How Can India and Central Asia Enhance Trade and Investment Ties?
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Synopsis
A recent study reveals the immense potential for strengthening trade ties between India and Central Asia, highlighting a $1.7 billion trade value and recommending actionable measures for enhanced cooperation. With a strategic location and diverse economies, both regions can unlock significant economic benefits.
Key Takeaways
- Central Asia's strategic position as a land bridge enhances its geopolitical significance for India.
- Trade between India and Central Asia was valued at $1.7 billion in 2023.
- Uzbekistan is the leading export destination for India.
- India's investments in Central Asia total approximately $1.5 billion.
- Key growth sectors include renewable energy and ICT.
New Delhi, Sep 12 (NationPress) The strategic positioning of Central Asia as a land bridge between Asia and Europe grants it significant geopolitical importance for India. This partnership is rooted in a wide array of shared interests, including security, energy, and various economic and commercial opportunities, as highlighted in a recent joint study 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’ emphasizes the vast untapped potential in India-Central Asia economic relations and offers practical policy suggestions for enhancing bilateral cooperation.
According to the report, the bilateral trade between India and Central Asia reached $1.7 billion in 2023, showcasing ample opportunities for growth in sectors such as pharmaceuticals, machinery, textiles, petrochemicals, agribusiness, and ICT.
India's trade dynamics with Central Asia have transformed notably over the past decade, with Uzbekistan emerging as the top export destination, accounting for 45.3% of India's total exports to the region. Kazakhstan followed closely with 35% of exports in 2023, while Tajikistan, Kyrgyzstan, and Turkmenistan contributed 6.9%, 6.6%, and 6.1% respectively.
In terms of imports, Kazakhstan was India's leading supplier, contributing over 64.5% of the region's total imports in 2023, with Turkmenistan holding a 21.7% share. Uzbekistan contributed 10.6%, while Tajikistan and Kyrgyzstan accounted for 2% and 1.2%, respectively.
India has invested approximately $1.5 billion in Central Asia from 2010 to 2023, primarily in coal, oil, gas, renewable energy, and textiles. Emerging sectors include renewable energy, healthcare, food processing, and logistics.
The report also outlines recommendations for policy collaboration on Digital Public Infrastructure (DPI), such as joint payment systems, improving access to trade finance for MSMEs, enhancing transport connectivity via INSTC, and fostering joint ventures and knowledge transfer.
With abundant mineral resources, diversification of economies, and a focus on regional cooperation, these landlocked countries possess the potential to become key players in the global economy. The report indicates that recent merchandise trade performance has shown rapid growth in trade volumes, though exports remain concentrated in a few primary commodities and trade partnerships are limited.
Point of View
It's clear that strengthening ties with Central Asia aligns with India's broader geopolitical strategy. The economic potential is vast, and with the right policies in place, both regions can benefit significantly. Our commitment to fostering these relationships is crucial for regional stability and growth.
NationPress
28/10/2025
Frequently Asked Questions
What is the current trade value between India and Central Asia?
The bilateral trade between India and Central Asia stood at $1.7 billion in 2023.
Which country is the top export destination for India in Central Asia?
Uzbekistan is the top export destination, capturing 45.3% of India's total exports to the region.
What sectors offer growth opportunities in India-Central Asia trade?
Opportunities for growth are present in pharmaceuticals, machinery, textiles, petrochemicals, agribusiness, and ICT.
How much has India invested in Central Asia from 2010 to 2023?
India has invested about $1.5 billion in Central Asia during this period.
What recommendations does the report make for enhancing trade relations?
The report recommends collaboration on Digital Public Infrastructure, improving trade finance access for MSMEs, and enhancing transport connectivity.
