Exploring prospects for India-Azerbaijan ties through connectivity projects
This paper has been authored by Ayjaz Wani, ORF.
Azerbaijan has become an attractive investment destination, connecting Europe, Central Asia, Russia, and the Indian subcontinent via the International North-South Transport Corridor (INSTC) and the Trans-Caspian International Transport Route (TITR). Indeed, over the years, India has explored various options to enhance connectivity with Russia and Europe via Azerbaijan. This brief assesses how the Western Route of the INSTC and the TITR can improve economic relations between India and Azerbaijan.
The modern India-Azerbaijan relationship is built on cultural and economic ties that materialised via the ancient Silk Route. Evidence of this history is seen at the Ateshgah fire temple near Baku, an 18th-century monument with wall inscriptions in Devanagari and Gurmukhi, and the 14th-century Multani Caravanserai in the town of Icherisheher in the oldest inhabited part of Baku. However, rivalry between Britain and the Soviet Union in the early 20 century (while India was still under British rule and Azerbaijan was a Soviet state) weakened relations between India and Azerbaijan. Following the breakup of the Soviet Union, India established ties with the newly independent countries in the Caucasus region through diplomatic efforts. India was among the first countries to recognise Azerbaijan after its independence in December 1991, establishing diplomatic ties in February 1992. In June 1998, the two countries signed an agreement on economic and technical cooperation, and in April 2007, they signed a deal to establish the India-Azerbaijan Intergovernmental Commission on Trade, Economic, Scientific and Technological Cooperation. This allowed India to establish a stronger and more meaningful relationship with Azerbaijan, creating new opportunities for cooperation and mutual benefit. However, in recent decades, China's influence in Eurasia and hostility between India and Pakistan have impeded India’s attempts to establish direct connectivity for strong trade and economic relations with the region.
Consequently, India has pursued certain connectivity projects to overcome the impediments to direct connectivity and revive its age-old relationship with the Caucasus region. In 2002, India, Russia, and Iran signed an intergovernmental agreement to construct the 7,200-km long INSTC. The INSTC is a multimodal transport route that includes sea, railways, and road links to connect Mumbai (India) to Saint Petersburg (Russia) via Iran. India also invested heavily in the Chabahar Port in the Iranian province of Sistan-Balochistan. However, these initiatives faced delays due to investment challenges after renewed US sanctions on Iran, inter-regional disputes, and bureaucratic hurdles for certain projects (such as the 628 km-long Chabahar-Zahedan railway line and 164 km Rasth-Astara railway line). Still, in July 2022, the INSTC recorded its first shipment from Russia's Astrakhan Port to India’s Jawaharlal Nehru Port.
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This paper has been authored by Ayjaz Wani, ORF.
