ASTANA – Kazakh and Indian experts discussed trade relations and the role of the International North-South Transport Corridor (INSTC) in boosting economic ties during a special event on March 11 at Maqsut Narikbayev University. The discussion highlighted the importance of cooperation and the route’s potential to drive the region’s economic growth.
Photo credit: The Astana Times
Participants noted that the INSTC offers advantages beyond increased cargo transportation and reduced travel time. It also enhances supply chain efficiency for assembly plants, attracts skilled professionals, and facilitates the introduction of advanced technologies in digitalization and logistics infrastructure.
Strategic partnership
Sanzhar Ualikhanov, the head of the South Asia Directorate in the Asia-Pacific department of Kazakhstan’s Foreign Ministry, emphasized the strength of bilateral relations, noting that “through joint efforts, we have managed to establish a trusting political dialogue, as well as strong economic and cultural ties, which have allowed us to raise cooperation to the level of a strategic partnership.”
The scheme of the standart route and INSTC. Photo credit: The Astana Times
Highlighting the strength of Kazakhstan’s manufacturing sector, Ualikhanov pointed out that in 2024, “180 investment projects worth 1.3 trillion tenge (US$2.4 billion) were implemented in the manufacturing industry, leading to a sector growth of nearly 6%, the highest in the past decade.”
He said the government remains committed to supporting emerging enterprises and launching large-scale industrial projects.
He also pointed to increasing Indian investment in Kazakhstan, saying that by the end of 2023, Indian capital investment had reached $30.1 million, bringing total Indian investments since 2005 to $460 million. Trade between the two nations in 2024 approached $1 billion, with Kazakhstan playing a key role in energy supply.
“Our country is a reliable partner for India in ensuring the supply of oil, gas, and other energy resources,” Ualikhanov said, adding that there is growing potential for cooperation in pharmaceuticals, IT, agriculture, space exploration, rare metals, and defense.
“We are paying close attention to the transit and transport sector in our bilateral cooperation. The primary corridor linking Kazakhstan with India is the INSTC, which utilizes both land routes and seaports via the Caspian Sea to Iranian ports,” he said.
Ambassador of India to Kazakhstan T.V. Nagendra Prasad highlighted the significance of connectivity in strengthening economic ties.
Ambassador of India to Kazakhstan T.V. Nagendra Prasad. Photo credit: The Astana Times
“Kazakhstan is a vital partner for India in the region. The development of transport infrastructure, including the Chabahar Port, plays a crucial role in enhancing trade efficiency and deepening our strategic engagement,” he stated.
He emphasized that continued cooperation in transport and logistics would further cement Kazakhstan’s position as a key transit hub for Indian businesses.
Prasad reiterated India’s commitment to expanding business collaborations.
“We encourage Indian enterprises to explore investment opportunities in Kazakhstan, particularly in renewable energy, pharmaceuticals, and IT. Kazakhstan’s strong industrial base and investor-friendly policies make it an attractive destination,” he said.
According to Prasad, the INSTC has reduced transportation costs and opened new trade opportunities. He described Kazakhstan as a critical node in the corridor, benefiting from enhanced connectivity with India and Iran.
“As we look to the future, connectivity will remain the backbone of India-Kazakhstan relations. Initiatives like the INSTC coupled with India’s commitment to regional connectivity provide a roadmap for deeper integration between India and Central Asia,” he said.
Geopolitical considerations and challenges
Ashok Sajjanhar, the president of the Institute of Global Studies in New Delhi, discussed historical trade ties between India and Kazakhstan, tracing them back to the Silk Road. He also addressed current geopolitical challenges affecting trade routes, including the Russia-Ukraine and Israel-Hamas conflicts.
Ashok Sajjanhar, the president of the Institute of Global Studies in New Delhi addressed current geopolitical challenges affecting trade routes. Photo credit: The Astana Times
“The Russia-Ukraine conflict, which began in February 2022, has altered access to European markets, shifting trade dynamics. Additionally, the ongoing Israel-Hamas conflict has disrupted shipments through the Red Sea and the Suez Canal, further impacting global trade,” he said.
Sajjanhar noted that India’s primary trade route traditionally runs from Mumbai through the Red Sea and Suez Canal to Mediterranean ports. However, alternative routes such as the INSTC are being explored.
He stressed the importance of Kazakhstan’s role in the corridor, which offers new trade opportunities.
He also highlighted challenges, including infrastructure issues, security threats, funding constraints, and inconsistent tariffs among member countries.
“Customs hurdles further complicate trade, as different sections of the corridor impose varying tariffs. Unlike a customs union, the INSTC operates under fragmented regulatory frameworks, leading to additional costs and inefficiencies,” he said.
“To unlock the full potential of the INSTC, political commitment and regional cooperation are essential. The corridor has made progress, with the first train successfully operational. Moving forward, countries must align their strategies and strengthen collaboration, particularly given the growing geopolitical disruptions,” added Sajjanhar.
Trade potential
Zhanat Momynkulov, the head of the political science department at Eurasian National University, described Kazakhstan as a crucial gateway to Central Asia for India, presenting vast opportunities for economic growth and technological collaboration.
“Kazakhstan, as India’s largest trade partner under the Connect Central Asia policy, should be considered one of its closest allies. The partnership fosters trade and people-to-people connectivity, with the INSTC facilitating key resource transportation, including uranium ore. However, India’s decentralized transportation, logistics, and customs systems present challenges that must be addressed to streamline economic cooperation,” he said.
Momynkulov noted that India’s expanding economy and technological expertise offer lucrative opportunities for collaboration.
“In IT and space, both countries have identified digital engineering and IT as priority sectors for investment. There is significant potential for Indian investors in areas such as skill development, e-governance, and digital public infrastructure,” he said.
He also highlighted energy as a key pillar of cooperation, with India, the world’s third-largest energy consumer, viewing Kazakhstan as a crucial supplier. Strengthening energy connections would ensure a stable supply of natural resources for India while aligning with Kazakhstan’s goal of diversifying its energy exports.
“Leveraging new strategies and forward-thinking policies will be essential for governments, businesses, and academic institutions to shape the future of India-Kazakhstan relations,” he said. “By fostering strategic partnerships and expanding trade, both nations can secure long-term economic prosperity and geopolitical stability.”
