India's Accession to the Shanghai Cooperation Organisation

Interview with Phunchok Stobdan
August 20, 2015

On July 10, the Shanghai Cooperation Organisation (SCO) formally began the accession process for India and Pakistan to join as full members. The two states have been observers since July 2006. Speaking on the importance of the SCO’s enlargement at the Ufa summit in Russia in early July 2015, Russian president Vladimir Putin stated that the accession of the two South Asian states would increase the SCO’s “political and economic potential” and enhance its “capabilities to react to modern threats and challenges.” Despite Putin’s enthusiasm, the real significance of this diplomatic event may be obscured by other regional priorities and trends: the integration of the Eurasian Economic Union with China’s Silk Road Economic Belt, Russia’s continuing economic travails, the growth of the Islamic State of Iraq and Syria’s influence, and the fate of an agreement on Iran’s nuclear program.

In this Q&A, NBR speaks with former Indian ambassador Phunchok Stobdan, a senior fellow at the Institute for Defence Studies and Analyses in New Delhi, to better understand what SCO enlargement means for India. Ambassador Stobdan, who served as ambassador to Kyrgyzstan and director of the Indian Cultural Centre in Kazakhstan, believes that the limited immediate benefits will be more than compensated for by improved diplomatic access to Central Asia.

You recently wrote that India’s interests in Central Asia are deeper than energy and security. Could you elaborate on what these interests are and their role in India’s decision to apply to join the SCO?

India has a nontransactional interest in Central Asia, an emotional connection to the region with deep historical roots. The country’s political evolution has frequently been checked by dangers from Central Asia or the northwest, whether from Greece, Mongolia, Turkey, Afghanistan, or Iran. The northwest continues to be a critical focus of India’s threat perceptions, except the threat is now embodied by terrorism. India’s position in Eurasia has weakened over time—in large part due to the creation of Pakistan, which has limited the nation’s reach into the region—but events in this part of the world, whether the Afghan struggle or the spread of the Islamic State of Iraq and Syria, continue to pose a threat to India’s security.

India also has diplomatic interests in Central Asia. India is an aspiring global power and wants to be on the UN Security Council as a permanent member. India is compelled to engage in symbolic diplomacy, and engagement has become necessary regardless of economic interests. It’s an open question whether this type of diplomacy will be successful, but India’s philosophy is clear: have a presence. The region thus poses a dilemma for India: not establishing a presence is inconsistent with New Delhi’s broader diplomatic strategy and perceived security threats, but establishing a presence is very difficult because there are few options for engagement. The SCO gives India an opportunity to be present in the region—there’s no other appropriate multilateral platform.

Beyond India’s interests in Central Asia, accession to the SCO is also part of Prime Minister Narendra Modi’s strategy to engage China in a way that offsets initiatives elsewhere to contain China in cooperation with the United States. This is a tricky balancing act, and one made no easier by China’s plan to build a $46 billion economic corridor through Pakistan-controlled Kashmir. India has always preferred that Russia play the leading role in Central Asia, but with its economy in turmoil and a renewed westward focus, Moscow’s grip is loosening. At the same time, the Central Asian states are wary of the new Sino-Russian understanding in Eurasia. In particular, Kazakhstan and even Uzbekistan are seeking to diversify their foreign policy.

From which features of the SCO—the antiterrorism structure, the military exercises, its function as a talking shop—will India most benefit?

It is unclear from India’s standpoint how well the SCO institutions are functioning and how these institutions are affecting the regional security dynamic. We don’t know enough about the operations and accomplishments of the SCO’s Regional Anti-Terrorist Structure or military exercises and how they are influencing the situation on the ground. India could hypothetically learn from these activities, but in the meantime informed Indian commentators don’t quite understand why India should join a Chinese-led organization as a junior partner when the benefits are not well defined.

