India’s Energy Diplomacy in Eurasia: Geopolitical and Geo-economic Perspectives 9819982804, 9789819982806

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India’s Energy Diplomacy in Eurasia Geopolitical and Geo-economic Perspectives Aslam Khan · Sandeep Singh · Bawa Singh · Amandeep Kaur

India’s Energy Diplomacy in Eurasia

Aslam Khan · Sandeep Singh · Bawa Singh · Amandeep Kaur

India’s Energy Diplomacy in Eurasia Geopolitical and Geo-economic Perspectives

Aslam Khan Department of Gandhian and Peace Studies, School of Social Sciences Mahatma Gandhi Central University Motihari, Bihar, India Bawa Singh Department of South and Central Asian Studies, School of International Studies Central University of Punjab Bathinda, Punjab, India

Sandeep Singh Department of South and Central Asian Studies, School of International Studies Central University of Punjab Bathinda, Punjab, India Amandeep Kaur Department of Economics Guru Kashi University, Talwandi Sabo Bathinda, Punjab, India

ISBN 978-981-99-8280-6 ISBN 978-981-99-8281-3 (eBook) https://doi.org/10.1007/978-981-99-8281-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore Paper in this product is recyclable.

This book is dedicated to our parents.

Preface

The book was conceptualized out of the idea that despite having the historical connectivity of the Silk Road and India’s longstanding geoeconomic, geo-cultural, and geo-civilizational ties with the Eurasian region, contemporary scholars have neglected India’s core potential area of interest for revitalizing multilateral engagements with this region in general and energy diplomacy through the lens of energy geo-economics in particular. India is recognized as a swiftly growing economy on a global scale, leading to a significant increase in its energy demand. India has been actively pursuing diversification strategies by venturing into renewable energy sectors such as solar and wind power. Nevertheless, the country’s domestic energy production remains significantly insufficient to meet its consumption demands, resulting in a notable disparity in energy supply. The Middle East region has consistently been of paramount importance in India’s energy diplomacy, countries such as Iraq and Saudi Arabia prominently figuring as leading contributors in this respect. Nevertheless, a noticeable transformation has been taken place taking into account the growing significance of the Eurasian region within the framework of India’s energy policy/diplomacy. The Eurasian region, specifically Russia and Central Asian countries such as Kazakhstan and Turkmenistan, possesses abundant energy resources, notably oil and natural gas. These countries are also seeking to expand their market presence by exploring diverse opportunities, and India, given its increasing energy demands, presents an appealing prospect for the same.

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Along with a wide gap between production and consumption of energy, also the future of India’s domestic energy production is likely to remain effected on account of factors such as underinvestment, infrastructure, and under-explored basins within the country. Against this background, the current academic endeavor has been undertaken with specific objectives in mind to deal with such a situation. Firstly, it examines India’s position in the evolving global energy landscape. In order to accomplish the stated objective, this book focused on India’s domestic energy policy. Secondly, this book sheds light on India’s diplomatic endeavors in the Eurasian region, specifically in pursuit of its energy resources through the lens of geopolitics and geo-economics. The analysis suggested that India’s energy diplomacy needs a broader outreach towards the Eurasian region in pursuit of meeting energy demand, however, the same was challenged by some factors such as connectivity, geopolitical, and geoeconomic factors. The third objective explores India’s geopolitical and geo-economic position in the Eurasian region. The analysis concludes that the increasing prominence of energy complex zones and transit countries has posed a challenge to the existing power dynamics in the region and has played a significant role in shaping a new energy geopolitical order. The work can be considered a valuable contribution to the exploration of India’s expanding diplomatic influence in Eurasian geopolitics. Finally, we express our gratitude to esteemed academic institutions such as the Central University of Punjab and Mahatma Gandhi Central University, Motihari. The library resources provided by these universities played a crucial role in the conceptualization, development, and completion of this book. We would like to extend our appreciation to Springer Nature, specifically Ms. Ashwini Elango and Ms. Aparajita Singh for their valuable contribution in transforming a preliminary concept into a comprehensive book. Motihari, India Bhatinda, India Bhatinda, India Bhatinda, India

Aslam Khan Sandeep Singh Bawa Singh Amandeep Kaur

About This Book

This book explores the dynamics of power relations in the Eurasian region, with a specific emphasis on the energy diplomacy pursued by India in response to the changing geopolitical context. This book delves into the intricate challenges that India’s foreign policy encounters in light of the emergence of Russia and China as influential actors in the area. It examines the complications arising from new energy alliances, geopolitical rivalries, and the evolving dynamics following the end of the Cold War. The analysis explores significant subjects including Russia’s position as a conventional energy provider, China’s energy routes across Central Asia, India’s prospects under its Connect Central Asia policy, the geopolitical aspects of oil and gas pipelines, and the strategic consequences for India in light of these advancements.

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ABOUT THIS BOOK

This book provides a comprehensive examination of the dynamic changes occurring in the geopolitical and geo-economic landscape of the Eurasian region. It will be an invaluable resource for scholars and researchers specializing in international relations, global politics, foreign policy, energy studies, Central Asian studies, geopolitics, and strategic studies. Aslam Khan Associate Professor Sandeep Singh Assistant Professor Bawa Singh Associate Professor Amandeep Kaur Assistant Professor

Contents

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Theoretical Underpinnings of Energy Security and Energy Diplomacy in Global Context: Reconnoitring India’s Position Energy Security and Energy Diplomacy: Intertwined Concepts Contextualizing Energy Security Why “Diplomacy”? Energy Diplomacy: Shaping the Foreign Policy Rise of Globalization of Energy: Changing Paradigms of Global Energy Governance Major Structural Changes in Global Energy Regime Growing Phenomenal Role of Global Energy Governing Institutions Regional Energy Governance Structural Changes in the Emerging Economies in the Asian Super-Complex Growing Role of National Oil Companies (NOCs) Expanding Network of Pipelines and the Changing Face of Transit Countries Rising Climate Change Concerns Global Energy Governance: An Unlikely Concept Persistent Problems Reconnoitering India’s Position on Global Energy Issues: An Overview of Its Governing Capacity References

1 3 4 7 10 16 18 19 29 30 32 33 35 37 39 42 49 xi

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CONTENTS

Identifying and Addressing India’s Energy Challenges: A Policy Assessment Profiling India’s Energy Potential: Oil and Gas Sector Sectorial Snapshot of Oil and Gas Landscape in India—Pertaining Issues Upstream Sector Mapping India’s Engagement in Global Energy Landscape Natural Gas Demand-Supply Scenario Midstream and Downstream Sector Subsidization and Pricing Issue—A Political-Bluff Governmental Consumer-oriented Initiatives Indian Energy Policy: A Domestic Perspective Policy Perspectives and Visions An Appraisal References India’s Quest for Energy Security in Eurasia: A Conceptual Assessment of Energy Diplomacy Eurasia: The Pivot of Indian Foreign Policy India’s Defensive Realism in Eurasian Energy Theatre: A Theoretical Underpinnings Eurasia: A Matter of Importance? India’s Re-orientation Towards Eurasia—Rationales Conceptualizing Eurasia in India’s Energy Diplomacy Understanding of India’s Eurasian Policy Through Paradigmatic Model 1990s: Paradigm of Self-reliance and Re-adjustments 2000–10: Paradigm of Strategic Realization and Re-alignments Onwards: Paradigm of Geopolitical Developments and Geo-economic Reorientations References Eurasia Factor in India’s Energy Diplomacy: Paradigmatic Shifts in Corridor Approach to Connectivity India’s Energy Diplomacy Towards Eurasia: Connectivity and Pipelines Chabahar Port INSTC: Corridor for Energy Potential Trade

57 59 68 68 76 78 80 85 89 93 97 103 105 111 113 115 118 119 124 129 130 131 133 137 141 142 146 150

CONTENTS

India’s Import and Export with INSTC Countries in Petroleum Products Pipelines Pipedreams SCO India’s Energy Business-shafts Interest Convergence Analysis: Knitting India into Eurasian Framework References 5

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155 159 161 163 163 171

India and Eurasia Economic Cooperation: Analyses of Trends and Potentials Economic Institutionalization Between India and Eurasia India and Eurasia: Status and Structure of Economies India and Eurasia: FDI Inflows Trade Between India and Eurasia India’s Trade Trends with Eurasian Countries Trade Concentration Index India’s Investment in Eurasia Challenges of Economic Relations Between India and Eurasia India and Eurasia: Economic Potential Areas Conclusion References

179 180 185 191 196 197 206 207 211 212 214 217

Indo-Eurasia Relations: Contextualizing the Energy Economics Indo-Eurasia: Energy Complementarities and Cooperation World’s Energy Profile India’s Energy Profile Eurasia’s Energy Profile Indian and Eurasian Republics: Energy Economics India’s Energy Quest: Regional Geopolitical Challenges Way Forward References

219 221 224 239 243 248 251 253 255

Energy Geopolitics of Eurasia: Challenges and Options for India’s Energy Diplomacy Existing Uncertainties: How Energy Is Inducing Geopolitical Antagonism? Energy Geopolitics: “Geopolitical Uncertainty Determines Interests?”

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Multi-Vector Approach of Energy Complex Zone Countries towards Major Powers Kazakhstan Turkmenistan Uzbekistan Azerbaijan Major Powers to Pivot Eurasia: Deconstructing Energy Geopolitics Russia’s Pivot to Eurasia The US-EU’s Pivot to Eurasia China’s Pivot to Eurasia India’s Pivot to Eurasia: Challenges and Options Challenges Options References Index

266 266 268 269 271 274 275 280 285 290 294 300 303 313

Abbreviations

ADB AIIB APEC APTTA ASEAN BASIC BGEPIL BP BPCL BPRL BRICS BRPL BTC BTE CAC CAREC CARs CCAP CEPA CERM CIS CNOOC CNPC CPEC CPCL CSTO

Asian Development Bank Asian Infrastructure Investment Bank Asia-Pacific Economic Cooperation Afghanistan-Pakistan Transit Trade Agreement Association of Southeast Asian Nations Brazil, South Africa, India and China BG Exploration & Production India Ltd. British Petroleum Bharat Petroleum Corporation Limited Bharat Petro Resources Ltd. Brazil, Russia, India, China and South Africa The Bongaigaon Refinery & Petrochemicals Ltd. Baku–Tbilisi–Ceyhan pipeline Baku–Tbilisi–Erzurum Central Asia-Center Gas Pipeline Central Asian Regional Economic Cooperation Central Asian Republics Connect Central Asia Policy Comprehensive Economic Cooperation Agreement Coordinated Emergency Response Measures Commonwealth of Independent States China National Offshore Oil Corporation China National Petroleum Corporation China-Pakistan Economic Corridor Chennai Petroleum Corporation Limited Collective Security Treaty Organization xv

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ABBREVIATIONS

EAEC EAEU EPCA FFFAI FICCI FIPB GAIL GECF HELP HPCL IEF IISD INSTC IOCL IPI ISPRL ITIDKDY NSR NSSO OIL ONGC OPEC OSCE PNGRB PSCs PSUs QTTA RATS RGPPL RSCs SCO SOCAR TANAP TAP TAPI TCOP TCOTS TFA TII TTTA UNESCAP

Eurasian Economic Community Eurasian Economic Union Enhanced Partnership and Cooperation Agreement Federation of Freight Forwarders’ Associations in India Federation of Indian Chambers of Commerce and Industry Foreign Investment Promotion Board Gas Authority of India Limited Gas Exporting Countries Forum Hydrocarbon Exploration and Licensing Policy Hindustan Petroleum Corporation International Energy Forum The International Institute for Sustainable Development International North–South Transport Corridor Indian Oil Corporation Ltd. Iran-India-Pakistan Pipeline Indian Strategic Petroleum Reserves Limited Istanbul-Tehran-Islamabad-Delhi-Kolkata-Dhaka-Yangon Corridor New Silk Route The National Sample Survey Office Oil India Limited Oil and Natural Gas Corporation Limited Organization of the Petroleum Exporting Countries Organization for Security and Cooperation in Europe Petroleum and Natural Gas Regulatory Board, India Public Sharing Contracts Public Sector Undertakings Quadrilateral Traffic in Transit Agreement Regional Anti-Terrorist Structure Ratnagiri Gas and Power Private Limited Revenue Sharing Contracts Shanghai Cooperation Organization The State Oil Company of Azerbaijan Republic Trans Anatolian Pipeline Trans Azeri Pipeline Turkmenistan-Afghanistan-Pakistan-India Pipeline Trans-Caspian Oil Pipeline Trans-Caspian Oil Transportation System Trade Facilitation Agreement Turkmenistan-Iran-India Gas Pipeline Trilateral Transit Trade Agreement United Nations Economic and Social Commission for Asia and Pacific

