After winning re-election, Indian Prime Minister Narendra Modi chose the Shanghai Cooperation Organization (SCO) for his first multilateral engagement. India has used the 2019 Bishkek summit to balance its approach between conflicting interests of the US and China. It stands to gain from the SCO’s peace process in Afghanistan, the decision to use local currencies for trade and the organization’s stand on terrorism.
However, India missed out on energy and connectivity opportunities emanating from the SCO, along with a chance to break ice with Pakistan.
The June 14-15 event was Modi’s third SCO summit. Having begun as the Shanghai Five in 1996, and renamed as the SCO in 2001, this organization has become a pivot to security and geopolitical issues of the Eurasian region. India’s participation in the organization is marked by its interest in energy and connectivity projects in Eurasia.
Hits for India
The biggest takeaway for India from the 2019 summit was a delicate act of balancing between the US and China. Washington and Beijing look set to remain at odds for the long term on geopolitical and economic issues. The SCO has been increasingly seen by the West as an organization to forward Chinese interests. This was highlighted even more during the 2018 Qingdao summit, where all countries in the SCO, except India, supported the Belt and Road Initiative. As it did in 2018, India stayed away from backing the BRI in Bishkek.
However, Modi this time also called out protectionist tendencies, without naming the US. In his intervention at the heads of state council meeting, he highlighted risks associated with rising tendencies of protectionism. “We need a rule-based, transparent, non-discriminatory, open and inclusive multilateral trading system focused on the World Trade Organization,” he said. This comes after the termination of the General System of Preference (GSP) benefits by the US, which will impact India’s exports.
As External Affairs Minister Subrahmanyam Jaishankar has said, “India will have to navigate US-China situation. Nuanced hedging strategies have to be handled carefully – you can end up scoring with everybody, or getting on the wrong side with everybody.” India’s strategy at the SCO is directed neither toward the US nor toward China. Through this forum, it aims to maximize its interests. While doing so, India has been able to balance between conflicting approaches of the US and China.
Another takeaway for India in Bishkek was on the issue of terrorism. India has suffered from state-sponsored terrorism emanating from Pakistan. The joint declaration adopted by SCO member states noted that security threats that are cross-border in nature require special attention, close coordination and constructive cooperation of the entire international community.
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Earlier, Modi in his intervention called for making countries accountable for aiding and supporting terrorism. The Bishkek declaration condemned terrorism and its manifestations in all forms. It called for the implementation of United Nations Security Council resolutions and UN Global Counter Terrorism Strategy without politicization and double standards.
The third important takeaway for India from the summit was with regard to the situation in Afghanistan. A briefing by the Indian Ministry of External Affairs before Modi’s visit to Kyrgyzstan for the summit highlighted peace in Afghanistan as an important issue to be taken up through the SCO framework.
A stable Afghanistan has a bearing on peace and stability in Kashmir. India has also invested more than US$2 billion in Afghanistan under its extensive development assistance program. SCO member states highlighted the importance of a peaceful Afghanistan and urged the importance of settling disputes through the SCO-Afghanistan contact group. Member states also signed a roadmap document for further action of the SCO-Afghanistan Contact Group for peace and prosperity of Afghanistan.
Last, the SCO Bishkek document highlighted that the member states are willing to adopt the practice of using national currencies among themselves. India in December 2018 proposed the idea of carrying out bilateral trade with China in local currencies. However, China rejected this proposal. Its inclusion in the SCO document is interesting; however, no detailed plan for doing so has been laid down yet.
Misses for India
This summit could be termed a lost opportunity between India and Pakistan to restart the dialogue process, which stalled after the Uri attack of 2016. The two countries were on the brink of war after the February 2019 terrorist attack in Pulwama, Jammu and Kashmir state, which was followed by India conducting cross-border air strikes on a terrorist camp in Balakot, Pakistan. It was widely anticipated that after the parliamentary elections, the new Indian government would resume talks with Pakistan. The SCO provided an ideal platform for a bilateral meet. But India’s Ministry of External Affairs clarified a day before the summit that there would be no bilateral meeting between them.
India engages with the SCO to maximize its gains on energy and connectivity. However, the 2019 Bishkek summit document hardly mentions these. The Central Asian region is the source of much of the world’s energy resources. India has not been able to exploit the full potential of this because of a lack of connectivity with the region. The opening of the Chabahar port in Iran, entering the Ashgabat agreement and the ambitious International North-South Transport Corridor (INSTC) could alter the situation for India. But the latter two are in nascent stages of development, and there was no effort made to push these two projects through the SCO summit.