Event ReportsPublished on Apr 06, 2018
India should not lag behind Beijing’s connectivity moves: Expert

Initiating a discussion on ‘Trade ties with South and Central Asia’ at Observer Research Foundation, Chennai Chapter,  Somi Hazari, International Trade Consultant, said, “for India, connectivity with South and Central Asia is actually entrenched in our history.” While China is bull-dosing forward with their efforts at connectivity, and a splattering of projects all around the world, the ‘Belt and Road Initiative’ (BRI) being their pet project, he said that Beijing was merely taking advantage of history. Purely from an economic perspective, India should not lag behind.

Hazari argued that essentially the idea that trade could be improved through better connectivity is an age-old idea. Lord Dalhousie, who was the Governor-General of British India from 1848-56, had considered an eastern rail-line from Calcutta (now, Kolkata) to Singapore and Bangkok. A decade and more later, engineers William Low and George Thomas in 1871 had put forward a proposal to British Prime Minister Gladstone for constructing a 9,500-km railway that would connect India to Baghdad via Istanbul and Alleppo. The estimated cost of this project was £ 24 million -– a mere fraction of what it would cost today, Hazari remarked.

Reaching Indian goods to Central Asia is currently very expensive. “This is because we have no option but to take very circuitous routes, owing to adversarial relations with Pakistan,” Hazari said. India needs to think seriously about how it plans to reach these parts of the world, over the medium and long terms. Central Asia lies at the junction of all the trade routes. Therefore, connectivity to Central Asia should be seen as going beyond the region and connecting to Europe as well.

In this context, Hazari said that India needs to develop a deeper understanding of Central Asian products. There is no real knowledge of the Central Asian countries and what they produce. Research should be done to fill this lack of insider’s knowledge. For instance, Hazari pointed out that it was not a well-known fact that Kyrgyzstan’s key mineral is gold. In fact, the country is one of the largest gold exporters in the region behind Russia and Uzbekistan, but their gold is branded by MNCs from other countries, and marketed in India, too.

Trilateral corridor

Hazari said India needs to shift its mind-set and see certain countries in a different light. Afghanistan needs to be seen as a gateway and a transit route from South Asia to Central Asia, which was once known as the land of a thousand cities. Today, regrettably, politics has denied it trade prospects. Many are sceptical about Afghanistan as a secure transit route, given the political instability that has plagued this region following four decades of war.

Hazari agreed that for India especially, connectivity with Afghanistan is not going to be easy because of Pakistan. However, he referred to Afghan President Ashraf Ghani’s words in Teheran, “Geography is not our destiny. With our will, we can change geography.” This was during Prime Minister Narendra Modi’s visit in 2016, when India, Afghanistan and Iran signed the Trilateral Transport and Transit Corridor Agreement, demonstrating that strong initiatives and a search for alternatives can overcome obstacles to connectivity.

The prospects for Afghanistan however are massive, with the potential to provide transit routes for energy grids, pipelines, trade and movement of people. In this regard, India should focus seriously on the Afghanistan- Iran-India land-cum sea-route.  The Chabahar port in Iran, and the transport and transit corridor will be a game-changer for India, seen as a passage for to Afghanistan and beyond, to Central Asia, Russia, and further into Europe, the speaker said.

Hazari also pointed to Turkey, which he said, had been in the news for all the wrong reasons. However, it was important to remember the country’s strategic locale, as a key gateway between Central Asia and EU. If India can connect to Turkey, then it can plug into a massive railway network that will connect into the European Union.

‘Big bully’ syndrome

Ultimately though, India needs to turn towards the immediate neighbourhood. The Silk Routes were now re-emerging. Historically, it was India that brought and promoted these trade routes through South and Central Asia –- through Afghanistan and Iran. With South Asia now deemed the least integrated region in the world, India is often seen as the self-interested big bully of the neighbourhood.

India’s trade and economic policies are seen as barriers to intra-regional trade in South Asia, particularly its non-tariff barriers and sensitive lists, Hazari said. Connectivity here is seen as the cornerstone of improving regional trade and integration. Given that India wants to be a regional power, he emphasised it ought to focus on upgrading regional connectivity, and use this to market itself as an economic gateway between Central Asia and South-East Asia. Railways connectivity could be the key to integrating this region.

Tremendous potential

The Indian Railways has played a key role in carrying both passengers and cargo across its vast territory. However, Hazari argued that India has only been looking inwards as far as railway connectivity was concerned and now it was time to look outwards. Bangladesh, Hazari said, was extremely keen to do business with Indian Railways, which he believed would benefit the south Indian states in particular.

Having recently been involved in several trade and connectivity talks, Hazari identified the Mumbai-Mediterranean corridor as the one with tremendous potential if made operational. This corridor will connect Mumbai to the Iranian port of Bandar Abbas, and then further through rail to parts of northern Iran. Owing to India’s connectivity road-blocks in the AfPak region, he felt that it was important to focus on alternatives to connect to South Asia to Central Asia.

Hazari regretted that implementation remained a problem in India. While several agreements have been signed, they remain MOUs on paper.The inescapable comparison to China only further reveals this point. China operated more than 1,700 container trains to Europe, which was plays a key role in its trade. China’s freight train to London is reported to travel 12,000 km in 18 days.

According to experts, rail transport can be six times more energy-efficient than road and four times more economical. The environmental costs associated with railways are also significantly lower. To conclude, Hazari felt that railways were India’s biggest asset and unfortunately, they were being under-utilised in its potential to connect and connect to South and Central Asia.

This report was prepared by Dr. Vinitha Revi, Associate, Observer Research Foundation, Chennai Chapter

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