List of Figures

Fig. 1.1

Fig. 1.2 Fig. 2.1

Fig. 2.2

Hypothetical energy security complex between exporting and importing countries as conceived by the research scholar Crude oil prices (US$/Barrel) (Source BP Statistical Review, 2022) India’s energy infrastructure and supply chain management (Note IOCL, BPCL, HPCL, IGL, CPCL, BRPL, and BP are downstream companies. The ONGC and OIL, Reliance, BGEPIL, Cairn India are upstream companies. Midstream companies are IOCL and GAIL. Most of the upstream companies also do the midstream and downstream operations themselves. Source Ministry of Petroleum and Natural Gas, India Brand Equity Foundation) India’s Sedimentary basins of established and prospective oil and gas explorations area (sq. km) (Source Ministry of Petroleum and Natural Gas)

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LIST OF FIGURES

Fig. 2.3

Fig. 3.1

Fig. 4.1 Fig. 4.2 Fig. 4.3 Fig. 4.4 Fig. 7.1 Fig. 7.2 Fig. 7.3

Map 2.1

Map 3.1

Map 4.1

Map 4.2 Map 4.3

Map 7.1

Indian Institutional Mechanisms to Deal with Energy Policy (Notes PSU = Public sector undertaking (state-owned enterprise). Other ministries with responsibilities relevant to the energy sector include the Ministry of Urban Development, Ministry of Water Resources, Ministry of Agriculture, Ministry of Finance, and the Department of Science and Technology. Source International Energy Agency [IEA], 2023) India’s diplomatic orientations towards pragmatic paradigms shifts in Eurasia in different time periods (Source Prepared by the researcher) Share of INSTC countries in India’s petroleum products exports Share of INSTC countries in India’s petroleum products imports Share of INSTC countries in India’s total export (Source UN Comtrade; ITC Trade Map) Share of INSTC countries in India’s total imports Energy geopolitics of Eurasia in a critical perspective (Source Prepared by the Researcher) Russia’s oil export by region (2015) (Source Roseth [2017, p. 47]) Total trade between Host Zone’s and major stakeholders, 2021 (Source ITC Trade Map, 2021) Sedimentary basins of Indian sub-continent (Source Ministry of Petroleum and Natural Gas, Directorate General of Hydrocarbons, GOI) India’s corridor approach towards Eurasia for energy security and trade cooperation (Source ArcGIS Lab, Central University of Punjab, Bathinda, 2022) Iran transit Corridor to Central Asia and Caucasus Republics (Source International North–South Transport Corridor [INSTC]: Dry Run Report 2014) Qazvin-Rasht-Astara railway link (Source Meena Singh Roy [2012]) Current geographic landmass of SCO (Source Empty map from Central Intelligence Agency [CIA]—The Worldfactbook, 2021 and edited by Researcher) Supply routes of northern distribution corridors (Source Lee, 2012)

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135 157 157 158 158 264 278 287

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List of Tables

Table 1.1 Table 1.2 Table 1.3 Table 1.4 Table 2.1 Table 2.2 Table 3.1 Table 5.1 Table 5.2 Table Table Table Table

5.3 5.4 5.5 5.6

Table Table Table Table

5.7 5.8 6.1 6.2

Productions and consumptions trends of conventional energy resources by countries grouping, 1990–2021 World proven crude oil reserves (billion barrels) IEA outlook for global primary energy demand and energy-related CO2 emissions by scenario India’s engagement in the global energy governance Institutions Crude oil, petroleum products, and natural gas pipeline networks in India Comparative assessment of NELP and HELP in India Energy profile of major producers in Caspian and Caucasus region Population and density (2022) GDP per capita of India and Eurasian countries (current US$) FDI Inflows of India and Eurasian Republics (US$millions) Exports of India with Eurasian countries (US$million) Imports of India with Eurasian countries (US$million) Trade concentration Index between India and Eurasian countries Indian investments in joint ventures in Eurasia Sectors in which India invested in the Eurasian World’s oil and gas production and consumption Major Crude Oil Output of Middle East Countries (Thousand pb/d)

17 23 36 48 82 101 122 185 188 192 198 199 208 210 211 225 228

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LIST OF TABLES

Table 6.3 Table 6.4 Table 6.5 Table 6.6 Table 6.7 Table 6.8 Table 6.9

Major Gulf countries gas production/consumption (Billion Cubic Metric) World’s leading countries crude oil imports (Thousand pb/d) World’s leading countries natural gas imports (Billion Cubic Metric) India’s oil and natural gas production/consumption Eurasian oil and gas reserves (Thousand Million pb/d) India’s crude oil and petroleum products imports from EURASIA (US$million) Crude oil prices of various oil exporting countries/ regions (US$p/b)

232 236 238 242 247 249 252

CHAPTER 1

Theoretical Underpinnings of Energy Security and Energy Diplomacy in Global Context: Reconnoitring India’s Position

In the contemporary era, the global community is currently grappling with a pronounced energy crisis and the consequential challenges of resource mobilization. These circumstances have significant implications for the shifting global balance of power. The concept of security is posited to derive from the perception of potential dangers and instances of crises. Energy is a phenomenon that is closely linked to security and necessitates a comprehensive understanding through a rational approach. The interplay between the preservation and acquisition of energy resources, as well as the buying and selling of these resources, has contributed to the volatility of contemporary international politics (Moran & Russell, 2009). The global energy consumption landscape has undergone a geographical shift, with production and consumption patterns transitioning from Western regions to Eastern regions (Peter, 2013). Therefore, it is essential to closely monitor the intricacies of global energy dynamics in order to comprehend the intricacies and fluctuations occurring in international politics and relations. The energy crisis mostly arises from three key energy commodities, namely oil, gas, and coal. The demand for energy has exhibited a constant upward trend since the advent of the industrial revolution in the eighteenth century. The overutilization of fossil fuels has resulted in their overconsumption, thereby emerging as a contributing factor to the current energy crisis.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3_1

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Energy is widely recognized as an essential necessity for contemporary lifestyles in the context of a rapidly globalizing globe. There is a need for international unity in addressing the issue of energy provision. Nevertheless, according to May (2010, p. 20), an energy specialist, it was stated that the desired state has not yet been achieved. Instead, this situation has led to a competitive pursuit of energy resources among various nations. The current global energy crisis is expected to have a significant impact on the upcoming COP27 Climate Change Conference in Egypt. Additionally, it is hindering efforts to ensure widespread access to affordable and dependable energy, especially in developing regions where the number of people without electricity is increasing. According to the latest data provided by the International Energy Agency (IEA), it is anticipated that there will be a significant increase of around 20 million people worldwide who would lack access to electricity in the year 2022. The recent surge in electricity deprivation is projected to lead to a significant increase, with over 775 million individuals worldwide lacking access to electricity. This represents a notable milestone as it signifies the first global rise in this metric since the International Energy Agency (IEA) began monitoring it twenty years ago (IEA, 2023). Simultaneously, the increasing disparity between developed and developing nations will impose further strain, as emerging economies such as China and India endeavor to secure access to electricity and other energy resources with the aim of enhancing the quality of life for their populations (Khaas & Gertz, 2010, p. 7). According to Veseth (2010, p. 42), the essential factors for obtaining access to necessary energy resources in contemporary times are ownership, financial capability, and political and economic flexibility. The issue has prompted the international community to consider the increasing significance of energy geopolitics in connection to future evaluations of global politics. This chapter explores the foundational concerns and aims to analyze the ongoing structural transformations in the global energy sphere. This report offers a succinct assessment of the growing impact of India on the current global energy landscape, focusing on its active engagement in the domain of global energy governance.

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Energy Security and Energy Diplomacy: Intertwined Concepts Energy security and energy diplomacy are closely connected and interdependent topics within the realm of global energy politics. Energy diplomacy serves as a strategic instrument for attaining the goals of ensuring energy security. Put simply, the attainment of energy security is contingent upon the effective execution of energy diplomacy. Prior to the advent of the industrial revolution in the eighteenth century, researchers had engaged in discussions pertaining to energy security with a primary focus on the supply side. This perspective underwent a significant transformation with the onset of the industrial revolution (De Vries, 1994). The pursuit of energy security has given rise to geopolitical competition, which may be observed within the framework of contemporary military warfare. As a result, ensuring energy security has emerged as a fundamental aspect of the strategic foreign policy pursued by both established and developing nations. At present, the concept of energy security is being examined with regard to the dependable availability of energy supplies, as well as the geopolitical, environmental, and geo-economic obstacles that influence policy development at both international and national levels (World Energy Council & Oliver Wyman, 2016). Yergin (2006) has provided evidence to support the notion that the understanding and definition of energy security differ between nations, influenced by factors such as their specific energy needs, access to natural resources, geographical characteristics, and geopolitical and geo-economic factors. Producing and exporting countries aim to ensure uninterrupted access to global energy markets for the purpose of selling their energy products. Conversely, consumer and energy importing countries prioritize guaranteed access to reliable energy supply at affordable rates to facilitate their economic and social progress. The interconnectedness between global energy security and energy diplomacy has significant consequences for both rich and developing countries’ foreign policies. This relationship has evolved over time, from the traditional era to the transitional period and finally to the contemporary era.

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Contextualizing Energy Security The existing corpus of scholarly works in the field of International Relations (IR) is characterized by a discourse that revolves around two divergent perspectives. One perspective influenced by realism is the “geopolitical” approach, which views energy as a possible source of conflict characterized by a zero-sum game. Conversely, there exists a perspective on “global energy governance” that is influenced by liberal ideology, emphasizing the importance of interdependence and cooperative dynamics within the energy sector. However, the International exchanges (IR) approaches discussed earlier demonstrate limitations in their capacity to completely grasp the intricate range of political factors that shape inter-state energy exchanges when they adopt a systemic viewpoint. The theory proposes that the process of energy securitization, wherein governments portray energy as a potential danger to the core interests of the state, is susceptible to variability and dependence on specific circumstances. The occurrence occurs in areas where energy-related issues are intertwined with economic, political, and/or geopolitical security concerns, leading governments to adopt nationalistic policy frameworks that result in international conflicts over energy resources. The rectification of the systemic bias inherent in geopolitical and global energy governance theories is achieved through the explanation of international energy interactions as a consequence of securitization. The scope of energy politics is broadened beyond the systemic level to acknowledge that energy is involved in a wide array of domestic and foreign policy matters. The manner in which governments address energy interdependence varies based on their distinct economic systems, political institutions, and geopolitical linkages. One crucial aspect is its ability to address a previously unaccounted variable by providing an explanation for the securitization process, rather than making assumptions or disregarding it. The conceptual framework of systemic theories is insufficient for examining state-specific elements, notwithstanding their ability to infer state behavior based on the presumed structure of the energy coordination game. The experiences of Russia and Australia serve as illustrations of how state-specific factors play a crucial role in influencing the divergent responses of governments to exogenous developments in global energy markets, despite the presence of similar elements. The utilization of a securitization method allows for a comprehensive examination of the

