Abstract
After the discovery of large oil and gas deposits in Central Asia, the region has become a vital battlefield for major world powers’ competing interests, resulting in a complex geopolitical and energy transportation interaction known as ‘pipeline politics’. After independence, multinational energy companies and global powers contacted the Central Asian Republics. Chinese investment has dominated the region’s energy sector throughout the past decade. India is strategically seeking Central Asia’s energy resources as it becomes more global. This article compares China’s and India’s Central Asian natural gas strategy and identifies research shortcomings. The complex geopolitical landscape is considered while examining their objectives and regional investments. This analysis reveals these methods’ motivations and their effects on the Central Asian Republics and the world. China has an advantage over India in Central Asian pipeline politics, making the region vital to China’s energy security.
Keywords
Introduction
Due to their substantial impact, oil and gas have such a crucial position in geopolitics and geo-economics that they might constitute as synonymous with power. According to Yergin (1990), oil and gas have become closely connected with national policies, global politics and power ever since they were discovered and utilised. War outcomes depend on energy regulation and supply, with oil fuelling military machinery and naval fleets. Oil exploration during the early stages of the oil business motivated European colonial expansion (Fisher, 2022). However, energy has become the fundamental basis of contemporary life in addition to achieving military victories and territorial growth. The substitution of coal with oil and gas during the first part of the twentieth century, together with its fundamental contribution to the development of contemporary societies, gave rise to what Yergin called the ‘Hydrocarbon Age’. The twenty-first century’s endeavours to shift away from fossil fuels have revealed the formidable challenge of reducing society’s dependence on hydrocarbons.
The idea proposed by Apodaca and Greensfelder (2019) posits that a pipeline connecting adversarial countries reduces the likelihood of armed conflict. Although not expressly included in national objectives, it has been associated with Western-led pipeline programmes as they seek to promote and finance pipelines that offer international security advantages. Political talks are vital in advancing projects, determining feasibility, facilitating agreements between different governments and obtaining funding and revenue-sharing arrangements between countries involved in production and transportation due to nationalism, multinational oil companies often require state support and clearance for talks involving energy and pipeline projects, leading to significant delays due to discussions over supply contracts and pricing post-project completion. Ultimately, there is a constant possibility of supply disruption for pipelines functioning at maximum capacity. Countries that restrict or entirely halt oil or gas supply from producer nations have been characterised as ‘weaponising energy’.
Due to the abundance of natural resources, namely, oil and gas, the five Central Asian Republics (CARs) have experienced the influence and competition of foreign interests concerning their individual and collective goals. India and China, the two most populous nations accounting for about half the global population, possess substantial energy requirements, rendering the CARs highly influential. Due to insufficient domestic supply, both aspirant countries have established the framework for Central Asia’s future international trade policies, particularly in the politics surrounding pipelines. The Middle East, traditionally the primary supplier of imported oil and gas, exposes the region to vulnerability due to escalating regional tensions, prompting both nations to broaden their energy supply systems. Central Asian countries are becoming increasingly important in this regard. Establishing pipeline transportation networks in the region presents a promising opportunity for the eco-friendly conveyance of energy resources to India and China. The geopolitical location of Central Asia as a land-locked area poses challenges for the delivery of oil and gas. The construction of a pipeline has become the sole viable method for transferring energy, leading to the term ‘pipeline politics’.
Russia views the CARs as part of its strategic vicinity, maintaining constant alertness to prevent intruders. The region is considered its own sphere of influence, with recent events like the Russia–Ukraine war (since 2022) prompting Russia to modify its international policies. Therefore, Russia has endorsed many initiatives, such as reviving discussions on the Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline and promoting the International North–South Transport Corridor (INSTC). These actions will directly influence—primarily slowing down China’s Belt and Road Initiative (BRI) influence in the region—the geopolitical dynamics of the CARs. CARs have effectively maintained a balance in their multilateral diplomacy and sovereignty protection through active participation in various institutional partnerships and international organisations. These include the Commonwealth of Independent States, the Collective Security Treaty Organization (CSTO), the Eurasian Economic Union (EAEU), the Shanghai Cooperation Organisation (SCO), the Conference on Interaction and Confidence-Building Measures in Asia (CICA), the Organization for Security and Cooperation in Europe, the Organisation of Islamic Cooperation, Organization of Turkic States (OTS), World Trade Organization (WTO), NATO’s Partnership for Peace programme and the Enhanced Partnership and Cooperation Agreement with the EU. 1
The academic originality of this study is in its combination of a comparative methodology, geopolitical integration and unequivocal conclusions identifying the preeminent actor in the region. These factors enhance comprehension of the intricate interplay of major world powers, local dynamics and the geopolitics of energy in Central Asia. What is the role of CARs in China’s and India’s energy security? What energy strategies are fulfilled by China and India in the energy-abundant CARs? What are the ongoing initiatives being implemented by India and China? The article addressed these questions with a focus on natural gas. This article will utilise primary and secondary sources for its design and development. Primary sources encompass documentary materials, legal records, official strategies and political declarations by ministries. Secondary sources contain articles, policy briefs, op-eds and reports. The central proposition of this article posits that China holds a dominant position over India due to various factors, such as its close geographical proximity and the substantial demand it alone can fulfil for the economic benefit of Turkmenistan. China maintains a less amicable relationship with the Western nations. India is exploring the region to meet its energy needs and tap into a potential market but is far behind China in this area.
