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COVERSTORY (P48)

In contrast to the other twosister services, the IndianNavy is transforming itselffrom being a Buyer’s Navy tobecoming a Builder’s Navy,with the construction of state-of-the-art stealth warships.

PERFECTINGTHE ART OFDECEPTION

ISRO’S COSMIC CENTUM

PANORAMA (P10)

With the launch of the PSLV-C21, the Indian Space

Research Organisation completed its 100th mission, a

milestone in the country’s space journey.

DEF BIZ (P18)

SMERCH AMMO The Ordnance Factory Board (OFB) hassigned a Memorandum of Understand-ing (MoU) with Russian firms to manu-facture the ammunition of the Smerchrocket system.

With the commissioning of RemoteOperating Stations as part of CoastalRadar Network, it is time to thinkbeyond ‘trackable but difficult to mon-itor and identify’ targets to ones thatare extremely difficult to detect.

The Union Home Ministry has justpulled the plug on funding to non-gov-ernmental organisations by furthertightening the Foreign ContributionRegulation Act.

INTERNAL SECURITY (P60)

CULLING FOREIGN FUNDS FOCUS (P44)

MONITORING COASTS

NEW-AGE FUEL

SPECIAL REPORT (P12)

Indo-US cooperation for the exploitation of natural gas

could have a much greater impact on India’s energy secu-

rity than the Indo-US nuclear re-engagement.

ISRO

NAVY

.MIL

CRYP

TOME

.ORG

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LICENCE TOKILL?

INTERNAL SECURITY (P64)

‘Targeted Killing’ is beingincreasingly used as a tactic bygovernments the world over tocombat counter-insurgenciesalarming the Rights-activists.

EAGLE EYES FORKASHMIR (P22)After the Navy’s tender formicro-UAVs the Indian Armyhas also come up with a similartender for the Northern Com-mand.

VERSATILE RANGE(P38)Eurocopter’s Rainer Farid isconfident of the prospectsof his company in India.

BATTLE OVER THEARCTIC (P70)There is a virtual a cold waramong leading countries ofthe world over control over theArctic.

AMBASSADOR’SJOURNAL (P76)Colombian Ambassador JuanAlfredo Pinto Saavedra talksabout how his country isbuilding innovative economicdynamics with India.

WITH THEIR RICH MINERAL

RESOURCES AND STRATEGIC

LOCATION, INDIA IS SYSTEMATICALLY

INCREASING ITS STRATEGIC AND

ECONOMIC OPTIONS IN THE FIVE

CENTRAL ASIAN REPUBLICS.

STRATEGIC FRIENDSHIPDIPLOMACY (79)

geopoliticsD E F E N C E � D I P L O M A C Y � S E C U R I T Y

VOL III, ISSUE V, OCTOBER 2012 � `100

COLD WAR OVER THE ARCTIC

BEING UNDETECTABLE YET LETHAL, SHIVALIK-CLASS SHIPS CAN MEET THEINCREASING MARITIME CHALLENGES

MASTERDECEIVER

LICENCETO ELIMINATE

UPGRADINGTHE COASTAL RADARS

INFANTRYTO GET MINI UAV

Eurocopterupbeat onIndia Cover Design:Artworks

Cover Photo:US Navy

The total number of pagesin this issue is 84 with cover

EURO

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ERY.U

SGS.

GOV

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NTRA

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RECENTLY, THE Indian govern-ment announced a new policyfor the Central Asian regioncalled ‘Connect Central Asia’.The new initiative seeks to

strengthen India’s political, security, eco-nomic and cultural connections with thefive Central Asian countries, i.e. Kaza-khstan, Kyrgyz Republic, Tajikistan, Turk-menistan and Uzbekistan. Since 1992,when these republics became independ-ent from the former USSR, Indian policymakers and analysts have believed thatthe region is important because of old cul-tural and civilisational linkages; its strate-

gic location; energy resources; and tradeand economic opportunities. Traditional-ly, most of the academic work on CentralAsia was concentrated either on historicaland cultural linkages on part of the broad-er Soviet Studies. In the last two decades,some new research based on geopoliticsand geo-economics has emerged.Although a large part of the discourse isstill dominated by historians and formerSovietologists, the situation is changingsignificantly.