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energy policy-making process, encompassing both domestic and foreign factors. This approach offers a more detailed understanding of the process compared to systemic international relations theories. Furthermore, this methodology presents a compromise between the forecasts made by the current international relations methodologies. As previously said, these ideas offer conflicting and incompatible explanations. The geopolitical perspective posits that the zero-sum nature and securitized aspects of energy interdependence would ultimately lead to conflicts. On the other hand, the global energy governance viewpoint believes that positive-sum dynamics foster international collaboration instead. The strategy detailed in this paper posits that both behavioral logics have the capacity to manifest, and their relative prevalence is contingent upon the presence of securitization factors. When the levels of these factors are elevated, either due to market cycles or the political characteristics of specific states, the anticipated conflictual conduct outlined by the geopolitical approach becomes the prevailing pattern. The dominance of the cooperative logic indicated by the global energy governance method is observed when there is a decrease in securitization demands. The aforementioned scenarios illustrate that the varying presence of forces that prioritize security explains why governments in similar structural positions choose either conflictual (Russia) or cooperative (Australia) strategies when it comes to energy interdependence. The adoption of a political economy approach allows for a departure from the oversimplified and heavily criticized dichotomy between states and markets that currently dominates the international relations literature on energy. Based on the underlying assumption, this argument provides limited insight into the potential trajectory of energy politics in the future. In contrast, employing a securitization-based strategy provides distinct and discernible forecasts. The proposition posits that market cycles play a significant role, wherein periods of economic expansion contribute to the emergence of conflicts, while periods of economic contraction foster cooperative behavior. However, this also implies that the response of governments to securitizing demands is influenced by characteristics peculiar to each state. States that heavily rely on energy resources for their economic sustenance, sometimes referred to as rentier states, as well as governments with challenging diplomatic connections, are more prone to engaging in behaviors that are characterized by conflict. Countries that have advanced economy, democratic systems, and stable geopolitical positions are less susceptible to these inclinations. This analysis presents a

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more intricate portrayal of global energy politics compared to the allencompassing viewpoint put out by international relations theories. It achieves this by conceptualizing energy politics as a multifaceted and politically disputed sphere within the modern world political economy. The Energy Charter Secretariat has addressed the idea of energy security, focusing on the availability, accessibility, and transportation of energy resources, as perceived by exporting, importing, and transit nations. The primary focus of energy security for importing nations revolves around ensuring the reliability and stability of supply, which is regarded as a crucial aspect of foreign policy. Additionally, these countries want to fulfill their domestic energy requirements, as previously emphasized. The foreign policy of nations that export energy resources generally centers around ensuring the security of demand for their exports. Additionally, these countries also prioritize the security of their domestic energy supply. In both circumstances, the significance of robust diplomacy is underscored, necessitating the refinement of foreign policy through the incorporation of geopolitical and geo-economic elements. Pauwelyn (2010) has provided support for the notion that the concept of energy security is closely tied to the principles of sovereignty and security considerations. The initial semester focuses on energy-abundant nations. The extraction, utilization, and preservation of finite energy resources are frequently regarded as the prerogative or determination of the nation. In contrast, nations experiencing energy deficiencies prioritize security factors related to supply stability, market control, and supply hazards. They also emphasize the diversification of their energy sources and the feasibility of accessing foreign energy options. The transmission of energy has become a significant matter for both exporting and importing nations, as well as for transit countries such as Ukraine, Moldova, Turkey, and Belarus. These transit countries benefit economically by charging transit fees (Mathur, 2014, p. 3). The concept of energy security has proven to be a difficult notion that requires a comprehensive understanding in order to fully appreciate its significance in promoting economic progress for nations. Nevertheless, the prevailing perception regarding energy security primarily centers on two key aspects: the assurance of demand for countries engaged in energy exports, and the guarantee of supply for those reliant on energy imports. The concept of energy security holds a close relationship with the notion of accuracy in each of the aforementioned circumstances. This suggests that the attainment of energy security can be realized by effectively understanding and using the synergistic

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dynamics between producer and consumer relationships. In the current era characterized by interdependency, the global landscape is seeing a paradigm shift towards a new dynamic involving reconciliation, confrontation/competition, and mutually beneficial opportunities that arise from shared vulnerabilities (referred to as a zero-sum game) for states involved, whether in terms of their foreign or domestic policies. Hence, the attainment of energy security necessitates the adoption of a rigorous foreign policy, wherein energy diplomacy assumes a central role in the development of energy policy domestically and its execution on the international stage. Why “Diplomacy”? The role of diplomacy has consistently held great importance in effectively implementing the international policies of nations, as it serves to reinforce their natural connections. Diplomacy within the framework of international politics is commonly referred to as soft power, a concept that has been in existence for a considerable period of time. The origins of this practice can be traced back to the system of managing interactions among ancient Greek City-states. The concept experienced a resurgence throughout the medieval era in Europe and subsequently became prominent during the post-reformation period inside European nations. The phenomenon under consideration can be classified as a form of sophisticated diplomacy and a dynamic exchange of ideas and perspectives among representatives in the realm of international affairs. There is a contention that diplomacy holds value and utility just when a nation have the capability to reinforce its soft power with hard might (Nye, 2011, p. 47). Hence, the diplomatic principles upheld by a nation are contingent upon its power and hegemonic position within the realm of geopolitical interactions. The utilization of hard power frequently manifests as a coercive approach aimed at exerting influence or effecting behavioral modifications in other nations or international entities. On the contrary, soft power can serve as a diplomatic ideology for achieving foreign policy goals (Nye, 2004, p. 5). Diplomacy serves as a mechanism through which powerful nations can exert influence over comparably weaker nations, particularly in matters pertaining to climate change, energy, poverty, and security (Nye, 2004, p. 4). According to Nye (2004, p. 3), an analysis has been conducted on the relationship between diplomacy and the specific

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power dynamics at play, as well as the particular resources that influence one’s behavior in wielding power. In the post-industrial age, oil has emerged as a significant and influential commodity, while in the nuclear age, uranium has similarly gained prominence. It is widely acknowledged that the prospect of war or economic instability is universally undesirable. This sentiment stems from the recognition that in the contemporary day, characterized by the presence of nuclear weapons, warfare has become a measure of last resort employed solely for the purpose of safeguarding and advancing one’s own interests (Cohen, 2004). Consequently, the concept of soft power (Nye, 2004) has led to a shift in focus for states, with diplomacy assuming a position of utmost importance. It is evident that as China continues to strengthen its military capabilities, it concurrently enhances its capacity to exert hard power. This notion is supported by the observation that an increasing number of individuals are engaging in cultural exchanges, such as the acquisition of language skills and the study of many aspects of Chinese culture, including art, music, and architecture. The acquisition of cultural knowledge serves as a significant diplomatic instrument. The hosting of the 2008 Beijing Olympics provided a significant platform for fostering international relations through a conspicuous demonstration of diplomacy, ultimately elevating China’s global prominence (Sands, 2008). Diplomacy has a crucial role in advancing the geo-cultural, geopolitical, and economic objectives by influencing the foreign policy of individual nations or international organizations. In light of evolving dynamics, ongoing crises such as civil wars, and the pressing energy crisis, it is imperative to implement necessary reforms in the field of diplomacy to ensure its continued relevance. In the context of globalization, there is a notable acceleration in various aspects of life. The extent and content of diplomatic activities have been growing at an exponential rate, resulting in an unprecedented and persistent phenomenon. Furthermore, this has led to a redistribution of power both among nations and inside nations. The Arab Spring serves as a notable illustration in this regard. Certain nations are experiencing a partial decline in their authority, while concurrently, other countries are rising as influential entities to compensate for this void (Mingst, 1999). Potential examples of entities that may fall within the scope of discussion include multinational corporations with substantial revenue streams, prominent individuals with significant financial influence, and worldwide non-governmental organizations. Terrorist groups, among other examples, can possess substantial

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political implications. The observation is made that in the event of diplomatic failure, various critical elements such as peace, prosperity, stability, and sovereignty are placed in jeopardy. The implementation of low-level diplomacy facilitates the opportunity for the military to assume control. The absence of diplomatic efforts in Afghanistan and Iraq has resulted in the observation of significant casualties caused by non-state actors engaging in violent actions (Steans et al., 2010). Hence, the adept application of diplomatic strategies is necessary in order to safeguard and advance national interests. In the contemporary era, the current state of diplomacy, characterized by its novel manifestations and established principles, is frequently perceived as predominantly peaceful. However, it can also be regarded as deceitful when it confronts the prevailing global governance framework. The renowned Indian scholar of governance and international relations, Kautilya (371–283 B.C.), has aptly conceptualized diplomacy as encompassing four key elements: Saam, which involves the use of advice, pacification, persuasion, and cognitive potential; Daam, which entails offering incentives, alluring, and engaging in transactions; Dand, which refers to the imposition of punishment and instilling fear; and Bhed, which involves exploiting secrets and employing policies of division and rule (Modelski, 1964). Many countries continue to employ the foundational principles of these four techniques in the present day. As an illustration, it can be observed that the United States has refrained from engaging in direct military conflict with Iran. Instead, a strategy of employing economic sanctions has been adopted as a means of exerting pressure in order to persuade Iran to align with the United States’ perspective. The primary focus of Indian diplomacy lies in the reengagement and exploration of the wider neighborhood, encompassing Central Asia, West Asia, and South East Asia, as well as the maintenance of bilateral partnerships. In addition to engaging in geopolitical and geo-economic activities throughout Asia, Indian diplomacy has also encompassed diplomatic negotiations with key nations such as the United States, Russia, China, and Israel, among others. Therefore, the primary objective of diplomacy is to safeguard the national interests as delineated and articulated by the foreign policy of a particular country.

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Energy Diplomacy: Shaping the Foreign Policy Throughout the course of human history, energy resources have served as a significant factor in influencing foreign policy and military actions. In the present context, the term “energy diplomacy” has gained significant prominence and is frequently employed in the realm of international political affairs. The term “energy diplomacy” lacks a universally agreedupon definition, but it is commonly understood as the strategic use of diplomatic tactics and skills by a nation to advance its foreign policy objectives in relation to other countries, taking into consideration geopolitical and geo-economic factors. Various forms of diplomacy can be observed, such as defense diplomacy, economic diplomacy, security diplomacy, energy diplomacy, and debt-trap diplomacy, among others. Energy resources have been identified as a crucial component of national security, leading to the integration of energy security into foreign policy objectives. This objective can be effectively pursued through the implementation of energy diplomacy. Goldthau (2010, p. 25) has provided a comprehensive analysis of energy diplomacy, specifically focusing on the cases of Russia as a producing country and China as a consumption country. The emerging consumer countries, such as China, have increasingly engaged in numerous business agreements facilitated by their state-owned enterprises (such as CNPC and CNOOC) as part of their state diplomacy efforts. These agreements aim to obtain access to foreign energy resources in order to fulfill their growing energy demands. On the other hand, it is noteworthy that producer nations such as Russia have exhibited a tendency to enhance the influence of Gazprom in various energyabundant places (such as the Caspian Sea, Central Eurasia, and North Africa) as a means of augmenting their domestic energy reserves through the utilization of state-supported diplomatic strategies. These two modalities can be classified as energy diplomacy, as they enable firms to gain a competitive advantage in the bidding process for energy resources by leveraging the authority of the state. Hence, consumer nations enhance the resilience of their supply chains by strategically securing energy contracts that are advantageous to their interests through diplomatic means. Producer countries often seek to enhance their access to markets and reserves by employing diplomatic strategies in order to attain energy security. The diplomatic objectives of exporting and importing countries encompass both geopolitical and geo-economic interests, as depicted in Fig. 1.1.