Position of Central Asia in the Geopolitics of Energy
Geopolitics of Energy is a term that explains the interaction between geography and politics. It deals with ‘the effect that the location of resources has on the politics of states’. The key factor in this effect is energy and revenue security, which applies to producers (revenue) and the energy security of consumers (Skeet, 1996). Geopolitics emphasises the strategic importance of natural resources, their location and supply routes. The traditional meaning of the word geopolitics is that the ‘competition of great powers over access to strategic places and natural resources’ establishes a relationship among national interests, power politics, strategic thinking and decision-making within geographic space (Vakulchuk et al., 2020, p. 122).
Energy geopolitics, a crucial aspect of modern-era geopolitics, involves a state’s control over primary energy sources like oil, which significantly influences economic development, security and power. This rare geological distribution of resources has made energy a tool in geopolitical competitions, highlighting the importance of energy in shaping international relations. Energy control is crucial for national security and power calculations, as it influences military, political, economic, technological, cultural and soft power and serves as a foundation for other forms and modalities of power (Petersen & Barysch, 2011, p. 1).
Energy supply security and price stability are significant for economic growth in economically developing countries like China and India, as geopolitics and competition among energy-reliant nations have intensified. Energy security is a crucial global issue, with countries recognising its importance as a national security goal. If the demand is not met, it has the potential to turn into a geopolitical crisis. The geopolitics of energy studies the impact of energy on politics, power dynamics and interactions among nations and governments. Ensuring that energy security is a vital geopolitical issue requires countries to exert control over production sources and energy transmission routes (Hafeznia, 2006, pp. 102–103). Global energy policy is mainly shaped by the ‘Arc of Energy’, which extends from the Persian Gulf region to the Caspian Sea (including Central Asia) and through Siberia and the Arctic region to the Far East of Russia, Alaska and Canada. This region contains nearly 80% of the world’s oil and gas reserves (Sikeri, 2019, p. 2). Central Asia is poised to become a prominent player in the arc of energy during the twenty-first century, potentially reducing the influence of Organization of the Petroleum Exporting Countries in the international oil market. It accounts for around 7% of the world’s oil and 5% of world’s natural gas (Pontera, 2009). Based on data from the British Petroleum Statistical Energy Review 2021, Kazakhstan, Turkmenistan and Uzbekistan possess substantial proven oil reserves of 30 billion, 0.6 billion and 0.6 billion barrels, respectively.
Additionally, this region boasts abundant natural gas resources. The combined proven natural gas reserves in Kazakhstan, Turkmenistan and Uzbekistan amount to approximately 2.3 trillion cubic metres (TCM), 13.6 TCM and 0.8 TCM, respectively. Furthermore, while Tajikistan and Kyrgyzstan lack significant fossil fuel reserves, they have the potential to increase hydropower generation due to their abundant water resources significantly. Central Asia possesses around 5.5% of the world’s hydropower potential, primarily concentrated in Tajikistan and Kyrgyzstan (Rasoulinezhad et al., 2022). In the aftermath of the Soviet Union’s collapse and the discovery of substantial oil and gas reserves in Central Asia, the region has become a hub of competition among major powers. The Russians aim to maintain their traditional influence and control over the region, while the United States seeks to promote oil and gas lines that align with its long-term goals and geopolitical interests. China, driven by strong political and economic motivations, has entered into competition with a strong presence, seeking to challenge the hegemonic policies of the United States and gain access to energy resources and the large market of the region. China’s BRI project has placed Central Asia within its geopolitical circle. India joined the competition later, with some support from the United States and backed certain oil and gas connection lines such as the Trans-Caspian International Transport Route. The competition among these powers has led to a complex web of geopolitical dynamics, with each country seeking to advance its own interests and exert influence in the region. The United States and China are the main players in this competition, with Russia and India also playing important roles. The struggle for control over Central Asia’s energy resources and pipeline politics has significant implications for the region’s future, as well as for global energy security and geopolitical dynamics. Therefore, Central Asia’s energy, especially natural gas, and its geographical contiguity to India and China have given it a new arena for geopolitical rivalry with those emerging powers.
