India’s economic miracle will largely depend on the sources of energy it can draw on in the years and decades to come. Since almost every other country is jockeying for an access to reliable and cost-worthy sources of energy, India will have to build, rapidly, on its present set of engagements with potential supplier countries. The fledgling cooperation with the Central Asian Republics (CARs) becomes not only critical but imperative for India’s quest for energy security.

Three of the five CARs — Kazakhstan, Turkmenistan and Uzbekistan — are rich in oil and natural gas. It is estimated that Kazakhstan has crude oil reserves between 30-40 billion barrels, while Turkmenistan and Uzbekistan have about 600 million barrels, each. Natural gas production in Kazakhstan and Turkmenistan is about 2.83 trillion cubic metres, while in Uzbekistan it is about 1.84 trillion cubic metres.

The potential for cooperation between India and the CARs is immense but unfulfilled due to various reasons. Political differences, fierce competition and lack of direct communication are some of the major impediments to India-Central Asia cooperation gaining momentum. Desperate attempts by several players like the US, China, Russia to fill up the vacuum created by the disintegration of the Soviet Union have added to the complexity of the power politics.

Though several external players are active in the region, India’s primary concern is China’s growing influence. It impinges on India’s long-term energy interest. China is the second largest energy consumer in the world and since domestic production is unable to fuel its booming economy, it has been actively looking for diverse sources of supply across the world.

Driven by similar desires and needs, India and China today face each other on the energy-rich grounds of Central Asia. So far, China has gained ground. In 2005 India’s ONGC lost out to China’s CNPC to acquire PetroKzakhstan; it was a severe blow to India’s energy quest. China has further strengthened its foothold in the region with the completion of the Kazakhstan-China pipeline in 2006.

India has not lost the game, yet. It has some critical advantages over China. Unlike China, India has no border conflict with these Republics. At the same time the relations between India and Central Asia goes back to centuries. Unresolved border issues with China are source of scepticism in the region. These are few factors favourable for India to create an enduring economic cooperation with the CARs vis-à-vis China.

There is a growing realisation in India and China that both will benefit from cooperation in energy security albeit both sides agree that “competition will be there where the market dictates”. Both sides see benefits in joint ventures while bidding for foreign oil projects. There are some worthy precedents of such India-China joint endeavours like in Iran, Sudan and Syria.

India’s inclusion as an observer in the Shanghai Cooperation Organisation (SCO) is a positive signal for greater cooperation. SCO provides both these countries a common platform to identify avenues for cooperation in the region. It is obvious that both China and India especially concerned with the rising oil price, see economic benefits in cooperating, and not competing, with each other.

China would prefer to cooperate with India in the region for an Asian transport route than allow western dominance in this sector. India-China cooperation in developing an Asian transport route would in the long run help in strengthening the future of Asian energy security needs, which is of vital significance to both these booming Asian economies. Conflicts among these two Asian economies would pave the way for other external powers to consolidate their position in the CARs.

China sees CARs’ pipelines coming under the domain of western influence as a threat to its own accessibility to the region’s wealth. It is this strategic consideration that is encouraging China to cooperate with India and India too finds economic benefits in it.

(The writer is a researcher, Observer Research Foundation, New Delhi)