1

THEORETICAL UNDERPINNINGS OF ENERGY SECURITY …

Energy Diplomacy

11

Energy Security

Securing Demand

Energy and Global Politics

Potential Energy Crisis

Interactions between/am ong PolicyMakers

Geopolitical and Geoeconomic Components

Energy Diplomacy Securing Supply

Energy-Import Countries (Foreign Policy)

Energy Security

Demand and Supply Balance

Energy Diplomacy

Geopoltical and geoeconomic components

Energy Security Fig. 1.1 Hypothetical energy security complex between exporting and importing countries as conceived by the research scholar

According to the definition provided by Giuli (2015), energy diplomacy refers to diplomatic endeavors that aim to improve the availability of energy resources. The dynamics of diplomacy have undergone significant transformations, notably under the context of globalization and industrialization. The Congress of Vienna in 1815 established a framework for the implementation of a structured and enduring diplomatic system among nations. Following the conclusion of World War I, a shift towards a more transparent and inclusive form of diplomacy became evident, a trend that persisted throughout the duration of World War II (McLean & McMillan, 2003). In the early decades of the twentieth century, significant oil discoveries occurred in the Persian region. The geopolitical conflicts between the Russian Empire and the British Empire resulted in their respective attempts to exert authority over the region of Persia (Fromkin, 1979). Similarly, it is widely thought that the occurrence of World War II was influenced by the United States’ imposition of an oil embargo on Japan, a country heavily reliant on oil imports, with the intention of pressuring Japan to withdraw its military forces from the seized regions of China

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(Priest, 2012, p. 236). According to Sagan (1988, pp. 893–894), the oil embargo imposed on Japan was a contributing factor to Japan’s decision to declare war on the United States through the attack on Pearl Harbor in December 1941. According to Kay (2006, p. 33), the control exerted by the Soviet Union on Caspian energy resources was identified as a significant factor contributing to Germany’s invasion of the Soviet Union in 1941. The latter half of the twentieth century witnessed the decline of empires and the emergence of the Cold War, which brought about an ideological conflict between the capitalist and communist blocs. This period also saw the formation of the Non-aligned Movement (NAM), which represented a significant change in the conduct of recently independent nations and had an impact on the equilibrium between supply and demand (Heywood, 2011). Consequently, the global energy actors have directed their attention into energy diplomacy. The United States established a dominant presence in the geopolitical landscape of oil in the Gulf region, specifically in Saudi Arabia, Lebanon, Kuwait, Jordan, and Iraq. This was in contrast to the Soviet Union, and the United States achieved this through the utilization of peace and security operations that were supported by the United Nations. The founding of the Organization of the Petroleum Exporting Countries (OPEC) in the 1960s is considered a significant development in the field of international oil diplomacy (Hinnebusch, 2015, pp. 32–34). The utilization of oil as a strategic tool to manipulate global oil market prices was employed as a political instrument. The aforementioned approach was once again implemented during the Iran-Iraq Conflict (1978–1989), resulting in a significant surge in the price of oil, escalating from $1.8 per barrel in 1970 to $36 in 1981 (Fig. 1.2). The intergovernmental organization presented the United States with a complex predicament, specifically in relation to oil price speculation, during the Gulf War (1990–1991). Nevertheless, the increasing control of producing countries over energy pricing was met with diplomatic resistance from consumption nations and economically troubled capitalist countries, operating under the guidance of the International Energy Agency (IEA) (Yergin, 2006, p. 81). The OPEC members found themselves in a state of uncertainty, leading them to implement a reduction in the price of oil to a range of $27–29 a barrel throughout the 1980s. According to the BP Statistical Report (2016), there was a decrease in the price of oil to $14–18 a barrel between 1986 and 1989.

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This reduction in price resulted in a 15% loss in oil production by the Organization of the Petroleum Exporting Countries (OPEC), as depicted in Fig. 1.2. Simultaneously, notwithstanding certain variations among the member nations of the Organization of the Petroleum Exporting Countries (OPEC), it consistently retained its dominant position in establishing oil prices in relation to countries that import oil. Following the collapse of communism and the subsequent dissolution of the Soviet Union, significant geopolitical and geographical transformations occurred within the Eurasian region. Several prominent emerging economies, including India, China, South Korea, Pakistan, Ukraine, Belarus, and Brazil, have experienced a notable shift towards becoming net importers of oil. This transformation can be attributed to significant policy shifts within these countries (Cherp & Jewell, 2014, pp. 416–417). The recent debates have established connections between energy security and policies related to development. The rise of energy-rich economies in Caspian countries, such as Uzbekistan, has significantly impacted the geopolitical landscape of the region. European countries, notably the United States, have been actively seeking to establish a presence in the energy market of this region, particularly in the period following the Cold War. Daojiong (2006, pp. 180–182) has provided evidence indicating that the domestic and foreign policies

Oil prices 111.67

$120.00 Political Instabiility and Financial crisis

Prices in Dollers

$100.00

$80.00

Iranian Revolution

Lebanan Conflict

Iran-Iraq

$60.00

Iraq war 9/11

$40.00

Asian Financial crisis Gulf

$20.00

$0.00 1970

1975

1980

1985

1990

1995

2000

2005

2010

Fig. 1.2 Crude oil prices (US$/Barrel) (Source BP Statistical Review, 2022)

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of Caspian countries may raise concerns regarding their compatibility with the objectives of American and European nations. China’s energy diplomacy has placed Western countries in a state of uncertainty over the underlying strategic intentions. According to Sangar (2016, p. 65), American diplomats are currently referring to this particular region as the “Greater Middle East” with the intention of diminishing Russia’s influence in Central Asia and fostering integration of the region with the area governed by the United States, specifically Afghanistan. For almost two decades, regional nations such as China, Pakistan, Iran, and India have actively engaged in the geopolitical dynamics of the Eurasian energy region. In light of these circumstances, the Eurasia area has emerged as the focal point of geopolitical dynamics pertaining to energy resources and the diplomatic negotiations around pipeline infrastructure. China has had significant economic growth and has surpassed the United States to become the largest consumer of energy globally in 2013 (IER, 2015). China has increasingly turned its attention to the Eurasian region as an alternative to the Middle East because of the ˙ seri, 2009, p. 43). The escalaextensive border connection it offers (I¸ tion of energy consumption in 1988 exerted additional strain on China’s economy, resulting in its transition to a net importer of oil products in 1993 and a net importer of crude oil in 1996 (Kenny, 2015, p. 2). The participation of China in the pursuit of its strategic and energy objectives in Central Asia has significantly rekindled the concept of the “New Great Game.” Simultaneously, following the implementation of economic liberalization policies in the 1990s, India has had an upward trajectory in its development and subsequently transitioned into a net energy importer. As a result, the involvement of Indian foreign policy and energy diplomacy has been observed (Ahn & Graczyk, 2012). However, the energy-rich Eurasian region has been actively seeking new market opportunities due to shifting geopolitical factors. There exists a considerable amount of potential and synergies in energy collaboration between the South and Eurasian regions. India has been endeavoring to leverage these complementarities in the context of its national energy security. The expanding energy security and geopolitical interests of a certain entity are evident in its collaboration in infrastructure development, guided by its newly established strategic frameworks such as the “Connect Central Asia” policy, the International North–South Transport Corridor (INSTC), and the Iranian Chabahar Port (Vyas, 2014).

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The issue of terrorism is a subject of ongoing scholarly discourse. It is often observed that terrorism has arisen as a consequence of inadequate progress in areas such as employment opportunities and infrastructural development. However, concurrently, it is increasingly impeding progress and advancement. Energy security plays a significant role in the plans and strategies for economic development. Terrorism has become a significant issue that poses a threat to the stability and continuity of energy security and supply. The issue has garnered international attention, notably in the aftermath of the 9/11 terrorist attack on the World Trade Centre. The global economic system is currently facing a significant challenge. According to Edward R. Royce (2005), an American analyst and politician, a strategy to undermine the power of a state is to seize its resources. Consequently, he argues that countering terrorism should be integrated into our multifaceted objective of enhancing our country’s energy security. Therefore, the interference of terrorists presents a significant geopolitical risk to the security of energy supply, which offers a considerable challenge to the operation of nearly every nation. This includes disruptions to the transportation of oil and gas through pipelines as well as supplies via maritime routes (Toft et al., 2010, p. 4411). The international diplomacy around this problem has been undermined by the strategic and national interests of major states. These considerations seem to have formed an integral component of contemporary global energy diplomacy. Numerous potential resolutions have been deliberated upon, although the prioritization of national interests tends to supersede broader collective objectives. According to Goldthau (2010), the cost–benefit calculations of energy diplomacy do not adhere to economic logic, but rather prioritize geopolitical manifestations. This approach disrupts the established principles of global capital allocation and consequently reduces transparency in the energy market. Without a doubt, in the current period of a multipolar world driven by competition, global energy diplomacy involves the pursuit of individual interests by the countries involved. This is influenced by a preoccupation with hegemonic ideologies and the desire for economic expansion.

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Rise of Globalization of Energy: Changing Paradigms of Global Energy Governance Contemporary globalization in the energy economic zones encompasses several notable features, such as the implementation of specific global rules, the adoption of novel technology, and the restructuring of global and regional energy governance structures. It is noteworthy to emphasize that the concept of interdependence gained significant attention throughout the 1970s, whereas globalization emerged as a prominent term starting from the 1990s (Viotti & Kauppi, 2010, p. 160). The global structures and processes of energy globalization have significantly impacted the patterns of production and consumption of traditional energy resources worldwide. Table 1.1 illustrates the significant shifts observed in the production and consumption patterns of oil and gas energy resources between the years 1990 and 2021, across both OECD and non-OECD countries. According to Overland (2016, p. 123), the movement of energy resources along land-sea and pipeline routes has fostered significant interconnections across nations. It plays a role in the process of global integration; however, it has not garnered much attention in the scholarly discourse on globalization. The author provides a definition of energy globalization as the increasing interdependence of global energy resources, facilitated by the transportation of larger quantities of energy across international boundaries over longer distances. In support of his conceptualization of energy globalization, the author identifies three subordinate indicators, namely the quantity of energy trade relationships worldwide (pertaining to trade and economics), the geographical distances involved in energy trade relationships (geography), and the level of energy dependency (international relations) (Overland, 2016, pp. 124–125). In addition to this, the rise of developing nations such as Brazil, China, South Africa, and India has played a significant role in the worldwide expansion of energy markets (ExxonMobil, 2016). The significant transformation in global demography and geography has accelerated the rate at which substantial structural changes have occurred in the contemporary energy landscape. Langhorne (2006, p. 7) has also observed the impact of globalization on structural changes.

1990

1995

2000

Sources British Petroleum Statistical Review, 2022

857.5 3120.3 3977.8 2112.6 1925.6 4038.2 1045.9 1866.4 2879.3 1406.0 1458.1 2864.1

2305.3 1606.3 3911.6 983.0 1526.6 2509.6 1296.2 1203.3 2499.5

2010

924.8 3018.3 3943.1

2005

1458.9 1676.3 3135.2

1178.6 2020.9 3199.5

2056.4 2274.9 4130.5

1140.7 3244.2 4364.9

2015

1582.7 1878.3 3461.0

1335.1 2140.2 3475.3

1653.5 2294.4 4047.9

1280.4 2890.6 4170.9

2020

1574.9 2018.3 3633.8

1352.7 2280.4 3633.1

1783.8 2475.7 4259.5

1285.7 2935.67 4221.4

2021

44.5 55.5 100

37.2 62.8 100

41.9 58.1 100

30.5 69.5 100

Share of total (2015) (%)

Productions and consumptions trends of conventional energy resources by countries grouping, 1990–2021

Oil production (Million tonnes) OECD 893.8 975.9 1006.0 Non-OECD 2281.6 2310.1 2613.8 Total world 3175.4 3286.1 3619.8 Oil consumption (Million tonnes) OECD 1941.0 2081.6 2223.6 Non-OECD 1218.2 1205.9 1357.8 Total world 3159.3 3287.6 3581.4 Gas Production (Million tonnes oil equivalent) OECD 774.4 886.0 973.2 Non-OECD 1015.7 1024.5 1203.7 Total world 1790.1 1910.5 2176.9 Gas consumption (Million tonnes oil equivalent) OECD 905.0 1073.5 1225.6 Non-OECD 863.1 852.8 951.8 Total world 1768.2 1926.3 2177.4

Years

Table 1.1

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The best way of thinking about these changes is to imagine the organizational structures of the past, whether commercial and economic or political. They operated up and down and narrowed at the top like a pyramid……... particularly in economic policies and political organization…. generally expected that their relationships would be competitive and adversarial, sinking from time to time into actual conflict.

Therefore, energy has played a significant role in both facilitating globalization and emerging as a global commodity. In the forthcoming decades, the challenges ahead will not primarily manifest as a scarcity of resources, but rather as the need to effectively mobilize available resources.

