In pursuit of economic growth and energy security, China and India share the benefit of reliable and seamless connectivity with Central Asia. To pursue this interest, Beijing and New Delhi have embarked on a major initiative to strengthen ties with five Central Asian countries. A closer look at the data reveals that despite common interests and ambitions, there are significant differences in the economic footprints of China and India in the region. China has significantly strengthened its influence in the region over the years, while New Delhi’s presence remains low-profile due to limitations in state capacity, geography, and strategic priorities.
China and India are among the world’s largest economies. Sustaining growth requires a trusted and diverse workforce access to the outside market and energy resource. As reiterated at other meetings, Central Asia has emerged as an important partner in China and India’s pursuit of economic development. tidy summit meeting In 2022, it will be realized among China, India, and five countries in Central Asia.
The total population of the five Central Asian states (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) is close to 80 million, increase Consumer demand creates business opportunities. This area is located in a geostrategically important location. connect Europe and Asia, Snuggle up close among great powers such as Russia, China, and India. Further Central Asia hold More than 4% of the world’s keys resourceoil, gas, critical materials, etc.
Against this background, Central Asian countries have the potential to become valuable trading partners, trade routes, and energy suppliers for China and India. To double these commercial opportunities, Beijing and New Delhi have launched policies aimed at strengthening ties with Central Asia.
India considers this region “its own country”.expanded neighborhood” was proposed.Connecting Central AsiaThe initiative aims to strengthen security, political, economic and cultural ties between India and Central Asia. India has pledged to cooperate with the Central Asian republic in various areas such as resources, steel production, air and land connectivity, and banking.
Similarly, China has also reached out to Central Asia to strengthen its connections with overseas markets. President Xi Jinping proposed “Silk Road Economic Belt” (SREB), a large-scale connectivity program implemented during a state visit to Kazakhstan in 2013; SREB is the land-based pillar of China’s Belt and Road Initiative (BRI), combining different forms of connectivity to deepen international relations and trade. The current number of participating countries is exceed 150, include Countries in Europe, Africa, Asia, Oceania, and the Americas.
Despite their common interests and ambitions regarding Central Asia, there are clear differences in China’s and India’s economic influence in the region.
China has strengthened its relations with Central Asia by completing various connectivity projects. Kazakhstan’s container terminal “Khorgos Gateway” opened In 2015, promote Land transportation between China and Europe. Currently, China and Kazakhstan are linked At least five oil and gas pipelines, rail mainline links, and International Border Cooperation Center. In Uzbekistan, China Railway Tunnel Group completed Kamchik tunnel in 2016. Part of the Angren Pape railway line.
China’s commitment to large-scale infrastructure projects has led to a steady increase in investment in the region. According to the tally data From Central Asia statistical and the bank authoritiesChina’s investment in Central Asia exceeded $1 billion annually from 2018 to 2023, reaching approximately $2 billion in 2023. As a result, China top Foreign investors in the region alongside the Netherlands, the United States, Russia and Switzerland. China belonged to Tajikistan the biggest Foreign investment sources for at least 5 years, and Chinese nationals investment It accounted for approximately 7% of the total direct investment inflow to Kazakhstan in 2023.
Trade relations between China and Central Asia also deepened over the years. Two-way trade between China and Central Asia more than doubles from $41 billion Close to $90 in 2018 billion This corresponds to approximately 1.5% of China’s total trade. comparable China’s third largest trading country after France partner In the EU. Until now, China top It has been a trading partner with Central Asian countries for many years. became In 2023, it will become Kazakhstan’s largest commercial partner.
In contrast, New Delhi’s footprint in the region has been characterized by partial success. In 2017 inauguration ceremony The first phase of Iran’s Chabahar port india support A connecting node that allows New Delhi to reach Central Asia via Afghanistan. 2018, New Delhi I participated According to the Ashgabat Agreement, cooperate It is working with countries such as Uzbekistan, Turkmenistan, and Kazakhstan to deepen ties between Europe and Asia. The eastern section of the “International North-South Transport Corridor”, a multi-modal logistics route connecting India and Russia, will be completed in 2022 I started operating, deliver Products via Central Asia.
Regardless of these preliminary results, India’s investment in the region is only a fraction of China’s. In 2018, direct investment flows from India to Central Asia exceeded $45 million, but slowed to around $30 million in 2023. Kazakhstan is India’s main investment destination in Central Asia, but India will not be among the top 30 sources of funding in 2023. Total inflow of foreign direct investment. India ranks slightly higher among foreign investors in Kyrgyzstan, but it lags far behind major countries such as China, Russia and the United States.
Like investment, India’s trade with the region has long been running below its potential. For example, in 2015, New Delhi’s actual trade with Central Asia was six to one-tenth of its potential. According to Calculations based on the trade gravity model. trend last Until today. From 2018 to 2023, two-way trade between India and Central Asia was approximately $1 billion to $3 billion annually, and has declined further in recent years. India’s trade volume with Central Asia will barely decline in 2023 exceeded $1 billion is less than 0.5% of India’s total trade and only a fraction of China’s total trade with the region.
The striking differences in China’s and India’s economic presence in Central Asia are rooted in three factors: state capacity, geography, and competing strategic imperatives.
From the perspective of national capacity, China Number 2 the world’s largest economy and vast finance resource You can use it freely. as what it aims for diversify that commercial root By sending people to Europe to strengthen ties with major trading partners such as Germany and France, the Chinese government can leverage their resources and rely On that large network, state-owned enterprise to embed BRI.
India is also included in this fastest The world economy is growing, but still I’ll be late behind China. When it comes to outward investment, private companies act as follows: dominant Overseas financial personnel Activities. Because such organizations are more concerned with profits than policy implementation, financial flows are drawn to developed countries rather than Central Asia. On the other hand, India’s overseas investment profile is improvenot yet catch up It rivals China in terms of scale and efficiency.
India’s state capacity challenges are further exacerbated by the tyranny of geography when it comes to Central Asia. China is a direct neighbor in Central Asia, but India has struggled to enter the market in the first place. Afghanistan and unfriendly Pakistan are located between India and Central Asia; blocking Direct access to the region.
India could potentially alleviate these challenges by participating in Chinese-funded projects. BRI is unlimited program and china I’m trying to obtain India is also participating in this. However, until now India reluctant Expand support for BRI. Meanwhile, the China-Pakistan Economic Corridor (CPEC), the flagship project of the Belt and Road, passes through Kashmir, a territory disputed between Pakistan and India, and the resulting sovereignty concerns have led to India cannot participate in Chinese initiatives. Meanwhile, India is concerned about the financial sustainability of BRI projects, further hampering New Delhi’s participation.
Simply put, Central Asia features prominently in China and India’s strategic calculations. China has a head start in terms of economic influence in the region. Given the strategic differences in Sino-Indian relations, India’s efforts regarding connectivity with Central Asia are independent of China’s.
Central Asian countries stand to benefit from this dynamic, as they can diversify their trade and investment partners and reduce their dependence on other countries such as Russia and the United States. Recognizing this opportunity, Kazakhstan has already utilize Build relationships with multiple powers to foster economic growth and independence. As China and India pursue markets and energy, other Central Asian countries may follow suit.
