AN EVALUATION OF TRADE RELATIONS BETWEEN CENTRAL ASIAN STATES AND INDIA: A CRITICAL AND INTERPRETATIVE ASSESSMENT

International trade has become a major driver of economic development for countries seeking integration into global markets. For the Central Asian republics, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, and Tajikistan, the post-Soviet era marked a transition toward outward-looking economic strategies supported by significant natural resources and strategic geographic positioning. India, meanwhile, has emerged as a rising Asian economic power with strong growth momentum exceeding 7% in recent years, making the strengthening of trade ties between the two sides increasingly significant.

Bilateral trade between India and Central Asia from 2001 to 2021 reveals noticeable growth. According to the Trade Intensity Index (TII), trade volume expanded more than twentyfold, from 111 million USD in 2001 to nearly 2.7–2.9 billion USD by 2020–2021. Despite this expansion, India’s share in Central Asia’s exports remains relatively low at 2–3%, while Central Asia accounts for less than 1% of India’s exports, indicating that the region’s trade potential remains underutilized.

Kazakhstan stands out as the only Central Asian state with a consistently strong and rising TII value above 1, largely due to its mineral fuel exports. Other states, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, show fluctuation and weaker trade integration with India, with TII values remaining below 1. This demonstrates a structurally narrow and underdeveloped trade relationship.

Central Asian exports to India are dominated by hydrocarbons, precious stones, inorganic chemicals, and metals, while India primarily exports pharmaceuticals, machinery, electronics, and processed industrial products. This structure reflects Central Asia’s reliance on raw materials and India’s comparative advantage in manufacturing.

Several persistent structural barriers continue to hinder deeper trade integration. Geography remains a major obstacle: the absence of direct land connectivity forces India to rely on Iranian transit routes, raising transportation costs and creating logistical vulnerabilities. Furthermore, the current trade structure reinforces dependency, as Central Asia’s raw material–dependent exports contrast with India’s industrial focus. Diversification and increased value-added production would help balance the relationship. Geopolitical dynamics also shape trade outcomes, with Russia and China maintaining dominant influence in Central Asia. This limits India’s strategic economic presence, requiring stronger diplomacy and long-term engagement strategies. Institutional weaknesses, including limited financial mechanisms, coordination gaps, and insufficient marketing efforts, further restrict trade potential. Enhanced trade platforms, logistics corridors, and digital connectivity could substantially improve cooperation.

In conclusion, despite notable progress and mutual political will, trade intensity between India and Central Asia remains below its potential. To unlock this potential, both sides must prioritize direct connectivity, technology and energy-oriented investments, trade diversification, and stronger institutional and diplomatic collaboration. These steps would support regional stability, reduce the region’s overreliance on external actors such as China and Russia, and foster mutually beneficial economic outcomes.

References:
Bashimov, G. (2023). An Evaluation of Trade between Central Asian States and India: A Trade Intensity Approach. Asya Araştırmaları Uluslararası Sosyal Bilimler Dergisi, 7(1), 51–60.