Major Structural Changes in Global Energy Regime The ability to harness energy resources and advancements in technology for the exploitation of natural resources have emerged as key elements of political power and economic development for contemporary nations. As a result, several countries have begun using energy diplomacy as a significant component of their overall international diplomatic strategies. The capacity of energy resources and their diplomatic effectiveness contribute to both hard and soft power in military and economic contexts, thereby exerting influence over the framework of energy governance. According to Strange (2013, p. 60), the relationship between StateMNCs/NOCs has been altered by structural changes in the international political economy, leading to the emergence of a novel kind of diplomacy in global politics. The emergence of new geopolitical realities has engendered heightened competition among nations, prompting them to open their economies to attract investments from numerous enterprises. Even if they are utilizing their own National Olympic Committees (NOCs) to further their interests in other regions. China serves as a prime exemplification of this phenomenon. The alterations in the international political economy have resulted in a transformation of the diplomatic landscape. Traditionally, diplomacy occurred primarily at the state-to-state level. However, in the current context, diplomacy is increasingly occurring in a different manner, such as between companies and states, and vice versa, while still encompassing state-to-state negotiations (Strange, 2013). The twenty-first century has witnessed the implementation of structural

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modifications in energy governance as a result of evolving diplomatic approaches. Colgan et al. (2012) have provided a critical analysis of these shifts within the framework of “energy regime complexes” and “punctuated equilibrium.” The energy regime complex refers to a network of governmental and non-governmental entities that are responsible for establishing and enforcing regulations and policies related to the trading and transportation of energy resources. The dynamics of interests and power undergo transformations in response to emerging sources of discontent, potentially leading to shifts within regime complexes. The prevailing discontent among the dominant global powers precipitates the emergence of novel institutions through institutional innovation and construction. According to Krasner (1984), when individuals experience moderate or neutral dissatisfaction, they tend to either nest institutions within one another or adjust existing institutions, a phenomenon he referred to as “punctuated equilibrium” or adaptation. The policy-makers’ profound discontent stems from the consequences of the regime complex, which engenders a need for both structural and occasionally policy alterations. An example of a policy shift inside a regime complex is the decision made by OPEC to increase the supply of oil in the worldwide energy market. This move was accompanied by the establishment of the worldwide Energy Forum (IEF) as a new entity, representing an institutional change within the regime complex. Hence, the discontent among prominent stakeholders may be attributed to the inequitable allocation of material advantages derived from the regime complex, alterations in the prevailing state of affairs prompted by market dynamics, and institutional choices or actions undertaken by other nations (Colgan et al., 2012, pp. 119–120). Within the framework of energy geopolitics as a zero-sum game, this paper briefly addresses certain structural changes, acknowledging the limitations of the research. The aforementioned issues are regarded solely as prospective obstacles and prospects inside the current global governing institution. Nevertheless, it warrants a comprehensive investigation through a novel research study. Growing Phenomenal Role of Global Energy Governing Institutions According to Yergin (2006, p. 69), the topic of energy security has gained significant significance following Winston Churchill’s (1911– 1915) pivotal decision prior to World War I to transition the British navy’s

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power source from coal to oil as a means to counterbalance the German navy. The individual had the intention of transitioning the reliance on coal from Wales to a more secure source of oil supply from the Persian region. Since then, it has developed as a matter of national strategy. Furthermore, it continues to be a prominent item on the agenda of state diplomacy, as previously noted. Abdalla (1995) and Vardy (2007) are of the opinion that the international oil market was initially dominated by the “Seven Sisters”1 multinational companies from the mid-1940s to the mid-1970s. These corporations previously held dominion over approximately 85% of global petroleum reserves, but their dominance has since dwindled to encompass only 3–10% of the world’s oil and gas reserves and output. Nevertheless, it was unforeseen that the authority over this domain would transition from multinational corporations to a new set of dominant entities known as the “seven sisters,” comprising state-owned companies such as Saudi Aramco, Russia’s Gazprom, CNPC of China, the National Iranian Oil Company, Venezuela’s PDVSA, Brazil’s Petrobras, and Petronas of Malaysia. These seven sisters currently hold a significant share of global energy production and reserves, amounting to approximately one-third of the world’s total. According to Browne (2013, p. 56), there has been a progressive transfer in the balance of payments (BoP) from oil-consuming nations to oil-producing nations. The policy of equal distribution of oil revenues in Venezuela, known as the “fifty-fifty principle” (1943–1957), served as a model for other oil-producing nations, particularly those in the Middle East. According to Browne (2013, pp. 56–57), the identification of further oil reserves resulted in an excess supply of oil, prompting oil corporations to reduce their prices in the 1960s. Nevertheless, the impact of this phenomenon has also had repercussions for the fiscal income of nations reliant on oil exports. The establishment of the Organization of the Petroleum Exporting Countries (OPEC) in September 1960, which replaced the dominant influence of the “seven sisters” oil companies, can be understood as a strategic response to the shifting geopolitical and economic dynamics that emerged in the wake of widespread decolonization and the ascendance of numerous developing nations. OPEC sought 1 Anglo-Iranian Oil Company (now BP); Gulf Oil (later part of Chevron); Royal Dutch Shell, Standard Oil Company of California (SoCal, now Chevron); Standard Oil Company of New Jersey (Esso, later Exxon); Standard Oil Company of New York (Socony, later Mobil, now part of ExxonMobil); Texaco (later merged into Chevron).

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to assert control over international oil prices during this transitional period. According to Abdalla (1995, p. 872), the implementation of structural changes resulted in numerous non-OPEC exporting countries opting to either nationalize their oil reserves or pursue alternative strategies to exert control over their oil assets. Furthermore, they were able to successfully eliminate the enduring concessions that had been previously granted to the oil firms. Nevertheless, this decision has led to the creation of novel national or state-owned enterprises (NOCs). Additionally, it has resulted in the disintegration of the hierarchical structure within the oil industry (Abdalla, 1995). As a result, the prominent multinational oil corporations transitioned into buyers of oil sourced from the National Oil Companies (NOCs) of oil-producing nations. The ascendancy of the Organization of the Petroleum Exporting Countries (OPEC) exerted a substantial impact on world politics in the 1970s and 1980s through the strategic deployment of oil as a geopolitical tool. Due to its substantial oil reserves and significant production capacity, the entity in question has been able to maintain a dominant position in influencing the global oil price (Kuzemko et al., 2015, p. 66). Consequently, the consuming nations implemented various measures to ensure their energy security, leading to the founding of the International Energy Agency (IEA). As previously stated, the elevated oil prices imposed by the Organization of the Petroleum Exporting Countries (OPEC) have also incentivized non-OPEC nations to exploit costly oil deposits. This phenomenon subsequently gave rise to exploratory activities characterized by exorbitant costs that were economically impractical, ultimately leading to a surplus in supply and a decrease in demand over an extended period of time. According to the perspective of the Organization of the Petroleum Exporting Countries (OPEC), oil prices exhibited less volatility throughout the 1990s in comparison with the preceding decades of the 1970s and 1980s. Nevertheless, the conclusion of the 1990s witnessed a surge in prices due to the occurrence of the Asian financial crisis and a very mild winter in the Northern Hemisphere during 1998–1999. However, the interplay between globalization, liberalization, regionalization, and communication in international politics has led to a close correlation between the interactions of OPEC and non-OPEC countries, as well as the dialogue between producers and consumers (Dadwal, 1999, pp. 154– 155). Over the past two decades, the Organization of the Petroleum

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Exporting Countries (OPEC) has emerged as a notable cartel, driven by its shared objective of enhancing collective profits and safeguarding permanent national control over energy resources. Presently, the membership of the organization has increased to encompass a total of thirteen individuals.2 Currently, the OPEC nations are playing a substantial role in the geopolitical landscape of oil, particularly in relation to worldwide prices, due to their possession of a larger proportion of proved oil reserves. Based on the OPEC Annual Statistical Bulletin (2016), it is evident that OPEC member nations together possess over 80% of the global proved reserves of crude oil. Notably, the Middle East countries hold the overwhelming share, accounting for 65% as of 2016. According to the available data, the estimated total proven oil reserves amount to 1210.19 billion barrels. According to the report, OPEC is responsible for over 50% of the world’s confirmed natural gas reserves. The influence of OPEC on the petroleum policies of its member countries, as well as its impact on energy supply and market prices, has resulted in significant structural transformations within the energy industry and geopolitical landscape (Table 1.2). The IEA was founded (1974) in the wake of oil embargo and price volatility created by the members of the OPEC, during the Arab-Israel War (1973).3 IEA came into being with an intention of ensuring energy security for all its members which includes all 28 energy consumer OECD countries (Florini & Sovacool, 2009, p. 5242). However, in the recent years, the OECD countries have been engaged over the issue of demand, climate change and alternative energy technologies (Hirst, 2012, p. 4). The aforementioned concerns constitute the primary focal points addressed in the World Energy Outlook (IEA, 2016) study. The primary objective of the International Energy Agency (IEA) is to ensure that its members have access to dependable and abundant sources of energy in all 2 OPEC’s current members as of April 2017: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, UAE, Algeria, Nigeria, Ecuador, Angola, Gabon. 3 However, Colgan, Keohane, and Graaf have demonstrated that oil crisis was the result of Yom Kippur War (October 1973) in which the US and Netherlands provoked Organization of Arab Petroleum Exporting Countries (OAPEC)—not OPEC—to impose oil embargo on Canada, Japan, the US, and Netherlands that further extended to Portugal, Rhodesia and South Africa. Indonesia (lapsed the OPEC membership), Iran, Iraq, Venezuela, and other members did not participate in it. It was resulted in oil supplies decline about 9% on a global scale from October to December 1973 (Colgan et al., 2012, p. 125).

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Table 1.2 World proven crude oil reserves (billion barrels) Saudi Arabia Iran Iraq

Iran 16%

Iraq 11%

Kuwait Kuwait 8%

Non-OPEC 303.25 Billion Berrels 19%

Qatar

Saudi Arabia 21% Gabon 0% Angola 0%

OPEC 1241.82 Billon Barrels 81%

Ecuador 1% Nigeria 3%

Libiya UAE Algeria Libiya 4%

Algeria 1%

Venezuela

UAE 9%

Venezuela 24% Qatar 2%

Nigeria Ecuador Angola Gabon

OPEC Countries World Proven Crude Oil Reserves (Billion Barrels) Saudi Arabia*

267.08 (21%)

Libiya

48.36 (4%)

Gabon

2 (0%)

Iran*

208.60 (16%)

UAE*

111.6 (9%)

Total OPEC

1241.82 (81%)

Iraq*

145.02 (11%)

Algeria

12.2 (1%)

non-OPEC

303.25 (19%)

Kuwait*

101.5 (8%)

Nigeria

37.06 (3%)

Total World

1545.07 (100%)

Venezuela

303.47 (24%)

Ecuador

8.27 (1%)

Qatar*

25.24 (2%)

Angola

2.52 (0%)

Source OPEC Annual Statistical Bulletin (2022) a Middle East countries

its various forms. Additionally, the IEA seeks to advocate for sustainable energy policies that foster both economic development and environmental preservation on a worldwide scale. The objective of the organization is to enhance the level of transparency in global energy markets by gathering and analyzing energy-related data, as well as fostering communication with non-member nations and international organizations (IEA, 2016). The International Energy Agency (IEA) has established over 40 international expert networks to facilitate collaboration and knowledge exchange in the field of energy technology. In recent years, non-IEA countries have been granted access to these networks as associate partners, enabling them to share technology and knowledge. The importance of cooperation in energy technology has been highlighted by the organization. However, due to the restricted number of members, efforts have