China’s Pipeline Strategy in Central Asia
‘Pax Sinica’ is a neologism suggesting China could become the dominant economic and geopolitical power in the twenty-first century, referencing historical periods like ‘Pax Romana’ and ‘Pax Britannica’ for relative peace and stability. It parallels historical periods such as the ‘Pax Romana’ and the ‘Pax Britannica’, representing periods of relative peace and stability under the dominance of Rome and Britain, respectively. With a consistent rate, China’s economic growth rate of 9.07% annually from 1990 to 2021 is predicted to surpass the United States, contributing significantly to discussions around Pax Sinica. Of course, it should be noted that despite China’s huge investment in Central Asia and the governments of this region welcoming the expansion of relations with China, some people in this region, especially in Kazakhstan and Kyrgyzstan, are suspicious of China’s increasing influence in this region. They have organised protests against the growing influence of China. 2
Additionally, China’s initiatives, such as the BRI and the establishment of the Asian Infrastructure Investment Bank (AIIB), indicate its efforts to expand its influence and challenge the existing global order. The ‘Made in China 2025’ strategic plan, launched in 2015, aims to develop China’s manufacturing sector further and enhance its technological capabilities. These developments, coupled with China’s increasing military spending and its pursuit of a multipolar political and economic system through organisations like BRICS (Brazil, Russia, India, China, and South Africa), contribute to the discussion about China’s potential to reshape the global balance of power. The timing of China’s economic overtake of the United States’ depends on the specific measurement basis used. Moreover, China has aligned with Russia to offset US influence in Central Asia through enhanced cooperation through institutional mechanisms such as SCO. Central Asia’s geostrategic qualities keep the United States and other interested parties strongly interested in retaining access and building cooperative relations with CARs. But China’s influence has been more salient due to expanding trade, acquisition of energy resources and overall rise as a major power (Rumer, 2008).
Bloomberg’s (2023) pessimistic scenarios predict that after the decline in China’s GDP growth during the Covid era, the country will continue to grow at around 5% until 2025, and thereafter, its growth will be around 4% and will decrease to 3.5% in 2030. This declining trend will continue until 2050 and the worst scenario predicts a 1% growth for 2050. The important thing is that at least until 2035, China will experience a growth of about 4%, and this growth will require massive energy (Figure 1).
Therefore, China needs energy for sustainable economic growth. According to the China Energy Data Report 2022, natural gas consumption in China reached 367 billion cubic metres (bcm) in 2021, representing an 11.89% increase over the previous year and accounting for 9.32% of the country’s total energy consumption. This indicates that natural gas has become a significant component of China’s energy mix (Xu et al., 2023). The forecasts show that China’s natural gas consumption will reach around 640 bcm in 2030 (Zhao et al., 2023). China’s natural gas production fell short of its consumption needs, with a gap of almost 44.29% in 2021 (Li et al., 2023), and this trend will increase by 2030. Then, renewable energy will gradually replace fossil energy including natural gas (Zhao et al., 2023). Figure 2 shows that the level of Chinese import dependence on natural gas will reach 70% in 2040, and it will increase by 2060 (Chen et al., 2021).
By 2050, more than 90% of China’s oil consumption must be imported (Li, 2018). According to the forecasts, China’s net oil imports are expected to increase from 11.5 million barrels in 2016 to 14.9 million barrels in 2025 and 15.8 million barrels in 2040 (Figure 3).