Despite the uncertainty, it is reasonable to predict at least some benefits in the security sphere. At the moment, India has functional bilateral relationships on security issues with many Central Asian countries, as well as Russia, but a collective approach would be new. India’s SCO aspirations have less to do with fighting terrorism than information sharing. For example, any country in the region that wants to host a major international event such as the Asian Games or the Olympics will have to leverage as many intelligence inputs as it can. Joining the SCO may prove useful in that type of scenario.

How has the India-Pakistan relationship affected the accession decision and process?

There are all types of interpretations and speculation about how the Pakistani bid played into the Indian decision, and vice versa. Essentially, if Pakistan wants to be in the SCO, then India has to join too. For India, there is no diplomatic risk if nothing else substantive comes out of membership in the long run.

The India-Pakistan factor cannot be disconnected from broader world politics. Russia is in a standoff with the West and would like to keep as many countries as possible from falling into the U.S. camp; presently, India and Iran are of the highest concern. Membership for India and Pakistan in the SCO would not have been as easy without the Ukraine crisis. At the same time, while Russian and Chinese interests often converge out of compulsion, there are undercurrents of fear in Moscow about China. Despite still controlling the airspace and military situation on the ground in Central Asia, Russia has seen its influence decline as Chinese investment pours in. Bringing India into the SCO as a counterweight to China is one way Russia can ameliorate the consequences of its weakening hand. Together, these factors have prompted Russia to push for Indian accession.

An interesting and frequently overlooked side of this accession story is the role that Russia and Central Asian states can play in managing India-Pakistan affairs. Kazakhstan president Nursultan Nazarbayev, for example, has initiated several efforts to improve South Asian relations. Russia, under Putin but also in the Soviet era, has never given up the desire to mediate an India-Pakistan rapprochement. These efforts extend back to the 1966 Tashkent Agreement, encouraged by the Soviet Union and the United States and mediated by Soviet prime minister Alexei Kosygin, which ended the 1965 war between India and Pakistan. Neither Russia nor China would like to see the United States take credit for engineering a resolution to the Kashmir dispute and repairing India-Pakistan relations. An Asian mediator would be more palatable; certainly Moscow has a special desire to play that role. The Indian policy on outside mediation in South Asian affairs has usually been characterized by unconditional opposition. How receptive New Delhi would be to Russian or Central Asian interjection into the India-Pakistan dispute remains to be seen.

Russia has not stated explicitly that it hopes to mediate the dispute, but I believe this intention is evident in the quiet diplomacy Russia has been conducting with Pakistan, a departure from its traditional lean toward India. Moscow wants Pakistan on board, and this must have played a role in its thinking on the SCO accessions. Of course, from Moscow’s point of view the Afghan factor and the spread of extremism in Central Asia are also critical justifications for bringing Pakistan into the organization.

How will the accession of India and Pakistan to the SCO impact the organization’s effectiveness?

This subject has been much discussed in India and is also a concern that the SCO member countries have voiced privately. They always worried that India and Pakistan would inevitably bring their conflicting issues into the SCO platform. The president of Uzbekistan, Islam Karimov, recently broke ranks with his fellow Central Asian leaders to warn that the accession of India and Pakistan would change the political balance within the community. Ultimately, the SCO is not as important to Indian foreign policy as the BRICS grouping (Brazil, Russia, India, China, and South Africa) and other multilateral forums. The SCO is already of limited effectiveness and is simply being kept alive by China to advance its diplomatic purposes in Eurasia. Once Beijing has accomplished its economic goals on energy and transportation connectivity, among other issues, the SCO won’t have much independent relevance. This is evident in the fate of the much-discussed SCO development bank, which has been stalled while China’s other projects, notably the BRICS bank and the Asian Infrastructure Investment Bank, have been prioritized.

The true limiting factors controlling what India can get out of SCO membership are India’s shallow pockets compared with China’s deep ones and the constraints of geography. If India manages anything concrete within the SCO, it will be very, very small. We certainly have advantages: India is liked in the region and is seen as a reliable partner and a critical country. But on the ground, India is not seen as a performer, and this negative perception will continue as long as Central Asian states compare India with China.