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been made to establish numerous new collaborative networks instead, with the intention of expanding upon the current networks of the IEA (Hirst, 2012, p. 3). As previously mentioned in the preceding section, the International Energy Agency (IEA) implemented a framework called Coordinated Emergency Response Measures (CERM) in 1995 to effectively address pre- and pro-crisis conditions and effectively manage forthcoming issues. The establishment of Strategic Petroleum Reserves (SPRs) was undertaken in response to the sudden occurrence of an energy crisis. To far, the International Energy Agency (IEA) has only authorized the release of its emergency Strategic Petroleum Reserves (SPRs) on three occasions: during the Iraq’s invasion of Kuwait in 1990, in response to Hurricanes Katrina and Rita in 2005, and during the Libyan Crisis in 2011. These initiatives have also incentivized emerging customers such as China and India to establish Strategic Petroleum Reserves (SPRs) in anticipation of any financial or energy crises. Goldthau et al. (2010, p. 345) contend that within this particular framework, the occurrence of a financial crisis among new consumers can potentially yield two distinct outcomes. One such outcome is the stimulation of new consumer interest in establishing Strategic Petroleum Reserves (SPRs) as a response to the decline in crude oil prices. However, the occurrence of a financial crisis has jeopardized the public treasuries of these nations, thereby compromising their capacity to establish and enhance their Strategic Petroleum Reserves (SPRs). The potential effects can manifest either in the long term or in the near term. In light of the increasing prominence of developing economies and non-OECD nations in the global energy market, the International Energy Agency (IEA) has introduced a “Association” program as stated in its Joint Ministerial Declaration in November 2015. China, Indonesia, and Thailand were the first countries to establish an association with this phenomenon, signifying a significant milestone in its global involvement. In 2016, Singapore and Morocco followed suit. In March 2017, India became an Association country of the International Energy Agency (IEA). According to Kumar (2017), the author posits that India’s affiliation status will facilitate the attainment of energy efficiency and enhance its Strategic Petroleum Reserves (SPRs), which now provide a mere 13 days of coverage for net oil imports as of 2016. Despite the existence of complementarities between OPEC and IEA, it is important to highlight that they maintained divergent positions on numerous matters. Consequently, these institutions have been ineffective

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in addressing the fundamental problems, thereby serving as temporary solutions for conflicting systems (Holmes, 2011). The International Energy Agency’s (IEA) endeavors to enhance its ties with developing nations have proven to be largely ineffective, chiefly attributed to its exclusive membership and tendency to assign the developing world with the primary responsibility for escalated energy use. Consequently, it demonstrates little efficacy in fulfilling a pivotal role in mitigating global energy challenges and has proven to be inadequate in offering significant support for essential energy policy measures, even among G-20 states. Furthermore, the decreasing proportion of its share in global oil commerce and consumption is indicating that the effectiveness of oil security mechanisms is diminishing (Hirst, 2012, pp. 3–4). Therefore, it is imperative for the International Energy Agency (IEA) to expand its membership and engage with the developing world in order to collaboratively and through debate, identify sustainable solutions to the energy dilemma. Furthermore, the Energy Charter Treaty (ECT) is serving a significant role in enhancing global energy governance as an independent international agreement. The legal framework exclusively governs the energy trade. The origins of the Energy Charter Treaty (ECT) may be traced back to the European Energy Charter of 1991, which served as a foundational document for the subsequent signing of the Energy Charter Treaty in December 1994. The legal framework was established in April 1998, encompassing the current fifty-four signatories and contracting parties. The aforementioned citation (Konoplyanik & Walde, 2006, pp. 524– 525) highlights the increasing prominence of the Eurasian model in the realm of energy affairs. This agreement is unique in its nature as it serves as a mediator in facilitating intergovernmental collaboration and implementing a legally binding multilateral instrument aimed at enhancing international energy cooperation. It achieves this by offering improved conditions and mechanisms for resolving disputes in the realm of international energy trade and investment protections (Selivanova, 2010, p. 51). This approach encompasses the entirety of the value chain within the energy sector. The charter primarily emphasizes five key areas of interest within the geopolitical and economic realm of energy, including energy trade, investment, energy transit, energy efficiency, and conflict resolution. Therefore, it is applicable to all stakeholders (producers, consumers, and transit countries) engaged in the energy supply network owing to its significant worldwide impact (Selivanova, 2012, pp. 396–397). The International

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Energy Charter was signed on May 20, 2015, during the Ministerial Conference held in the Netherlands. This event marked a significant milestone as it led to an increase in the number of member countries and observers, which now stands at over 72 countries in addition to the European Union, European Atomic Energy Community (EurAtom), and the Economic Community of West African States (ECOWAS). The International Energy Charter of 2015 was a political declaration with the purpose of outlining the fundamental principles of international energy cooperation. This declaration was prompted by significant transformations in the global energy landscape and aimed to establish a legally binding framework for governing global energy affairs. According to Konoplyanik and Walde (2006, pp. 556–557), the concepts of ECT are intricately connected to the broader framework of the World Trade Organization (WTO). The WTO is progressively working towards the establishment of a global trading system that promotes liberalization across several sectors, including energy products and services. This is evident in its prioritization on the modernization of energy businesses and the promotion of regional and global energy integration within the framework of prevailing economic liberalization, which is currently prevalent in numerous regions worldwide. According to Konoplyanik and Walde (2006, p. 557), the treaty in question has been identified as having a good aspect. It is noteworthy that this particular treaty does not align with a US-supported or influenced framework. Instead, it is grounded in commercial rationale rather than being driven by political sensitivities or imperialistic motives. This phenomenon enhances the significance of its function in energy-related affairs. The ECT’s close association with the WTO is evident through the overlapping membership of its party countries in both organizations. As of 2017, 48 out of 54 ECT members, together with 3 observers, are also members of the WTO. Additionally, of the 38 observer states of the ECT, 31 plus 4 observers are also members of the WTO. In summary, the Energy Charter Treaty (ECT) encompasses a comprehensive framework for resolving multilateral or bilateral disputes among nations, as well as disputes between private investors and the respective countries. Additionally, it serves to mitigate any disruptions in the cross-border delivery of energy. By doing so, it utilizes the established norms and legal framework that are inherent in its sector of energy security. The World Trade Organization (WTO) serves as a paradigm for economic and trade systems that were instituted during a sequence of

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post-war economic restructuring measures. The organization in question was established in the year 1995, and some argue that it can be considered an expanded iteration of the General Agreement on Trade and Tariffs (GATT), with a wider range of duties and obligations. Heywood (2011, p. 471) has endeavored to demonstrate that the evolving imperatives of the global trade system, which are intimately linked to the significant success of neo-liberalism, have generated heightened demand to construct a comprehensive trading mechanism that encompasses a wider range of responsibilities. The establishment of the World Trade Organization (WTO) as an intergovernmental organization represented a significant development aimed at restructuring the General Agreement on Tariffs and Trade (GATT), which primarily focused on regulating the trade of goods. This restructuring sought to expand the scope of GATT to encompass trade in services, as well as address issues related to intellectual property rights through the General Agreement on Trade in Services (GATS) and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. As of February 2017, the organization comprises 164 member states. This pertains to the mitigation of discriminatory practices in international trade through the promotion of unrestricted trade and the reduction of trade obstacles and tariffs. In addition, the World Trade Organization (WTO, 2015, p. 9) plays a crucial role in overseeing and managing trade activities among its member nations. This is achieved through the establishment of a structured mechanism for resolving disputes and engaging in negotiations to establish trade agreements. In contrast to the aforementioned ECT, Leal-Arcas and Abu-Gosh (2014) contend that energy trade occupies a limited position within the framework of the World Trade Organization (WTO), without comprehensive regulations specifically addressing energy trade. Without a fact, the organization in question is not primarily focused on energy matters. However, numerous countries that are significant energy producers have chosen to join this organization, so attracting its attention towards energy-related concerns. To a certain extent, several regulations established by the World Trade Organization (WTO) have a discernible impact on the energy trade, either through direct or indirect means. Energy security and the challenges posed by energy crises are also topics of discussion in several international forums, such as the International Energy Forum (IEF), the G-20, and the Gas Exporting Countries Forum (GECF), among others. The International Energy Forum (IEF) serves as the largest global platform for energy ministers to engage in

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informal and open discussions, aimed at promoting ongoing debate on global energy matters. Through frequent meetings, the IEF facilitates the exchange of ideas and knowledge among member countries, fostering greater awareness and better understanding of shared energy concerns. Newell et al. (2016) conducted a study which revealed that there are 76 member nations. It encompasses approximately 90% of the worldwide demand and supply across all six continents, encompassing not only countries affiliated with the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), but also involving major global economies like China, India, Russia, Brazil, Mexico, and South Africa, as well as transit states beyond their membership. The promotion of diplomatic operations is carried out by the permanent secretariat located at the Diplomatic Quarter in Riyadh, Saudi Arabia. According to Zhiznin (2010, p. 8), the primary emphasis of the International Energy Forum (IEF) during its biennial ministerial sessions has been on the relationships between nations involved in energy exportation and importation. Russia’s proactive involvement in energy-related activities has the potential to serve as a connecting link for negotiations between oil-consuming and oil-producing nations. The G-20 summit in 2009 placed significant emphasis on energy governance, as seen by the diverse range of summit themes that were chosen each year. During the Summit held in 2006, the G-20 Ministerial Meeting centered around the theme of “Building and Sustaining Prosperity.” The primary emphasis of the ministerial meeting revolved around the examination of the “Global Energy and Resource Commodity Markets,” in addition to several other matters. Indeed, its inception may be attributed to the aftermath of the 2008 global recession, which was prompted by emerging global economic conditions and the diminishing efficacy of the G8+5. Despite ongoing meetings of the G8+5 members, its dissolution has created a void in global energy governance that the G20 countries are attempting to address (Hirst, 2012, p. 7). Furthermore, during the Seoul summit in 2010, the leaders reached a consensus to implement specific measures aimed at enhancing transparency in the physical oil markets and strengthening regulations pertaining to financial oil derivative markets. The objective behind these actions was to mitigate the volatility of oil prices, thereby enabling both consumers and producers to reap advantageous outcomes. In addition, it was mutually agreed upon by relevant stakeholders, including the International Energy Agency (IEA),

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Organization of the Petroleum Exporting Countries (OPEC), Organisation for Economic Co-operation and Development (OECD), and the World Bank, to undertake a process of rationalization and gradual elimination of ineffective subsidies for fossil fuels. This measure aims to discourage the unnecessary and excessive usage of such fuels, as stated in The White House report of 2010. Hirst (2012, p. 11) has conducted a critical analysis, highlighting that while there is potential for leadership, the absence of a secretariat and institutional framework hinders the ability to effectively implement lasting programs of collaboration. This is due to the fact that an institution can only facilitate day-to-day cooperation. One other aspect pertains to the incorporation of Saudi Arabia, which effectively disqualifies the group as a platform for exclusively pursuing consumer-oriented endeavors. Nevertheless, until governmental entities bridge the gap between consumers and producers, the influence of the group would be somewhat constrained. Regional Energy Governance Regional institutions and organizations have been actively advocating for and facilitating bilateral and international collaboration within the energy industry. Furthermore, these factors play a crucial role in promoting regional energy security in alignment with the global energy framework. In the context of contemporary globalization, numerous regional organizations, including the Asian Development Bank (ADB), the European Union (EU), the Asia–Pacific Economic Cooperation (APEC), the Commonwealth of Independent States (CIS), the Organization for Security and Co-operation in Europe (OSCE), and the North American Free Trade Agreement (NAFTA), have been actively involved in trade endeavors that pertain, either partially or entirely, to the energy sector. In the given setting, the European Union (EU) serves as an exemplary model for regional cooperation. The escalating costs of energy and the extensive discourse surrounding the oil and gas pipeline infrastructure, particularly in light of the Russia-Ukraine crisis, have elevated the significance of energy security policy for all European Union member states. The European Commission has taken on the responsibility of guiding the energy policy of the region in order to facilitate its development (Belkin, 2008).