China is prioritising energy security to maintain its position as the world’s largest economy, requiring access to reliable energy sources. China’s crude oil imports from nine Middle East countries accounted for almost half (50.7%) of China’s total crude oil imports in 2021, from $39 billion from Saudi Arabia to $232.3 million from Egypt (Workman, 2022). In 2021, it also imported nearly 9 million tonnes of liquefied natural gas from Qatar, or 11% of its total imports in 2022 (Middle East Monitor, 2022). As pointed out earlier, China’s demand for natural gas is expected to increase in the coming years.
China faces energy security issues due to imported goods passing through the Strait of Malacca, a crucial waterway for transporting hydrocarbons and container shipments. As Figure 4 shows, Singapore is located at the mouth of the Strait of Malacca. Singapore is one of the U.S.’s closest allies and participates in US naval exercises. As a rival country, the United States can easily block the Strait of Malacca in case of a conflict with China or disrupt the normal transportation flow. China’s focus on ensuring a stable and reliable supply of energy motivates its desire to expand the variety of energy transmission options. Central Asia, a key region in China’s geo-economic strategies, is crucial for the development of pipelines due to its rich energy resources and geographical connection to China’s borders, making it a vital part of China’s energy geopolitics (Hu & Cheng, 2008, p. 49). This region can reduce China’s dependence on other regions. China’s geo-energy strategy matches its grand policy of BRI in Central Asia.
China’s first Central Asian energy pipeline is the China–Kazakhstan oil pipeline. The initial idea of building this pipeline was proposed in 1993. Then, in 1997, the Chinese National Petroleum Corporation (CNPC) and KazMunayGas signed a memorandum of understanding to construct the eastern part of the pipeline, which cost 3.5 billion dollars. The length of this pipeline from the origin to the destination is 2,228 km, and it transports 120,000 barrels of oil per day. Also, in June 1997, China National Oil Company bought 60% of Kazakhstan’s Aktyubinsk Oil Company. Finally, in December 2005, a part of the Kazakhstan–China oil pipeline was operationalised as the first pipeline in Central Asia that is outside the traditional route of Russia (Du, 2011, p. 8). The pipeline, completed in 2009, has an annual capacity of 20 million tonnes of oil discharge. However, it faces challenges due to its reliance on the Caspian Kashagan oil field, which contains a significant amount of hydrogen sulphide, causing the pipeline’s oil to freeze in winter (Pradhan, 2019, p. 426). From 2005 to 2022, China has invested about 44.5 billion dollars in Kazakhstan’s economy, especially energy (Avdaliani, 2023).
Natural gas trade between China and Turkmenistan is very significant. Presidents Saparmurat Niyazov and Hu Jintao agreed in April 2006 for Turkmenistan to supply China with 30 bcm annually for 30 years through the 1,833 km pipeline, starting from Turkmenistan’s east and reaching China via Uzbekistan and Kazakhstan, which went into construction (Hancock, 2006, p. 77). This pipeline was put into operation on 4 December 2009, under the rubric of Line A (Fazilov & Chen, 2013, p. 41). Line B, an 1,833 km long gas line from Turkmenistan to China, was opened in October 2010 with a nominal capacity of 15 bcm per year. Both lines are owned by CNPC. With limited resources, Uzbekistan, third in Central Asian reserves, cooperates with China due to its pipeline location. In 2004, CNPC and Uzbekistan National Oil and Gas Company initiated collaboration. Uzbekneftegaz signed an agreement for cooperation in the energy field.
In 2006, they signed agreements with Russian Lukoil, Malaysian Petronas and South Korea’s National Oil Company to explore and develop potential reserves near the Aral Sea (Fazilov & Chen, 2013, p. 42). In June 2010, China and Uzbekistan agreed on an annual export of 10 million cubic metres of natural gas via the third line (C) of the China–Central Asia pipeline (Hydrocarbons Technology, 2015). In 2013, various energy contracts totalling $15 billion were signed between China and Uzbekistan (Oybek, 2017). Finally, the C gas pipeline, with an annual capacity of 25 bcm based on the gas portfolio of Turkmenistan, Uzbekistan and Kazakhstan, became operational in 2014 (Figure 5).
A, B, C, and D Natural Gas Pipelines from Central Asia to China.
