India recently joined the Ashgabat Agreement
India recently joined the Ashgabat Agreement, which was instituted in 2011 to establish an international multimodal transport and transit corridor between Central Asia and the Persian Gulf.
The Ashgabat agreement:
The Agreement was first signed by Uzbekistan, Turkmenistan, Iran, Oman and Qatar in 2011. While Qatar subsequently withdrew from the agreement in 2013, Kazakhstan and Pakistan joined the grouping in 2016.
The Ashgabat Agreement came into force in April 2016.
Its objective is to enhance connectivity within the Eurasian region and synchronize it with other regional transport corridors, including the International North–South Transport Corridor (INSTC).
Benefits of joining the Ashgabat agreement:
- Facilitating trade with the Eurasian region:
Accession to the Ashgabat Agreement will enable India to utilise the existing transport and transit corridor to facilitate trade and commercial interactions with the Eurasian region.
It will synchronise with India’s efforts to implement the INSTC for enhanced connectivity.
- Operationalisation of INSTC:
The Iran-Turkmenistan-Kazakhstan (ITK) railway line will be the major route under the Ashgabat Agreement. It has also been included as part of the INSTC. Therefore, the Ashgabat Agreement and INSTC will be easily synchronized.
Thus, with Ashgabat agreement, the operationalisation of the INSTC is inching closer to becoming a reality.
A 7200 km long multi-mode network encompassing ship, rail and road routes connecting India with Russia, Central Asia and Europe via Iran.
The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road. The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran etc.
- The improved scope of Chabahar port:
With the recent commissioning of the Shahid Beheshti terminal at Chabahar port and India’s joining of the Ashgabat Agreement, a greater prospect now opens up for enlarging both the operational and practical scope of Chabahar to become a vital gateway and the shortest land route to Central Asia.
The operation of a multi-purpose terminal at Chabahar including India’s plan to build a 610 km north-south railway from Chabahar to Zahedan couldn’t have been realised unless India joined a Central Asian-led transport mechanism.
- Procuring resources from Central Asia:
Joining the Ashgabat Agreement would make it easier for India to reach out to Central Asia which houses strategic and high-value minerals including uranium, copper, titanium, ferroalloys, yellow phosphorus, iron ore, rolled metal, propane, butane, zinc, coking coal, etc.
Kazakhstan alone wants to increase its non-oil exports by 50 percent by 2025. And, without direct transport access, India cannot procure the Central Asian riches needed for its manufacturing economy.
- Enhancing commercial ties:
India’s current trade with Central Asia is minimal at a little over $1 billion and is not growing much. India’s share in Central Asia’s total trade is only about one percent.
Only by improving transport connectivity can the prospect of commercial ties with the region be enhanced.
What more needs to be done?
- India must enlarge the strategic role of Chabahar port for evolving an integrated transportation network involving both the INSTC and the proposed transit corridor to Central Asia.
- India’s connectivity approach need not be limited to increasing trade and commerce but should aim to enhance investment and services, interlinking sources of raw material, centres of productions and markets between India and Eurasia.
For example, a Free Trade Agreement (FTA) between India and Eurasian Economic Union (EAEU) could spur the unhindered flow of raw materials as well as the inflow of capital and technology through new industrial infrastructure along Chabahar and INSTC routes.