment systems, better trade finance for small businesses (MSMEs), smoother transport links through the International North-South Transport Corridor (INSTC), and more joint ventures plus knowledge sharing.
These landlocked Central Asian countries boast rich mineral resources and are diversifying their economies while pushing regional cooperation. Their merchandise trade is booming with fast-rising volumes, though exports lean heavily on a few raw commodities and stick to limited partners. With the right moves, they could become key players in the global economy.
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