The two pipelines, A and B, transport Turkmen gas to China only, while the C line is the gas basket of three Central Asian countries. Also, only 25% of the ownership of the C line belongs to CNPC. In 2013, China reached an agreement with Uzbekistan, Tajikistan and Kyrgyzstan to build another 966-km gas pipeline, known as Line D. This pipeline will add 25 bcm to the region’s gas exports annually (Singh & Haba, 2021). In this regard, China has also financed two other refineries in Kara Balta and Tokmok in Kyrgyzstan. The characteristic of the D line is that its route is different from the other three lines, and it passes through all five Central Asian countries. It was supposed to be completed in 2022, but the construction activity is still ongoing (December 2023). Beijing intends to integrate CARs into the regional energy equation, promoting interdependence between CARs and China, with Kazakhstan playing a crucial role in pipeline strategy (Hong, 2011, p. 95). The International Energy Agency predicts that China may import nearly 50% of the oil and gas exported from Central Asia by 2025, leading to a significant shift in the energy flow from CARs from the West to the East (IEA, 2021).
China is diversifying its energy supply sources and establishing strategic partnerships with energy-rich countries like the Persian Gulf, Central Asia and Russia. This aims to avoid risks in transmission routes and future energy supply by creating different land and sea routes for importing energy from different regions. Currently, half of China’s energy needs are supplied from the Arab Middle East, mainly under the US’s influence. Eighty-five per cent of China’s total energy passes through the Strait of Malacca. China’s main strength stems from its money, discipline and strong political will, unlike rivals like India in Central Asia. This leverage could sideline other potential rivals in CARs. In addition, Chinese companies could make informal connections with decision-makers and their associates, senior officials, and major businessmen which have facilitated Beijing’s influence in the region. The discourse of China’s foreign policy, which is based on non-interference in domestic affairs and non-concern to human rights abuses, has contributed to this increasing influence (Umarov, 2020).
India’s Pipeline Strategy in Central Asia
India has transitioned from a non-alignment stance to a more proactive role in international relations since the end of the Cold War. This shift aligns with its growing global influence as a significant economy. The economic liberalisation reforms of 1991, including industry deregulation, led to a dynamic surge in India’s economy, with an average growth rate of 5.8% in the 2000s (Subramanian, 2011). India’s economic growth is largely due to pro-market agendas and globalisation. Previously, the ‘Licence Raj’ led to strict rules and government control, limiting foreign direct investment. However, with an open economy, India became a global leader in IT services and manufacturing. It is predicted to become the world’s third-largest economy by 2028, showcasing India’s ability to adapt and innovate in the face of global challenges (EY India, 2023). India is, after the United States and China, with some measures already the third-largest economy (IMF, 2023) and is predicted to surpass the United States by 2075, according to Goldman Sachs predictions, and potentially become the world’s second-largest economy by 2075 (Daly & Gedimas, 2022).
With 1.4 billion people, India is the world’s largest democracy and competes with China for the largest population. This large ‘demographic dividend’ is a crucial driver of India’s economic growth. By 2027, India will have the world’s third-largest consumer market (CNBC, 2023), and the country will have a working-age population of 1.04 billion (EY India, 2023). India is also beginning to challenge China’s dominance in manufacturing, as global companies seek to find backup countries to China (due to so-called ‘China plus one’ strategies) (Wen & Ip, 2023). Some 41% of India’s energy consumption is linked to industry (Government of India, 2023). Therefore, a secure energy supply will underpin any future growth. Since 2000, India’s energy consumption has doubled, and 80% of its energy needs are still met with fossil fuels (IEA, 2021). In 2021, India was the third-largest energy consumer after China and the United States (BP, 2022). In 2022, Indian energy consumption increased by approximately 8%—almost double the regional increase (Reuters, 2023). With future solid growth predicted, India’s reliance on oil and gas is far from its peak.
India is the second-largest producer and consumer of coal; however, its demand continues to outstrip its supply. While publicly promising to ‘phase down’ coal as part of COP26, it has been challenging to transition towards cleaner forms of energy. This is in part due to its domestic development agenda, with PM Narendra Modi’s pledge to electrify every home. Therefore, India has expanded and intensified coal mining to cope with the increasing domestic demand for energy, increasing its annual production target to 1 billion tonnes in the year 2023–2024 (The Economic Times, 2023). Around half of India’s energy needs are being met by domestic production (ITA, 2022). The majority of its coal imports come from Australia (34%), Indonesia (34%) and South Africa (12%). Of India’s crude oil and LNG imports, approximately 60% originate from the Middle East, with approximately 15% each coming from Africa and the Western Hemisphere (EIA, 2022). Ramkumar et al. (2021) assert that India is at a ‘crossroads’ concerning its energy strategy. The input suggests that India is at a critical juncture due to various factors such as climate commitments, energy demand and geopolitical conditions. It is recommended that India moves away from coal dependency and seeks secure and diversified energy sources from abroad. While renewable energy is a promising alternative, it will take decades to transition completely, and hydrocarbon consumption will continue during this period.