Moreover, there is a potential risk that India will be blamed for the SCO’s ineffectiveness. In fact, the Indian-Pakistan conflict has already been blamed for the failure of the South Asian Association for Regional Cooperation (SAARC). Since its founding in 1985, the association has made little progress in increasing intraregional trade. At present, only 5% of the SAARC nations’ trade is with each other. Talks between India and Pakistan at the head-of-government level eclipse the SAARC summits themselves, and the two countries’ disputes set the tone for the regional meetings. Recent Pakistani attempts to bring Chinese investment into SAARC have put India on the defensive and relegated New Delhi to the uncomfortable role of spoiler. A similar dynamic could emerge within the SCO. Further, because Russia continues to be the predominant security actor and China the predominant economic partner, they can cooperate to make India irrelevant in Central Asia.

The SCO is perceived in some quarters of the United States as a forum of authoritarian states coordinating the suppression of dissent. Does such a perception exist in India?

The contradiction between the SCO’s authoritarianism and Indian democracy is one that will surface eventually. However, if the issue does surface, it won’t be because of any ideological slant in India’s foreign policy. Unlike the United States, India doesn’t advocate democracy or anti-authoritarianism. The contradiction will become important if there are political transitions or regime changes within Central Asia during the next three to five years—a likely possibility.

A big question mark hanging over the region is whether Central Asian leaders will be willing and able to engineer smooth exits from the political scene. At present, it appears that Karimov intends to stay in power until he can cement his legacy. Similarly, Nazarbayev has devised internal means to stay in power indefinitely. Both leaders are aging, but neither appears to have a clear succession plan. They are unlikely to face any real opposition, despite facing criticisms from the United States for human rights violations, and have both recently sought re-election to bolster their legitimacy. Their political resilience and old age leaves the future of Kazakhstan and Uzbekistan in limbo, and the latter is likely to enter a new period of instability post-Karimov given the rising appeal of political Islam. The Turkmen president Gurbanguly Berdymukhamedov shows some liberal inclinations, but is more likely to follow the course of his predecessor, Saparmurat Atayevich Niyazov, who served as president for life until dying in 2006. Although Kyrgyzstan switched to a parliamentary democracy in 2010, the country’s democratic institutions and rule of law remain underdeveloped. With an unstable coalition government in place, there are many social and political challenges left unaddressed, including ethnic tensions in the south.

A second important question is whether political Islam will make headway in the region. A major shift toward political Islam is in fact already underway behind the fa├žade of authoritarianism propped up by China and Russia. This is most evident in Tajikistan and southern Kyrgyzstan. The entrenchment of the Islamic Movement of Uzbekistan and recruiting by the Islamic State of Iraq and Syria are also growing concerns. Beyond political Islam, ethnic and socioeconomic pressures could also challenge the sitting rulers. In Kazakhstan and Turkmenistan, for example, the unequal distribution of oil-generated wealth has been generating public discontent since 2011. So far, Russia and China have succeeded in insulating the Central Asian regimes from failure, although they have come close to the brink—Uzbekistan after the 2005 Andijan crisis, and Kazakhstan after the 2011 Zhanaozen event.

Nonetheless, India is worried about the uncertainty looming in Central Asia. We don’t know how the SCO will respond to a regime change event or whether India’s reaction will be aligned with the SCO’s stance. The emergence of democracies would present a huge opportunity because Central Asian Muslims are largely unsympathetic to fundamentalism and as such entertain no hostility toward India. In the meantime, India will benefit from maintaining a regional presence, tracking regional terrorism, and securing its energy routes.

How will these political dynamics affect the future role of the United States in Central Asia?

