DELHI, January 9. /«Dunyo» IA/. An Associate Fellow at Vivekananda International Foundation Dr. Pravesh Kumar Gupta in his analytical material presented to 'Dunyo’ Information Agency reflects on the current state and prospects of multifaceted cooperation between Uzbekistan and India:

- India and Uzbekistan share close historical and cultural ties. Cultural interactions in the Bronze Age are confirmed by discovering identical Indus Valley artifacts in Oxus cultures and vice versa. Even the Central Asian region is mentioned in the ancient Indian epics such as Mahabharata. Buddhism made its way from India to China via Uzbekistan and Central Asia.

These historical links have always been a solid basis for the growth and deepening of bilateral cooperation in the political, economic, cultural, and humanitarian spheres. On the other hand, despite the goodwill that exists in both countries, multiple challenges have hindered the scope of bilateral cooperation. Lack of connectivity has been a major issue hampering India’s outreach to Uzbekistan and vice versa. It has also been responsible for the low trade volume between the two countries.

President of Uzbekistan Shawkat Mirziyoyev sought to rekindle relations between India and Uzbekistan. Indian Prime Minister Narendra Modi’s initiatives to strategize India’s Central Asian policy complemented it effectively. In July 2015, PM Narendra Modi visited five Central Asian countries, marking a turning point in India-Central Asia relations. With the support of Uzbekistan, India has started several initiatives to bring Central Asian countries closer together in a multitude of settings. The India-Central Asia Dialogue, the Regional Security Dialogue on Afghanistan, and the India-Central Asia Leaders’ Summit are just a few of the initiatives demonstrating the importance of India-Central Asia ties. In this sense, Uzbekistan has played a critical role.

Trade between the two countries is much below its potential. Total trade exchange between India and Uzbekistan increased marginally from USD 370 million in 2016 to USD 690 millon in January-November of 2023. India’s trade with Uzbekistan accounts for less than 0.05 percent of overall trade.

Witnessing the limited trade between the two countries, connectivity becomes crucial.

India severely needs to develop and expand its trade basket and improve connectivity. Prime Minister Narendra Modi and President Shavkat Mirziyoyev expressed their commitment to take the bilateral trade up to 1 Billion USD per year during the Uzbek President's visit to India in October 2018. The Covid-19 outbreak affected the bilateral trade from 2019 onwards.

During the 12th meeting of the Intergovernmental Commission for Trade, Economic, Scientific, and Technical Cooperation held on December 4, 2020, India and Uzbekistan has reached to specific agreements on the accelerated start of financing forty-one projects in the areas of health care and education (Primary, secondary and higher education), which will be implemented using Indian grant funds. Both sides also agreed to launch several infrastructure and social development projects, which will be co-financed by the Eximbank of India.

During President Mirziyoyev’s official visit to India the Uzbekistan-India Business Council was initiated to address the challenges and opportunities of bilateral commercial ties in various sectors such as agro-processing and agriculture, education, health, textiles, chemicals and pharmaceuticals, leather, auto and engineering, energy, tourism, etc. Moreover, establishing the India-Central Asia Business Council in February 2020 has further provided opportunities for India-Uzbekistan trade and commerce.

On October 21, 2020, the Federation of Chambers of Commerce and Industry of India (FICCI) and the Chamber of Commerce and Industry of Uzbekistan organized an Uzbek-Indian business forum in a virtual format. The second meeting of this forum was held on November 22, 2021. This forum intends to analyse and promote the economic opportunities that exist in India and Uzbekistan for the business communities of both countries. Uzbek representatives have also been highlighting President Shavkat Mirziyoyev’s reforms to transform the business climate in Uzbekistan, which has given further prospects to Indian businesses to invest in the country.

There are two aspects which necessitate Uzbekistan's support for India's efforts for seamless regional connectivity. Firstly, India could expedite Uzbekistan’s access to seas through its Chabahar and INSTC (International North-South Transport Corridor) projects. Secondly, Tashkent will also have better trade and investment opportunities with India. Uzbekistan is not a member of INSTC. However, President Shavkat Mirziyoyev indicated an interest in joining this connectivity project. India and Uzbekistan will most likely widen commercial cooperation in the coming years as members of the Ashgabat Agreement and the International Road Transport Convention (TIR).

On December 11, 2020, India and Uzbekistan hosted the first High-level Bilateral Summit in a virtual format. This Summit is noteworthy since it is India’s first virtual Summit with any Central Asian country. PM Narendra Modi and Uzbek President Shavkat Mirziyoyev attended the Summit and addressed a number of issues of mutual benefit. India’s development aid to Central Asia and Uzbekistan was also discussed during the Summit. Another significant agenda was the removal of trade and connectivity barriers. India welcomed Uzbekistan’s proposal to have a trilateral dialogue with India, Uzbekistan, and Iran to discuss the shared joint usage of Chabahar port.

Consequently, on December 14, 2020, a trilateral discussion was held, which may be considered a good outcome of 'Quick Diplomacy.’ To increase trade and investment between the two countries, the two leaders agreed to expedite the completion of an ongoing joint feasibility study, which will pave the way for negotiations on a preferential trade agreement. The two leaders also agreed that both sides should endeavor to complete a bilateral investment treaty as soon as possible to enable investment promotion and protection to boost trade and economic cooperation.

Despite the lack of a direct land route and connectivity, India-Uzbekistan strategic ties have been elevated by consistent high-level bilateral visits and the stepping up of the bilateral discussion process. Although the level of cooperation in commerce, trade and investment, security, and technology has witnessed slight growth, there is still a lot of scope for further development. Connectivity must be facilitated as soon as possible. Overall, both countries must use all methods necessary to bridge the gaps, allowing their developmental approach to become more aligned in a rapidly shifting geopolitical environment.