India is expanding its domestic pipeline network to meet energy supply and demand needs. It is tied for first place with the United States in developing oil pipelines, with 2,824 km of new pipelines estimated at USD 4.0 billion (Global Energy Monitor, 2022). India and China are also developing more gas pipelines than the rest of the world, each costing around $20 billion (Global Energy Monitor, 2022). India is also participating in pipeline projects beyond its border.
According to BP’s projections, India’s natural gas production is expected to grow across all scenarios, reaching between 59 and 132 bcm by 2050, compared to 27 bcm in 2019. The share of natural gas in India’s total primary energy mix is also projected to increase in all scenarios, rising from 5% in 2019 to 7%–11% by 2050. This growth is supported by industry demand and heavy road transport (BP, 2023). However, despite the growth in natural gas production, India’s domestic oil and gas production needs to catch up to consumption trends. As a result, India’s net dependence on imported oil is expected to rise above 90% by 2040, up from the current 75%. In 2019, India spent $27 billion on importing natural gas, which is projected to increase to $40 billion. By 2040, it is estimated that India will import more than 60% of its natural gas consumption (IEA, 2021). It is worth noting that India’s import dependency for natural gas based on consumption has decreased from 48.2% in the financial year 2021–2022 to 46.3% in the financial year 2022–2023 (April–October) (Business Standard, 2023). However, overall, natural gas import dependency has increased from 20% in 2010 to nearly 50% in 2019, and it is expected to surpass 60% by 2040 (IEA, 2021). Given India’s increasing need for natural gas and its growing import dependency, Central Asia’s gas resources present an attractive opportunity for securing India’s future gas needs.
India has adopted a more assertive global role, implementing liberal economic reforms and the ‘Act East’ policy in 2014, pursuing to strengthen ties and foster cooperation with its Southeast Asian neighbours, rebranding the ‘Look East’ policy as ‘Act East’ (Haokip, 2011). This shift in policy also saw India actively engaging in various regional associations; the country joined the G20 in 1999, became one of the Five Interested Parties at the WTO in 2004, attained observer status in the SCO in 2005 (eventually becoming a full member in 2017) and was a founding member of BRICs in 2009. After the Cold War, India’s shift from a policy of non-alignment to a significant global actor with a Western orientation hindered him to have swept attention to Central Asia’s new great game. After a while, India found itself in geopolitical competition with China in the region (Scott, 2008). India had already established a consulate in Tashkent, Uzbekistan, which was later elevated to a full-fledged embassy. India established four additional embassies in Central Asian countries by 1992, leveraging the region’s strategic location and energy-rich nature as a valuable additional energy source, highlighting its significant role in global geopolitics.
India’s engagement with Central Asia is characterised by ‘energy diplomacy’, aiming to secure reliable energy supplies and reduce dependence on Middle Eastern oil and gas. This diplomatic approach fosters strong ties for long-term energy security. India became the third foreign nation after Russia and the United States to establish a regional military base (Afzal, 2003). Farkhor Air Base near the town which located 130 km southeast of the capital Dushanbe in Tajikistan is considered India’s first and largest military base overseas (Javaid, 2021). As a relative ‘diplomatic latecomer’ to the region, India launched the ‘Connect Central Asia’ policy in 2012, India’s policy initiative aims to strengthen its strategic position in energy, security and trade, leading to significant progress in Indo-Central Asian relations, culminating in the inaugural India–Central Asian summit in January 2022. This signified a heightened commitment to fostering a dynamic and multifaceted relationship between India and Central Asian nations.