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The Asia–Pacific Economic Cooperation (APEC), established in November 1989 in Canberra, is a regional economic governance organization that aims to tackle issues related to energy security in the Asia–Pacific region (Wu et al., 2011). The majority of states, as well as established or growing regional organizations and energy clubs such as NAFTA, CIS, SCO, BRICS, and SAARC, have placed significant emphasis on energy demand and supply as a key policy objective within the geopolitical and economic realms. Furthermore, a variety of Multilateral Development Banks (MDBs) operate at the regional level, on par with the World Bank. These factors are significantly impacting energy-related policies. The Asian Development Bank (ADB), established in 1966 and based in Manila, has a membership of 67 countries (Florini & Sovacool, 2009, pp. 5244–5245). The phenomenon has exerted significant influence in the development of energy infrastructures, particularly in the establishment of gas pipelines and connectivity corridors. The yearly reports from 2014 through 2017 have mostly emphasized energy policy, commerce, infrastructure development, and equitable energy access. Efforts are being made to enhance cross-border interconnection of energy in response to the energy demands that cannot be met by Asian countries. Structural Changes in the Emerging Economies in the Asian Super-Complex The current century is often regarded as an era in which Asia plays a prominent role in the field of energy, mostly due to the substantial growth in energy consumption resulting from significant structural transformations in Asian economies. The examination of structural changes within an economy can be conducted by analyzing several indicators such as production growth, investment patterns, openness to international trade, industrial development, demographic factors, and consumption patterns (Papola, 2006, pp. 6–7). In light of these changes, it is anticipated that Asia would assume a prominent role in the global energy industry. The environmental and infrastructural aspects of the energy sector exhibit notable disparities when compared to other regions globally. According to the National Geographic (2017), Asia is considered the largest continent globally, encompassing around 30% of the total land area on Earth. Additionally, it should be noted that Asia holds the distinction of being the most densely populated continent globally, accounting for around

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60% of the overall global population. This particular continent encompasses nations that fulfill both producer and consumer roles. According to the BP Statistical Report (2016), it can be observed that Asian countries have made a significant contribution to global oil production, accounting for around 56%. Additionally, these countries have also played a substantial role in global oil consumption, representing approximately 49% as of 2015. In relation to the global production and consumption of natural gas, it has made a significant contribution of 52% and 49% correspondingly. China, Japan, and India are widely recognized as the foremost economic powerhouses and primary energy consumers within the Asian region. As of 2015, the aforementioned countries collectively represent 45% of the overall oil consumption in Asia and 21% of the entire natural gas consumption in the region. According to the ExxonMobil Outlook for Energy (2017), it has been asserted that the phenomenon of urbanization has been on the rise due to high levels of economic growth, thereby leading to an improvement in living conditions. The global middle class has experienced significant growth, more than doubling in size over the past fifteen years. This expansion has led to increased consumption of resources. The increasing demand for four-wheelers, air-conditioning units, and other technological gadgets has placed significant strain on energy resources. It is anticipated that these trends will see upward trajectories in non-OECD nations such as China and India. Based on the aforementioned data, it can be inferred that the global energy consumption is projected to experience a growth of approximately 25% by the year 2040. China is projected to provide over 20% of the global economic growth, mostly driven by the expansion of its new middle classes and consistent economic output, which is expected to exceed an average growth rate of 5% until the year 2040. In the context of India, a country with an economy around one-third the size of China’s, it is expected that India will have a comparable rate of economic growth. In terms of the working population, India and Africa are projected to exhibit substantial GDP growth in the next three decades, primarily attributable to their sizable young labor force. According to ExxonMobil (2017), the United States is projected to lead economic growth in OECD countries, contributing 20% to the global economy. This growth is attributed to the country’s expanding working population. However, the majority of these countries experiencing unconnected development and initiating economic growth are primarily located in the developing world. This growth may be

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attributed to significant transformations in their political, socio-economic, and policy frameworks. Growing Role of National Oil Companies (NOCs) The evolving and prominent role of National Oil Companies (NOCs) has also resulted in significant reorganizations within the global energy industry. According to Jaffe and Soligo (2010, p. 107), the international energy business has undergone significant structural changes since the post-war era. As previously stated, there has been a transfer of control over oil resources from multinational corporations (MNCs) to national oil companies (NOCs) by governments, with a specific focus on ownership, distribution, and regulation of energy pricing (Vardy, 2007). Additionally, this phenomenon has resulted in the emergence of resource nationalism and elevated oil prices, consequently yielding substantial money that surpasses initial projections. Currently, National Oil Companies (NOCs) exert significant control over more than 80% of the world’s oil reserves. Only Baker Institute4 (2007) has conducted only one study over the above-mentioned issue. The study has provided evidence to support the notion that the increasing significance and evolving responsibilities of National Oil Companies (NOCs), each with their own distinct policy objectives, have contributed to a heightened level of complexity in the global supply–demand equilibrium. The forthcoming decades are expected to witness significant implications for the advancement of global energy markets. It is seen that out of top 20 international stakeholders of oil and gas reserves, the first 13 are either traditional NOCs or newly privatized NOCs (James A. Baker III Institute, 2007). According to Jaffe and Soligo (2010, p. 109), a significant number of Asian and Russian oil corporations have engaged in competition for energy resources across Africa, the Middle East, and Eurasia. Certain entities are capitalizing on advantageous financial arrangements with governments in the global energy industry, thereby gaining a competitive edge and surpassing other national oil companies (NOCs) in bidding processes. Chinese National Olympic Committees (NOCs) provide noteworthy instances in relation to this matter. In the latter part of 2005, the China National Petroleum 4 The James A. Baker III Institute is the US-based think tank, was established in 1993 by Rice University, Texas, to provide insights into American Public Policy. It is also called a Baker Institute.

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Corporation (CNPC) successfully outperformed India in the acquisition of Petro-Kazakhstan by increasing its bid to a total of US$4.18 billion (Gulshan, 2011, p. 116). More recently, India faced defeat in its attempt to purchase an 8.4% stake in a Kazakhstan oil field, as the Chinese oil company CNPC emerged as the victor (Modi, 2013). According to Kolb (2011, p. 169), the increasing prominence of Russian and Chinese National Oil Companies (NOCs) in the global energy market possesses geopolitical implications, since these entities may employ them as tools to advance their geostrategic foreign policy objectives. Therefore, the National Oil Companies (NOCs) function as tools of state diplomacy, working to advance the national interests of their respective countries. As a result, this adds a layer of complexity to global energy dynamics. Expanding Network of Pipelines and the Changing Face of Transit Countries The global oil and gas pipeline infrastructure has experienced significant expansion in recent years. Following the dissolution of the Soviet Union, there has been a notable shift in the geopolitical landscape as the rise of post-Soviet countries has posed a challenge to Russian hegemony over pipeline networks (Kolb, 2011, p. 175). However, it is noteworthy that Russia presently possesses the most extensive pipeline network globally, which is mostly managed by its national oil companies (NOCs), notably Gazprom. The establishment and operation of gas and oil pipelines have introduced additional complexities to the geopolitics of energy due to the strategic positioning of transit countries. The utilization of pipeline diplomacy has become a significant factor in this geopolitical scenario. The landlocked topography of Central Asia necessitates that energyproducing nations must traverse at least one transit country in order to distribute their energy resources. Since the dissolution of the Soviet Union, multiple pipeline routes have been successfully negotiated and implemented. According to the BP Statistical Report (2016), the Middle East emerged as the most significant exporting area in 2015, with oil exports reaching 880 million metric tons and liquefied natural gas (LNG) exports amounting to 113 million metric tons of oil equivalent (Mtoe). However, the transportation of energy commodities is facilitated through the use of tankers that traverse sea-land routes. Nevertheless, the transportation of said supplies does not encompass transit through any areas

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other than certain territorial waters and strategic chokepoints such as the Strait of Hormuz and the Malacca Straits. Conversely, the energy transmission within the Commonwealth of Independent States (CIS) and its transportation to Europe exemplify the extensive network of pipelines. In 2015, the region exported around 336 million tonnes of oil and 245 million tonnes of natural gas through pipeline networks. The transportation of the same commodity requires intermediary nations, namely Turkey, Belarus, Moldova, and Ukraine. According to the Energy Charter Secretariat (2015), these countries have continued to serve as the focal point of geopolitical crises. In the wake of the Russian-Ukraine crisis, Gazprom, the Russian national oil company, has put out a proposal for the construction of a gas pipeline called TurkStream. This pipeline would span through Turkey, passing under the Black Sea via a proposed connection between Anapa in southern Russia and northwestern Turkey. The intended purpose of this pipeline is to facilitate the transportation of natural gas to Europe, with an anticipated annual capacity of 63 billion cubic meters. Consequently, the gas supply through Ukraine witnessed a significant decline, with the volume decreasing from 137 billion cubic meters in 2014 to around 62 billion cubic meters in the previous year (Mazneva, 2015). Numerous transit-consumer nations have expressed concerns regarding the potential dominance of Russia in energy outlets. As a result, these countries have been advocating for originating countries to engage in discussions aimed at the collaborative development of additional pipelines (Kolb, 2011, pp. 176–177). Therefore, it would have a significant impact on the diplomatic efforts around pipeline development in the expanding energy landscape. Pakistan serves as a crucial transit country for several energy projects, such as the India-Pakistan-Iran gas pipeline (IPI) and the TurkmenistanAfghanistan-Pakistan-India (TAPI) pipeline. The realization of these two projects was hindered by the strained relations between India and Pakistan (Kolb, 2011, p. 177). According to Shambaugh and Zlotnick (2014), the occurrence of energy-related conflicts in the current century is more probable in transit countries that are in the process of developing their transit infrastructural capacities. These countries include Ukraine, Belarus, Algeria, Bulgaria, Nigeria, Pakistan, and Turkey. The authors argue that these developments suggest that transit countries will play an increasingly crucial role in future energy security and pipeline diplomacy.

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Rising Climate Change Concerns The evolving evaluation of the relationship between climate change and the growing demand and supply of energy has presented novel issues within the global energy landscape. The escalating need for energy has led to a concerning rise in the combustion of fossil fuels, which in turn has significant implications for climate change and the production of Greenhouse Gases (GHGs). According to Symons (2012, p. 1), the rise in energy demand and greenhouse gas emissions in numerous emerging nations can be attributed to the expanding availability of modern energy sources and the subsequent increase in economic opportunities. The global energy sectors are accountable for around 57% of greenhouse gas (GHG) emissions, necessitating a reduction of 60–80% by the year 2050. Table 1.3 illustrates that in the foreseeable future, growing economies are projected to exert upward pressure on primary energy consumption. However, it is worth noting that the pace of this increase will be significantly influenced by government actions. In 2011, fossil fuels constituted 82% of the overall primary energy consumption. However, it is anticipated that their proportion will decrease in the future under different scenarios. Specifically, the New Policies Scenario predicts a fall to 76%, followed by the Current Policies Scenario at 80%, and the 450 Scenario at 64% by the year 2035. According to the International Energy Agency (IEA, 2013), it has been asserted that the process of transitioning away from fossil fuels is expected to need a significant amount of time, even under the assumption of a 2 °C climate scenario. Symons (2012, p. 1) has posed a significant inquiry about the current circumstances: How can the escalating energy demand and security concerns be effectively addressed for the global population of 7 billion individuals, especially in light of the accelerated progression of climate change? In light of the recognition of the consequences of global warming, several diplomatic discussions have taken place over the past three and a half decades, influencing the energy policies of both consumer and producer nations. The primary components of these agreements consist of the United Nations Framework Convention on Climate Change (UNFCCC) established in 1992, which subsequently led to the Kyoto Protocol Treaty on climate change in 1997. This treaty was ratified during the Earth Summit held in Rio de Janeiro and officially came into effect on February 16, 2005. Since that time, the objective has been to engage

2357 3664 2073 676 225 1016 60 10,071 80 45 23.7

Coal Oil Gas Nuclear Hydro Bioenergya Other Renewables Total (Mtoe) Fossil Fuel Share (%) Non-OECD share (%) CO2 emissions (Gt)

3773 4108 2787 674 300 1300 127 13,070 82 57 31.2

2011 4202 4470 3273 886 392 1493 309 15,025 80 61 34.6

2020 4428 4661 4119 1119 501 1847 711 17,387 76 66 37.2

2035 4483 4546 3335 866 379 1472 278 15,359 80 61 36.1

2020 5435 5094 4369 1020 471 1729 528 18,646 80 66 43.1

2035

Current policiesc

3715 4264 3148 924 401 1522 342 14,316 78 60 31.7

2020

450 scenariod

2533 3577 3357 1521 550 2205 1164 14,908 64 64 21.6

2035

Source International Energy Agency-World Energy Outlook, 2022 Note Mtoe ˛Million tonnes of oil equivalent; Gt ˛Gigatonnes a Includes traditional and modern biomass uses b The New Policies Scenario—the central scenario—takes account of existing policies and the anticipated impact of the cautious implementation of declared policy intentions c The Current Policies Scenario takes account only of policies already enacted as of mid-2013, providing a baseline of how energy markets would evolve if established trends continue unabated d The 450 Scenario illustrates an energy pathway compatible with a 50% chance of limiting the long-term increase in average global temperature to 2 degrees Celsius (2 °C)

2000

New policiesb

IEA outlook for global primary energy demand and energy-related CO2 emissions by scenario

Energy resources

Table 1.3

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in ongoing negotiations in order to attain even more ambitious outcomes by the year 2030. Symons (2012, p. 2) has conducted a critical analysis that highlights the limited impact of global energy governance organizations in resolving environmental issues, primarily attributed to a lack of cooperation. According to Camilleri (2012, p. 268), the interconnection between climate change and global energy governance is a fundamental aspect in both theoretical frameworks and practical applications. The energy policies of some developing countries, including India, China, and Brazil, have been influenced to some degree by the global climate change debates. Therefore, the aforementioned structural modifications have significant implications for the interactions between producers and consumers.