In the context of its location, oil andgas reserves and competition for pipelineroutes, many analysts earlier created

theories of the New Great Game in the1990s. Later, the race for military basesand the regime-change experimentsthrough colour revolutions added a newdimension to this competition. Despitethe intentions and rhetoric, India wasnever really part of any competition therein the beginning. With no direct roadtransportation access and difficult marketconditions, the region did not becomeattractive to Indian private companies. Inthe post-socialist period, economic rela-tionship with the region had also declinedconsiderably. Earlier, analysts felt that thereal competition in the region was

With increasing interplay of outside powers in the five Central Asian Republics, thanks totheir geography and mineral resources, India is systematically increasing its strategic andeconomic options. The result has been the enunciation of India’s “Connect Central Asia”

policy, writes GULSHAN SACHDEVA

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CENTRAL ASIA CENTRAL ASIA INDIA’S NEW STRATEGIC NEIGHBOURHOOD

between Russia and the US. Indi-an policy makers were more or lesscomfortable in dealing with Central Asianauthoritarian leaders. They were part ofthe former Soviet elite, with whom Indiahad been dealing with for decades. Theyhad provided stability and were commit-ted to fight religious terrorism.

Although many in India still believe inthe re-emergence of a strong Russia, asobre assessment has also been made of ascenario in which, over time, China wouldbecome a dominant player in Central Asiawhile being very friendly to Russia. As Chi-na has increased its engagement in theregion and created a huge profile for itselfthrough trade, energy deals, militaryagreements and the Shanghai CooperationOrganisation (SCO), India is watchingcarefully. Despite many positive develop-ments and fruitful diplomatic engage-ments, India is still very cautious in mat-ters relating China.

Uncertainty concerning post-2014Afghanistan has also added a new dimen-sion to India-Central Asia relations. Thefailure of the Afghanistan project posescommon security challenges but any posi-tive outcome will open tremendous eco-nomic opportunities to both India andCentral Asia. These two factors haveincreased strategic significance of theregion considerably and are perhaps rea-

s o n sfor announcing a new

‘Connect Central Asia’policy.As outlined by the Minister

of State for External Affairs EAhmed at the first India Central Asia Dia-logue in Bishkek on June 12, 2012, the newpolicy comprises 12 points:

Strengthening political relations withthe regionStrengthening strategic and securitycooperation (military training, jointresearch, counterterrorism coopera-tion, close consultations onAfghanistan)Stepping up multilateral engagement(SCO, Eurasian Custom Union)Partnership in energy and naturalresourcesStraitening cooperation in the medicalfield

Establishing a new Central Asian Uni-versity in Bishkek

Setting up Central Asian e-network withits hub in India Strengthening private partnerships in

sectors such as construction and ironand steelReactivating International NorthSouth Trade CorridorStrengthening cooperation in thebanking sector

Improvementin air connectivity

Encouraging regularacademic exchanges and

civil society contactsBuilding on its

past linkages andgoodwill, India has

already developed strongpolitical and developmental rela-

tions including a ‘strategic partnership’and an agreement on uranium trade withKazakhstan. India was among the first toopen diplomatic missions in all the fiverepublics. It regarded the region as a closepolitical partner under the concept of“extended neighbourhood”. The ‘FocusCIS’ programme of the Commerce Min-istry, however, achieved very limited suc-cess in Central Asia. At the time of theSoviet Union, Indian economic contactswith the republics of the USSR includingwith the Central Asian republics werethrough Moscow. The Soviet Union usedto be India’s major trading partner. Thenature and character of the then Indo-Soviet trade and economic relations large-ly determined relations with Central Asia.In the post-socialist period, economicrelations with the Central Asian regiondeclined considerably. Currently, the offi-cial two-way annual trade between Indiaand the region is about $ 500 million (withabout $ 300 million exports). Only Kaza-khstan accounts more than half of thistrade. A limited developmental partner-ship was established via lines of creditfrom the EXIM Bank and through capacitybuilding through Indian Technical & Eco-nomic Cooperation (ITEC) progarmme.

Immediately after the announcementof this new policy, the Tajik President

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Emomali Rahmon visited India in Sep-tember 2012 and signed six agreementsconcerning cooperation in textile indus-try, health and medicine as well as educa-tional and cultural exchanges. The strate-gic importance of Tajikistan is to be seenfrom the fact that it shares border withAfghanistan. India also helped buildingAyni air base in the country. Tajik Air hasalso decided to resume its direct air linksbetween New Delhi and Dushanbe. Boththe countries have now agreed to deepencounter-terrorism coop-eration and elevate therelations to a “strategicpartnership”.

The countries ofthis region could pro-vide good invest-ment opportuni-ties for Indianbusiness. Thisis clearlyshown byLondon-basedIndian steeltycoon Laxmi Mittal.He owns a six-milliontonne capacity steel plantin Kazakhstan employingmore than 40,000 peopleand from there it nowmainly supplies to theCIS countries and Iran.The company pro-duces up to six percent of the country’sGDP, and is one ofKazakhstan’s largestforeign investors.Under the new poli-cy, steel has been iden-tified as one of the keyareas of cooperationalong with construc-tion sector. To facilitateinvestments, coopera-tion in the bankingsector is also unveiled.