India’s energy strategy in Central Asia has faced paramount challenges and delays despite its efforts to foster diplomatic and strategic partnerships. In 2008, India formally joined the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline project. This ambitious project aimed to transport 33 bcm of natural gas from Turkmenistan to India and Pakistan. However, initially proposed in 1995, the TAPI pipeline has encountered prolonged delays primarily due to strategic, security and financial reasons. Since the idea of building this pipeline was first raised, the security situation in Afghanistan, as well as the tribal areas of Baluchistan province in Pakistan, has not been reliable for international investors. In 2022, the Taliban promised to ensure the security of this pipeline within Afghanistan. International investors remain sceptical of the Taliban’s promises due to lack of recognition and ongoing hostility between India and Pakistan, affecting negatively India’s motivation for this project. Despite the Asian Development Bank (ADB) already offering a $1 billion loan to finance the TAPI (The Express Tribune, 2016), but practically this project stalled as of now (2024). Although Pakistan has committed to guaranteeing India’s access to TAPI gas exports and paying damages in case of agreement breaches, India still harbours concerns about Pakistan. As a result, India currently secures its gas needs through LNG imports from international markets. With the United States’ withdrawal from Afghanistan in 2020, Washington’s support for TAPI has decreased and this multinational project due to political, security and financial reasons could not make any progress by 2023. In contrast, Russia has supported the construction of this pipeline, highlighting the geopolitical rivalry between Moscow and Washington (Haidar, 2023).
The TAPI project faces challenges in gas prices and transit fees among its member countries. Turkmenistan initially wanted varying export gas prices, but other countries opposed this. India also sought a lower gas price compared to LNG import costs, which Turkmenistan may not accept. Pakistan is unwilling to invest in the project without receiving lower gas prices from TAPI. The topographic features of Afghanistan and Pakistan’s routes will increase construction costs, making financing a challenge. Despite consultations with countries like Uzbekistan, Italy, Malaysia and the Persian Gulf Arab countries, no concrete results have been achieved (Khetran, 2020).
India and Iran have been working on a ‘peace pipeline’ project since the 1990s, the Iran–Pakistan–India (IPI) pipeline. The pipeline aimed to transport 40 bcm of natural gas to Pakistan and India, with the potential to reduce tension between India and Pakistan. However, in 2009, India announced its withdrawal due to US pressure and longstanding animosity with Pakistan. Many reasons have been cited for India’s withdrawal from the IPI. Perhaps the most important reason is the American pressure on India and Washington’s sanctions against Iran, which has made the private sector unmotivated to invest in this project. In addition, India did not want to sacrifice its greater interests with the United States for lesser interests with Iran. Also, India’s security problems with Pakistan have caused India to believe that Pakistan may use this pipeline as a geopolitical pressure leverage in the future. On the other hand, India disagrees with Pakistan on determining the gas transit cost from this country to India, and the two countries could not resolve this issue. Moreover, it is mentioned that Iranian delegations lacked professionalism and enough authority in negotiations with their Indian counterparts. The US political pressure has caused most of India’s big projects in Iran, such as the development of Chabahar port as well as INSTC relevant investments, to be delayed. The IPI, which began in 2002 and was expected to be operational by 2014, was left unfinished due to India’s withdrawal and Pakistan’s delay in investing in the pipeline. Pakistan cited US sanctions against Iran as the reason for the delay. The pipeline was hoped to be completed by Iranian, Russian and Chinese companies, but Iran rejected Pakistan’s request for a $500 million loan. Iran’s former oil minister, Bijan Namdar Zanganeh, emphasised that the project’s future would not be promising until India joined the pipeline (BBC Persian, 2013). The recent development indicates that Iran will extend the project deadline by 180 days until September 2024 to encourage Islamabad to invest in the project or face a potential $18 billion fine. It is estimated that Pakistan initiated talks with Tehran, committing to finalise the initial phase of the 80-km Iran–Pakistan gas pipeline project within its territory from the Iranian border to Guader port in 2024 or 2025 (Profit, 2024). However, there are doubts about Islamabad’s ability to fulfil this promise. India has completely withdrawn from the project (Saira et al., 2022).
India encounters substantial obstacles in fulfilling its energy goals in Central Asia due to geopolitical and security concerns, as well as conflicting power interests. China’s skilful implementation of ‘cashbook diplomacy’ and minimal political obstacles have consistently contributed to the success of the country’s big projects, particularly those within China. The complexity of these obstacles is intensified by the intricate network of geopolitical and security concerns throughout the region, as well as the diverse levels of achievement observed in the area, which are influenced by the strategies and approaches of different global players, notably China. India at first focused on Kazakhstan for its geopolitical gravity in INSTC and its enormous gas, oil and other minerals. So, initially, India was involved in energy trading with Kazakhstan, as evidenced by the deal signed in 2009 between ONGC Mittal Energy Limited and Kazakhstan for oil exploration in the Caspian Sea. However, this deal and other subsequent deals encountered technical and commercial obstacles and were terminated without any progress. Consequently, China outpaced India in Kazakhstan despite New Delhi–Astana struck ‘strategic partnership’ in 2009 (Azmi et al., 2024; Pradhan, 2022).
