May 9, 2024

Erkinbek Kamalov

Central Asia-India energy cooperation

Central Asia-India energy cooperation can further deepen bilateral relations in 2024

The partnership between India and Central Asia has the potential to significantly bolster India's position as a leader in energy. Since 2012, India has steadfastly focused on revitalizing its engagements in Central Asia, inaugurating its 'Connect Central Asia' initiative to bolster connections in vital spheres like security, energy, and economic advancement. Central Asia offers a wealth of energy resources, encompassing crude oil, natural gas, coal, uranium, and essential minerals. This presents a substantial opportunity for India, especially given its escalating energy requirements.

Central Asian countries hold strategic and geo-economic significance for India, especially for energy cooperation. India's burgeoning energy needs, coupled with the abundant energy reservoirs of Central Asia, converge to shape India's ambitions for broadening energy ties with the region. These ambitions align with India's eagerness to explore economic prospects in Central Asia.

The region shows great potential in renewable energy capacity, production, and transportation, aligning with India's steadfast commitment to development. The expansive plains of countries like Kazakhstan and Uzbekistan provide perfect conditions for contemporary energy solutions like wind and solar power. Moreover, positioned strategically between the East and West, the Central Asian five have the opportunity to be key players in establishing and executing a future interconnected energy network. Hence, ongoing investment and involvement could yield revolutionary outcomes in the future. Additionally, nuclear energy stands out as another significant area ripe for collaboration.

Central Asia boasts abundant energy resources, encompassing both hydrocarbons and renewable energy sources. Despite this wealth, much of these resources remained largely untapped during the Soviet era. With the dissolution of the Soviet Union, Central Asia emerged as a region of significant energy potential. However, the distribution of these resources across the Central Asian States (CASs) is uneven. Kazakhstan, Turkmenistan, and Uzbekistan stand out with substantial reserves of hydrocarbons, including coal, oil, and natural gas. It is estimated that Central Asia holds around 4% of the world's natural gas reserves and approximately 3% of its oil reserves. These hydrocarbons are found both onshore and offshore, particularly in the Caspian Sea region.

The inaugural India-Central Asia Summit held in January 2022 featured a Round-Table discussion focusing on Energy and Connectivity, highlighting India's foremost concerns in the region, alongside security. As per a report from the International Energy Agency (IEA), India's energy requirements have doubled since 2000 and are projected to escalate significantly due to population and economic growth. Between 2021 and 2040, India is anticipated to experience the most substantial surge in energy demand among all nations.

India’s primary interest is increasing its energy partnership with Central Asia to meet its growing energy demands. From an energy security standpoint, India aims not only to secure its energy sources but also to diversify its import origins, thereby mitigating reliance on a handful of producers. Beyond hydrocarbons, the region holds potential as a uranium source for India's civilian nuclear programme. Additionally, Tajikistan and Kyrgyzstan present opportunities for exporting hydroelectric power, augmenting the surplus energy generated in the region.
India faces notable constraints in establishing energy linkages with Central Asia, primarily highlighted by connectivity challenges. The absence of direct land or sea routes between India and Central Asia poses a significant hurdle. Various proposals have been suggested to address this issue, with the International North-South Transport Corridor standing out as the most viable option. Leveraging the Chabahar and Bandar Abbas ports in Iran, this corridor offers a promising route to access Central Asia and beyond.
The energy resources of this region could be extremely valuable for India as it continues to move on a high trajectory economic growth path in the coming years. India has had millennia old, historical and civilizational links with this region. The synergy between India and Central Asia is evident, but the obstacle lies in efficiently transporting these resources from landlocked areas to India. Additionally, India has been sourcing yellowcake for its nuclear facilities from Kazakhstan since 2009. India is also importing uranium from Uzbekistan.
Given the wealth of energy resources in Central Asia, particularly in crude oil, natural gas, coal, and minerals, coupled with New Delhi's projected exponential increase in energy demands, discussions were marked by a noticeable sense of urgency. Central Asian expressed interest in India's "One Sun, One World, One Grid" initiative, which seeks to foster interconnected solar energy infrastructure on a global level, aligning closely with the India-France-led International Solar Alliance (ISA). To bolster energy connectivity, there is a pressing need to forge cooperation between specialized national institutions in fields such as renewable energy, information technology, digital infrastructure, and advanced technologies.

In the modern era, energy plays a pivotal role in shaping geopolitics and driving the economic landscapes of nations. Central Asia has emerged as a significant energy hub, offering an alternative source for countries such as India to meet the energy needs of their expanding populations, crucial for maintaining sustained economic development. The rising demand for natural gas is poised to fuel growth in the Central Asian oil and gas sector.

Erkinbek Kamalov