Energy competi-tion in the region is fierceas China is aggressivelybuying assets in the region.This was clearly illustrated in2005 when China outbid India toacquire PetroKazakhstan, Kaza-khstan’s third-largest oil producer withCNPC raising its bid to $4.18 billion.After trying for many years, India mayfinally be getting into the energy scenein Central Asia. In April 2011, duringthe Indian Prime Minister’s visit to

Kazakhstan, the final agreement for 25 percent stake in Satpayev block was signed.This transaction marked the entry ofONGC Videsh Limited (OVL) in Kaza-khstan’s hydrocarbon sector. The Sat-payev exploration block, located in theKazakhstan sector of the Caspian Sea,covers an area of 1482 sq. km and is at awater depth of six-Eight metres. It hasestimated reserves of 1.8 billion barrels.OVL is expected to invest about $400 mil-lion in the project and oil is expected toflow from by 2020. Kazakhstan has alsoagreed to supply 2100 tonnes of uraniumto India’s nuclear plants by 2014.

There are also some positive devel-opments in Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. In thelast 13 years, there has been lot of discus-

sion on the $7.6-billion pipeline. Therehave been some uncertainties — gas

reserves in Turkmenistan, secu-rity situation in Afghanistan,and strained relations betweenIndia and Pakistan. Still, allparties are still consideringthe proposal very seriously.This 1,680-km pipeline willrun from the Dauletabadgas field in Turkmenistan toAfghanistan, from there itwill be constructed along-side the highway runningfrom Herat to Kandahar,and then via Quetta andMultan in Pakistan. Thefinal destination of thepipeline will be Fazilka inIndian Punjab. India wasformally invited to join the

project in 2006. In April 2008,Afghanistan, India and Pak-istan signed a framework

agreement to buy gas fromTurkmenistan. Earlier this year,India and Pakistan agreed onthe principle of “Uniform Tran-sit Fee”. It means whatever tran-sit fee formula is settledbetween India and Afghanistanit would also be acceptable toPakistan. In May this year, theUnion Cabinet gave its approvalto the payment of 50 cents permillion metric British thermal

unit as the transit fee to Pak-istan and Afghanistan for thegas. Based on indices of fuel

basket, all four have alsosigned gas sale purchase agree-ment. The pipeline will have a capacity to carry 90 million

metric standard cubic metres a day of gasfor a 30-year period. If things go asplanned, the pipeline will become opera-tional by 2018. In recent months, there arereports indicating a rival pipeline projectbeing negotiated between China, Turk-menistan and Afghanistan. This mighthave pushed India and Pakistan to con-clude transit and purchase negotiations.

Although India’s current trade withCentral Asian region is small and likely toremain modest in the coming years. How-ever, importance of the region for Indiantrade should be understood in the contextof its continental trade rather than seeingonly in the context of very small regionaltrade. By 2015, India’s trade with Europe,CIS plus Iran, Afghanistan and Pakistanwould be about $500 billion annually.Even if 20 per cent of this trade were con-ducted through road, $100 billion of Indi-an trade would be passing through theAfghanistan and Central Asia. With thepossibility of this trade passing throughCentral Asia, most of the infrastructuralprojects in the region will also becomeeconomically viable. Creation of this infra-structure will create further incentives forregional and sub-regional cooperation.

Both Afghanistan and Pakistan are inthe process of implementing the Afghan-Pakistan Transit Trade Agreement (APTTA).They have agreed to facilitate the move-ment of goods between and through theirrespective territories. Pakistan has allowedAfghan exports to India through Wagahand to China through Sost/ Tashkurgan.Similarly, Afghanistan has allowed Pak-istani trucks to reach Tajikistan, Turk-menistan, Uzbekistan and Iran through itsterritories. Recently, both have also decid-ed, in principle, to include Tajikistan alsointo APTTA. At the moment, APTTA isdesigned to exclude India. If implementedproperly, however, it may create insur-mountable pressures within Pakistan andAfghanistan to open up trade across theborder with India. In recent months, therehave also been some positive develop-ments on India- Pakistan trade front. By2015, the existing customs union betweenRussia, Kazakhstan and Belarus will beconverted into Eurasian Economic Unionwith a free flow of goods, services, capitaland workforce among member statesalong with a supranational body calledEurasian Commission. Now India has tosynchronise all these developments withinits new ‘Connect Central Asia’ policy.

(The author teaches at the School of International Studies, JNU)

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