In recent years, the United States has seemed irked by the pressure Russia has applied on Kyrgyzstan to join the Eurasian Economic Union. Russian and Chinese influence in Central Asia, combined with potential leadership transitions in the coming years, could revitalize U.S. interest in the region. Any establishment of democracy could become the contentious issue that draws the United States back in. Washington could choose to revive its previously envisaged “new Silk Road” strategy to make Central Asia, including Afghanistan, a crossroads of global commerce.

Any potential U.S.-China contention in response to a growing U.S. presence would be limited because China is unwilling to enter into a confrontation with the United States in this part of the world, unlike in the Asia-Pacific. For one, China is talking about a convergence of interests with the United States in Afghanistan, and for another, China knows very well that direct confrontation with the United States would have an impact on China’s own western regions. Xinjiang, for example, shares a border with Afghanistan, and China will follow a strategy of avoiding conflict to limit any risks of an outside power exploiting discontent in the region.

How does India’s engagement with the SCO benefit its other activities in Central Asia, notably its efforts to secure energy supplies from the region’s oil and gas fields?

India’s efforts to secure energy from Central Asia are influenced by numerous factors: politics about gas, Russia’s confrontation with the West, and other larger geostrategic issues. The SCO is a platform for discussing these subjects but is only relevant in this limited sense. Turkmenistan was present at the Ufa summit despite being neither a member of BRICS nor the SCO; in this sense, the summit encompassed far more than the institutional meetings it was planned around.

A few path-breaking developments deserve attention. First, during Modi’s tour of Central Asia in July 2015, Kazakhstan signed a new contract to renew uranium supply to India. This deal weakens China’s monopoly on the Kazakhstan’s uranium exports. Second, the launch of ONGC Videsh Ltd.’s drilling operations in the Satpayev block in Kazakhstan in July 2015 may herald the opening of the region’s oil and gas sector to Indian exploration companies. This would create skilled jobs for Indian expats and a new stream of foreign exchange. Third, Modi’s talks in Ufa and Turkmenistan may clear the way for actual progress on the Turkmenistan-Afghanistan-Pakistan-India pipeline, which has faced ongoing delays in the face of Indian strategic concerns about reliance on Pakistan and the deteriorating security environment in Afghanistan.

Continued problems with access to affordable gas mean that India will continue to rely on domestic coal. Importantly, the Modi government seems to have realized that domestic issues, including Kashmir, energy security, connectivity, and above all problems with Pakistan, are linked to a larger power game. The stakes have risen in the face of the Ukraine crisis and the ensuing Russian standoff with the West. Further, as India’s energy demands increase, it will find itself at the center of important geopolitical and energy relationships. Modi’s meetings with Putin and Pakistan prime minister Nawaz Sharif in Ufa, followed by his visit to Turkmenistan, require a well-conceived strategy.

In fact, it was not terrorism but energy security that prompted talks between India and Pakistan in Ufa. Russia may be attempting to nudge both countries toward cooperation, especially in terms of working on the energy pipeline. Russian influence can surely benefit India in this regard; if Moscow wants to deny Central Asian oil and gas to Europe, it must help find new markets for these energy products.

A potential rapprochement between Iran and its critics could help open a new path that avoids the instability of Afghanistan, connecting Turkmenistan, Iran, and India by pipeline and ocean tanker. However, Afghan president Ashraf Ghani wants Afghanistan to be a front-line state for the United States and to this end may be open to creating complications for any cooperation that is not in the interests of the United States. Afghanistan could act to willfully destabilize regional projects, particularly if there is an end to the struggle with the Taliban, but the possibility of such a policy is difficult to predict. In the face of this uncertainty, the SCO’s value as a forum for coordinating regional projects involving India will persist.

Phunchok Stobdan is a former Ambassador to Kyrgyzstan and was Director of the Indian Cultural Centre in Kazakhstan. He is currently a Senior Fellow at the Institute for Defence Studies and Analyses in New Delhi, which he joined in 1989 as a Security Analyst.

This interview was conducted by Xiaodon Liang, an Intern at NBR.