EDB Seeks Steady, Long-Term Corridor Between India And Central Asia

The global trade finance gap has been widening due to the pandemic, geopolitical issues, increasing protectionism, and tightening financial conditions. In response to these challenges, EDB and Exim Bank want to explore how trade finance can unlock new opportunities for collaboration and economic growth in the region.

While trade between India and Central Asia has shown consistent growth, substantial untapped potential remains. Both regions stand to benefit significantly from deeper economic engagement, particularly through the facilitation of cross-border trade and financial partnerships.

On India’s side, EDB sees strong interest in sectors like electric equipment, machinery, transport vehicles and pharmaceutical products, among others. From Central Asia, there is growing export potential in mineral fuels, fertilizers, inorganic chemicals, precious stones and metals.

Central Asia, including Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, being geographically landlocked, remains distant from the major global trade and economic centres. International trade remains below potential levels, confined by an arid climate, limitations in connectivity, market access issues, limited bilateral engagement, and difficult trade and transport facilitation.

However, with huge mineral resources, increasing diversification of economies, and a growing focus on regional cooperation, these landlocked nations have the potential to be integrated as important players in the global economy.

From financial services to contracting, engineering, and management consultancy, Indian firms possess the expertise and manpower to contribute significantly to Central Asia’s infrastructure development. India could be a vital source of goods exports and technical know-how in diverse sectors such as infrastructure, hospitality, and medical equipment.

India’s trade with Central Asian nations has exhibited an upward pattern, amounting to $1720.4 million in 2023, driven by India’s imports from Central Asia. Pharmaceutical products accounted for 37.9 per cent of India’s total exports to the Central Asian region, followed by electrical machinery and equipment, machinery and mechanical appliances, edible meat, and fruits and nuts among others. Mineral fuels and oils were the major imported commodity by India, accounting for 35.3 per cent of the total imports from the region, followed by fertilizers, and inorganic chemicals in 2023.