India–Central Asia Connectivity

India’s External Affairs Minister Dr. S. Jaishankar emphasized the need to invest more efforts and resources into improving connectivity with Central Asia. The remarks were made during the India–Central Asia Business Council meeting ahead of the 4th India–Central Asia Dialogue (2025). Key focus areas included Chabahar Port, the International North-South Transport Corridor (INSTC), and the use of national currencies for trade settlement.

India–Central Asia Connectivity: Strategic Imperatives and Challenges

• Geopolitical Relevance: Central Asia lies at the intersection of Russia, China, Iran, and South Asia—vital for regional balance and energy security.
• Energy and Resources: Rich in hydrocarbons, uranium, and minerals; key to India's energy diversification strategy.
• Connectivity Corridor: Acts as a bridge between South Asia and Eurasia via Iran (Chabahar) and Afghanistan.

• Chabahar Port
  • Gateway to Afghanistan and Central Asia bypassing Pakistan.
  • India is developing the Shahid Beheshti terminal.
  • Forms a key link to the International North-South Transport Corridor (INSTC).
• International North-South Transport Corridor (INSTC)
  • A 7,200 km multi-modal network linking Mumbai–Chabahar–Iran–Caspian Sea–Russia–Europe.
  • Reduces freight time and cost compared to traditional Suez route.

• India–Central Asia Dialogue (4th edition in 2025).
• India–Central Asia Summit held in virtual mode (January 2022).
• Engagement through SCO, Eurasian Economic Union (EEU) dialogues.
• Recent progress: Rupee Vostro Accounts opened by Central Asian banks in India.

• Trade volume: $2 billion (2024) – not reflective of potential.
• Push for:
  • Mutual settlement in national currencies
  • Use of Unified Payment Interface (UPI)
  • Expansion of Special Rupee Vostro Accounts
  • Closer ties between banking sectors of both regions.

• Regional developments such as India’s Operation Sindoor and outreach to the Taliban in Afghanistan shape the security architecture.
• Common challenges include:
  • Terrorism and extremism
  • Narcotics trafficking
  • Chinese strategic expansion through Belt and Road Initiative (BRI)

Challenges:

• Lack of direct land access to Central Asia due to Pakistan’s obstruction.
• Slow progress on multimodal corridors like INSTC.
• Geopolitical instability in Afghanistan post-2021.
• Competition from China’s Belt and Road Initiative (BRI).
• Inadequate logistics, banking, and regulatory harmonization.

Way Forward:

• Fast-track Infrastructure Projects:
  • Operationalize all INSTC links with support from Russia, Iran, and Central Asian republics.
  • Speed up completion of missing Chabahar railway links.
• Institutional and Financial Reforms:
  • Operationalize UPI and Rupee trading mechanisms with all Central Asian states.
  • Establish a regional development bank or special fund for India–Central Asia projects.
• Security and Political Coordination:
  • Collaborate on intelligence sharing and counter-terrorism with Tajikistan and Uzbekistan.
  • Re-engage Afghanistan through regional formats involving Iran, Russia, and CARs.
• People-to-People & Educational Engagements:
  • Scholarship and capacity building programs under ICCR and ITEC
  • Promote cultural diplomacy and soft power
• Leadership Summit Institutionalization:
  • Convene a regular India–Central Asia Leadership Summit to set strategic agenda.