Ashgabat Agreement

India recently joined the Ashgabat Agreement, which was instituted in April 2011 to establish an international multimodal transport and transit corridor between Central Asia and the Persian Gulf. The Agreement was first signed by Uzbekistan, Turkmenistan, Iran, Oman and Qatar on 25 April 2011. While Qatar subsequently withdrew from the agreement in 2013, Kazakhstan and Pakistan joined the grouping in 2016. The Ashgabat Agreement came into force in April 2016. Its objective is to enhance connectivity within the Eurasian region and synchronize it with other regional transport corridors, including the International North–South Transport Corridor (INSTC).

Its accession to the Ashgabat Agreement would enable India to utilise the existing transport and transit corridor to facilitate trade and commercial interactions with the Eurasian region. Further, this would synchronise with India’s efforts to implement the INSTC ( I for enhanced connectivity.

Note: Ashgabat is capital of Turkmenistan, and its currency is Turkmenistan Manat

The Iran-Turkmenistan-Kazakhstan (ITK) railway line will be the major route under the Ashgabat Agreement. It had become operational in December 2014 and has also been included as part of the India-funded INSTC. Therefore, the Ashgabat Agreement and INSTC will be easily synchronized. The operationalisation of the INSTC is inching closer to becoming a reality. It encompasses ship, rail and road routes connecting India with Russia, Central Asia and Europe via Iran.

In general, joining the Ashgabat Agreement would make it easier for India to reach out to Central Asia which houses strategic and high-value minerals including uranium, copper, titanium, ferroalloys, yellow phosphorus, iron ore, rolled metal, propane, butane, zinc, coking coal, etc. Kazakhstan alone wants to increase its non-oil exports by 50 per cent by 2025. And, without direct transport access, India cannot procure the Central Asian riches needed for its manufacturing economy.

India’s current trade with Central Asia is minimal at a little over $1 billion and is not growing much. The volume of trade with the region accounts for a mere 0.11 per cent of India’s total trade. And, India’s share in Central Asia’s total trade is only about one per cent. Only by improving transport connectivity can the prospect of commercial ties with the region be enhanced.

When it comes to Eurasia, container transport plays a significant role, and for India to join the competitive situation in the Euro-Asian transit system, active participation in transportation projects becomes essential. India’s connectivity approach need not be limited to increasing trade and commerce but should aim to enhance investment and services, interlinking sources of raw material, centres of productions and markets between India and Eurasia. For example, a Free Trade Agreement (FTA) between India and Eurasian Economic Union (EAEU) could spur the unhindered flow of raw materials as well as inflow of capital and technology through new industrial infrastructure along Chabahar and INSTC routes.

Ashgabat Agreement envisages facilitation of transit and transportation of goods between Central Asian and Persian Gulf. Accession to Agreement would diversify India's connectivity options with Central Asia and have a positive influence on India's trade and commercial ties with the region.




Sources: IDSA, MEA, PIB