India is considering reviving the International North–South Trade Corridor, a trade route between India and Europe via Russia, to improve connectivity and reduce political risks associated with overland pipelines, as India and China already import significant Russian oil by sea (Khan et al., 2023; The New York Times, 2023). India’s neutral stance towards Ukraine may hinder its diplomatic presence and energy trade pursuits. The complex task of international energy projects requires political negotiation and goodwill, as seen in Central Asia and India. India could develop its own path to meet future energy needs without copying China.
Conclusion and Future Direction
The article explores the intricate interplay of geopolitical and geo-economic factors affecting Central Asia’s energy situation, particularly natural gas and pipeline politics. China views energy security as crucial for global stability, but risks like instability in Caspian Basin countries and military conflicts pose challenges (such as the critical points of the Straits of Hormuz and Malacca) and increasing tensions with the United States. Beijing prioritises factors like diversified energy resources, geographical proximity, secure energy transportation, and the potential to provide energy through land within Central Asia’s framework of the BRI. Essentially, China has fostered a form of mutual dependence in its interactions with CARs, enabling oil- and gas-rich countries in the region to address China’s strategic concern of ‘energy security’ while China meets some of Central Asia’s strategic needs and ensures long-term energy exports, particularly in natural gas. China’s energy diplomacy in the region focuses on acquiring energy resources, making investments and securing long-term contracts in the upstream and downstream sectors of the CARs, often led by the state-owned CNPC as the primary shareholder. China’s mega-project involves gas transmission pipeline construction, demonstrating political will, money and discipline in pipeline politics in Central Asian regions. In 2021, 80% of China’s pipeline gas imports and 11% of its total gas consumption came from Central Asia (ISSUU, 2022).
India’s energy initiatives, particularly in gas pipelines, face challenges due to geopolitical pressures, such as US sanctions against Iran and geographical obstacles involving Afghanistan and Pakistan. Despite the geopolitical allure of Central Asia, India continues to seek energy cooperation plans with the region, such as the half-finished TAPI project. However, India’s immediate challenge comes from the land-locked geographic location of Central Asia, the absence of reliable land transit routes and China’s dominance as a competitor. These factors have significantly hindered India’s engagement with the CARs positioning India as a weak player in the region. India’s trade volume with Central Asia is around $1.5 billion, with Indian imports accounting for less than 1% of total exports from the region. Similarly, India’s exports to the region represent less than 1.5% of its total imports. Except for Kazakhstan, there is limited potential for energy trade between India and Central Asia, as India’s gas imports from the region are almost nil (Kumar, 2021; Stobdan, 2018). In energy respect, the only exception is Kazakhstan, which, in 2021, exported approximately $342 million worth of crude oil to India (OEC, 2022). Additionally, India’s state oil company is less active than China’s and has not invested as generously in the region. India’s efforts to establish itself as an influential player in Central Asia are more yearned than actual, as evidenced by trade figures. The analysis comprehensively assesses China and India’s energy strategy in Central Asia, but there are research gaps and opportunities for further exploration. An extensive analysis of the effects of various energy methods on local populations, economics and government structures in CARs could offer a comprehensive perspective. Gaining insights into the viewpoints and firsthand encounters of individuals in the area would enhance the thoroughness of the analysis.
The extraction and transportation of oil and gas resources have substantial environmental consequences. An important consideration would be to examine the environmental ramifications of energy projects in Central Asia, together with the strategies and actions implemented by China and India to address environmental issues.
An examination of the function of multilateral institutions, such as the SCO or the AIIB, and their impact on the energy situation in Central Asia could yield further understanding.
The analysis of security dynamics related to energy infrastructure projects, including the safeguarding of pipelines and the broader geopolitical implications of energy rivalry between major nations, is beneficial considering the region’s geopolitical sensitivity.
The analysis of the influence of global dynamics, including changes in energy demand, technological advancements and international relations, on the energy strategies of China and India in Central Asia could offer valuable insights into future trends.
The study suggests further investigation into the impact of China and India’s energy strategies on the policy decisions and long-term economic and political paths of CARs.
Footnotes
Declaration of Conflicting Interests
All the authors have agreed to publish in this journal and do not have any form of conflict of interest.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.