GROWTH AND CHALLENGES OF TRADE BETWEEN INDIA AND CENTRAL ASIAN COUNTRIES: AN EXPLORATORY STUDY

Abstract

The paper discussed the growing trade relations between India and the Central Asian countries, along with the challenges they face. It highlights that India now considers the Central Asian nations as part of its 'extended and strategic neighbourhood'. Kazakhstan, being the most economically developed country in the region, is also India's primary trade and investment partner. India's exports of goods and services to Kazakhstan and Uzbekistan exceed those to the other countries in the region. Additionally, Uzbekistan and Kazakhstan are the main sources of imports for India in the area. Except for Kazakhstan, India generally has a trade surplus with the other Central Asian countries. India's exports to Uzbekistan are more significant than to Kyrgyzstan and Kazakhstan. India has a strong trading relationship with Kyrgyzstan and Kazakhstan. The Trade Complementarity Index of India with central Asian countries is moderate. India exports more diversified products/services in central Asian countries. Even though there are good opportunities, there are still some practical challenges. Trade between India and Central Asia goes through other countries like Iran, Russia, or Azerbaijan. Each of these countries adds extra steps, paperwork, costs, and delays. High costs, rules that aren't about prices, and poor banking systems are stopping trade from growing. The International North-South Transport Corridor is a plan to connect India with Central Asia through the Chabahar Port in Iran. India is trying to increase trade with Central Asian countries by getting more investments. The India-Central Asia Dialogue has become an important way for India to build better connections in the region. Therefore, there should be constructive initiative from the governments of the region for increasing trade with India.