Accessibility links

Breaking News

South/Central Asia: India Uses Almaty Summit To Promote Economic Cooperation

This week's Asian summit in Almaty was not only about security and the problems between India and Pakistan; economics was also on the agenda. And one of the focal points was the growing economic cooperation between India and the former Soviet countries of Central Asia.

Prague, 5 June 2002 (RFE/RL) -- When Indian Prime Minister Atal Bihari Vajpayee arrived in Almaty, Kazakhstan, for this week's Asian security summit, his country's recent problems with Pakistan were at the top of the agenda. But not far down on his list of talking points was economic cooperation with Kazakhstan and other countries in Central Asia.

In recent months, India has gone into overdrive to cement economic and bilateral ties in the hopes of sharing in the development of the region's natural resources.

Vajpayee and Kazakh President Nursultan Nazarbaev took the opportunity of the summit to sign three bilateral agreements. Nazarbaev said the agreements form the basis of what he called "real" cooperation. "Cooperation between our two states can be illustrated by my working trip to India [in February] and by the trip of our honorable guest today. We have signed documents on cooperation in oil-and-gas exploration, on exchange of pharmaceutical technologies and pharmacy, and on military exchange. And the documents signed today are the basis for real cooperation," Nazarbaev said.

Vajpayee said his country is ready to invest substantially in Kazakh oil and gas "as we did last year in the Sakhalin field of Russia."

In that deal, the Indian state-owned ONGC Videsh -- the overseas arm of the country's Oil and Natural Gas Corporation -- acquired a 20 percent stake in the international Sakhalin-1 consortium in eastern Russia for $1.7 billion.

As for Kazakhstan, "The Times of India" reported that ONGC Videsh has proposed to invest in the Kurmangazy and Darkhan exploration blocks. The Indian company is also looking to buy out the Alibekmola and Kozhasai fields if possible.

Narendra Taneja -- a New Delhi-based journalist specializing on oil and gas in India and Central Asia -- tells RFE/RL that a Kazakh delegation is expected to visit India later this year to discuss closer economic ties in which oil and gas is "likely to play a very important role."

"ONGC has been interested in Kazakhstan since 1994. That was the time when the [subsidiary] set up an office in Kazakhstan and was interested in investing in exploration and production projects in the Central Asian republic. They have since been trying very hard to acquire stakes in either producing fields or exploration blocks. And now when our Indian prime minister met Kazakhstan's president, [he] gave a proposal on behalf on ONGC, expressing interest in three different blocks in Kazakhstan in which ONGC would like to invest," Taneja said.

Indian Deputy Foreign Minister Omar Abdullah told reporters in Almaty this week that the Petroleum Ministry and ONGC Videsh officials are expected to work out details soon. He said discussions between the Kazakh and Indian delegations included the possibility of laying a pipeline through Iran as a way of bypassing Pakistan if necessary.

Kazakhstan is one of the most promising energy suppliers in the world. It has proven oil reserves ranging from 5.4-17.6 billion barrels, apart from having between 1.84 trillion and 1.98 trillion cubic meters of proven natural-gas reserves. This is according to a report released this year by the Washington-based Energy Information Administration.

Taneja said, "India produces its own oil -- mainly by ONGC -- but that takes care of hardly 30 percent of India's total requirement of oil, which means that 70 percent of crude oil that we need in the country is imported. So India's strategy now is basically to go for equity oil, which means that ONGC and other Indian companies want to go overseas to invest in oil blocks and oil assets."

Indian and Kazakh leaders agreed to promote ventures in the information-technology and drug sectors. Vajpayee confirmed his country will contribute its expertise to help Kazakhstan build a software-technology park near the southern business hub in Almaty.

Vajpayee and Nazarbaev also signed an agreement on military cooperation. Taneja said this cooperation is driven by a shared concern that both countries face a growing Islamic threat. "India faces a very serious threat from Islamic terrorism, which is originating from Pakistan. And the leadership in Kazakhstan shares India's views on that particular issue because the leadership and the country of Kazakhstan also looks upon Pakistan and Islamic terrorism as a major threat to stability in Kazakhstan. The threat is as serious for Kazakhstan as for India," Taneja said.

Taneja said India is in close contact with other countries in the region. He said New Delhi is especially keen to extend cooperation with Azerbaijan, Turkmenistan, Kazakhstan, and Russia.