Global Energy Governance: An Unlikely Concept The notion of global governance has gained significance in light of the shift towards globalization. According to Biersteker (2009), James Rosenau’s seminal work in 1992 identified a fundamental challenge in global governance: the absence of a centralized authority with the capacity to enforce decisions on a global level. This lack of a clear hierarchy makes it exceedingly difficult to determine who is responsible for creating rules, who these rules apply to, and how they are implemented (p. 2). According to Viotti and Kauppi (2010, p. 149), the neoliberal institutionalists have posited that the escalating intricacy of global concerns has prompted contemplation on global governance. This entails the examination and management of various procedures, encompassing both established and unofficial organizations, which oversee and direct the collaborative endeavors of collectives. According to Keohane (2002), the concept being referred to can be characterized as dense networks of interdependence and increased institutionalization, where the significance of boundaries and states remains substantial. In contemporary society, the global arena has transformed into a domain where politics plays a pivotal role, particularly in relation to commerce, security, environmental matters, and various other areas of concern. According to Keohane (2002, pp. 208–245), the speaker expressed the view that global governance lacks significance for nations, as they operate on varying perspectives regarding energy matters. Instead, global governance is perceived as a framework aimed at integrating networks among actors and establishing

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widely accepted norms and standards of conduct, ultimately seeking to improve the welfare of humanity. Goldthau et al. (2010, p. 345) have undertaken an analysis to elucidate the many mechanisms employed by institutions engaged in the governance of global energy, with a specific focus on the matter of energy security. In doing so, they specifically examine the significance of energy diplomacy in shaping global energy dynamics. The individual in question has categorized global energy governance into three distinct classifications. The first group include many entities that aim to address market failures, including the Institute of Economic Affairs (IEA), the European Union (EU), and the Group of Eight (G-8). Market failure can arise due to several factors such as barriers to investment, protectionist policies, significant declines in energy prices, and the influence of statesponsored diplomacy. The International Energy Agency (IEA) focuses on addressing market failures that arise from deliberate or unintentional issues on the supply side of the global market. These issues can be caused by various factors such as natural disasters, terrorism, and domestic unrest in producing countries. Additionally, the IEA also considers the collective actions taken by producer countries, particularly those in the Organization of the Petroleum Exporting Countries (OPEC), who aim to maintain their dominance in the energy market (Colgan, 2009, p. 6). In order to enhance the flexibility of its functions, the International Energy Agency (IEA) has also implemented a framework known as the Comprehensive Energy Response framework (CERM) to address forthcoming difficulties. Additionally, there exist several global institutions that are dedicated to reducing transaction costs. The transaction costs might be attributed to the limited availability of production and consumption data, which has been intentionally withheld by certain countries, notably China and Gulf countries, since the 1970s. The International Energy Forum (IEF) serves as an exemplary model for effectively addressing such concerns. The platform facilitates the convening of energy ministers from different nations and contributes to enhancing transparency in the energy market by facilitating the exchange and dissemination of information and data. The necessity of producer–consumer cooperation has been identified as a more dependable approach to addressing the impact of financial crises (Goldthau, Hoxtell, & Witte, 2010, pp. 346–347). Thirdly, in contrast to the aforementioned, there are regulatory authorities and institutions responsible for establishing rules and standards that ensure fair competition within the energy market. The energy market is influenced by several

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organizations, such as the World Trade Organization (WTO) and the Energy Charter Treaty (ECT). Nevertheless, it should be noted that these regulations lack enforceability and fail to provide a comprehensive and consistent system for managing compliance. This is primarily due to the significant differences in interests among member states on a range of matters (ibid., pp. 348–349). However, it may be observed that these institutions tend to exhibit a higher degree of conflict compared to organizations that are specifically created to minimize transaction costs and prioritize the collective benefits of all participants. Therefore, the global energy governance agenda continues to battle with numerous problems and issues that pose challenges to its effectiveness. Persistent Problems 1. Fragmented, Anarchic, and Lack of Central Authority The issue of fragmentation, which is consistently observed in global energy governance, continues to be a significant problem within the field of international relations. According to Young (2002, pp. 11–12), the selection of arenas for regime formation is not inherently obvious or predetermined, despite its significance in promoting progressive growth. The author emphasizes that these decisions should be comprehended as outcomes resulting from organizational imperatives and the computation of actor interests. The global energy market dynamics are influenced by a wide array of global organizations, institutions, treaties/charters, and other regulating authorities. The presence of diverse and conflicting interests at the national, regional, and global levels in relation to energy security and the economy highlights the fragmented and disjointed nature of global energy governance (Leal-Arcas & Filis, 2013, p. 5). Consequently, this has resulted in the fragmentation of the global energy system, leading to a lack of coordination and a centralized authority to effectively enforce decisions on a worldwide scale. This situation is not conducive to achieving global energy security. There is a widely held belief that policies are formulated with great certainty and efficacy, yet the subsequent execution of these policies at the grassroots level lacks comprehensive monitoring and fails to adequately address individual accountability.

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2. Superseding Regional Dimensions of Energy Governance The absence of regional-level analyses within the scope of globallevel energy regulation is also evident. The present studies lack an examination of the significant role that regions, acting as actors, can play in energy governance. In the present day, regional interconnectedness encompasses a range of critical junctures within energy supply chains, including pipeline geopolitics and diplomacy, as well as the issue of high seas piracy in the Straits of Malacca and Hormuz. The aforementioned factors exert significant influence on the supply chains spanning throughout Europe, the Middle East, and Southeast Asia. A regional-level examination of energy governance is required (Shaw, 2012, p. 275). The current global energy framework exclusively addresses institutions that operate on a global scale. Nevertheless, scholars such as Goldthau and Witte (2010), Blyth (2010), and Shaw (2012) have endeavored to acknowledge the significance of regional cooperation and regional institutions in the examination of energy governance. It was emphasized that the utilization of a bottom-up method is crucial and politically viable in order to commence progress with national and regional frameworks. Hence, it is imperative to establish a synchronized approach on a worldwide scale to facilitate the harmonious development of standards, in conjunction with regional and national initiatives, in order to enhance energy governance. 3. Energy Diplomacy leading to Opaqueness in Energy Statistics Undoubtedly, energy has consistently been a topic that has warranted substantial state action. According to Goldthau (2010, p. 26), the significance of energy diplomacy should not be overlooked as it serves as an effective strategy for attaining targeted objectives. Nevertheless, the influence of its effects is significantly mitigated by the underlying principles governing market frameworks. The author additionally argues that the practice of energy diplomacy disrupts the efficient distribution of financial resources and natural assets, resulting in a reduction of transparency in the energy market as it diverts attention away from economic principles. Several nations either fail to give precise energy data or choose not to provide such information to other countries as a component of their diplomatic strategies. The existing institutions have hurdles in their pursuit of effectively addressing the complexities associated with global energy governance.

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4. Geopolitical Risks Geopolitical researchers have extensively documented the profound influence of geopolitics and the zero-sum game on the transformation of global energy regimes. Energy mercantilism would have a significant impact on energy policy-making. According to Mang (2014), the global energy landscape is often viewed as a conflict over energy resources, driven by consumers’ concerns about energy supply security and producers’ interests in energy security demand. Given the inherent ambiguity surrounding the comparative and asymmetric capacities of nations, it is evident that they are reluctant to jeopardize their sovereign interests by aligning themselves with global energy organizations. According to Ladislaw (2015, p. 86), energy is utilized as a means to advance the geopolitical and strategic objectives of major powers in regions of conflict. This can be observed in recent incidents involving pipeline disputes, oil field export terminals, and refineries in Libya, Iraq, and Nigeria. Furthermore, he suggested that energy may serve as a strategic asset, functioning as both a diplomatic instrument and a bargaining tool, similar to the manipulation of supply and the implementation of economic sanctions. According to Mang (2014), the advent of the twenty-first century has witnessed a shift towards a multipolar system as a result of the diminishing hegemony of the United States. The expanding presence of China and India, both net oil importers, in the African and Eurasian regions, along with the increasing power of National Oil Companies (NOCs), might be interpreted as a contemporary manifestation of colonialism. The intensification of rivalry and conflicts can be attributed to several factors, including the increasing importance of non-state players, the expansion of nuclearization across different regions, and the intersecting strategies of OPEC and IEA (Waltz, 2000, p. 6). The significant revelation of energy resources has had a profound influence on global, regional, and domestic perspectives towards emerging geopolitical realignments. The advent of novel methods for extracting shale oil and gas is expected to have a significant influence on commodities prices and other matters (DiChristopher, 2017). As a result of shifting power dynamics, numerous nations underwent modifications to their conventional approaches to foreign policy. As an example, the United States has reversed its stance on climate policy by declaring its intention to withdraw from the Paris Treaty on Climate Change, citing its prioritization of the “America First Policy” (Easley, 2017).

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Therefore, the prioritization of national interests above international cooperation renders geopolitical dangers an ongoing challenge for global energy policy, with no clear resolutions in sight.

Reconnoitering India’s Position on Global Energy Issues: An Overview of Its Governing Capacity The substantiation of India’s involvement in global energy governance can be attributed to its foreign policy imperatives, which prioritize the guarantee of access to energy resources. India’s stance on global energy matters has consistently been ensnared in a complex and competitive setting, characterized by vulnerabilities in energy demand and supply, pricing determinations, institutional divisions, and climate change concerns, among other factors. Global and regional governance entities have played a significant role in addressing these concerns. Therefore, the stakeholders consistently expressed their desire to be involved with these institutions at multiple levels. India plays a significant role as a key player in energy matters, owing to its substantial economic and demographic proportions. Therefore, it is imperative to have an understanding of the specific manner and geographical context in which India is situated within global energy governance organizations. India has just joined the World Energy Council (WEC), an international organization that facilitates discussions on significant energy-related matters. India has been a member of the council known as WEC India since its formation in 1923. WEC India operates under the auspices of the Indian Ministry of Power (MoP) in collaboration with various energy ministries and affiliated organizations. In the present era, it continues to fulfill a crucial function in facilitating discussions on energy matters with many stakeholders, offering viable resolutions to advance the prospects of the energy sector. Nevertheless, India’s strained diplomatic relations with neighboring nations and its ineffective administrative practices in leveraging its geographical position have consistently posed significant challenges to its energy diplomacy. The significant disparity between the demand for energy and its supply has compelled India to actively participate in the global energy governance. The country has undertaken initiatives to align its domestic energy policies with international energy and trade policies through its membership in various international institutions, including but not limited to the International Energy Agency

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(IEA), World Trade Organization (WTO), Group of Twenty (G-20), and International Energy Forum (IEF). India, as a member of the World Trade Organization (WTO), has expressed its concerns on the investment and competitive policies implemented by certain countries, with a special focus on those countries involved in energy supply. Nevertheless, the World Trade Organization (WTO) has not exerted significant influence on entrenched export cartels such as the Organization of the Petroleum Exporting Countries (OPEC). The Organization of the Petroleum Exporting Countries (OPEC) has gained notoriety for its involvement in the manipulation of energy pricing and the establishment of output ceilings. India has been articulating its apprehensions on this matter (Rezzouk, 2004). India ratified the Trade Facilitation Agreement (TFA) on April 22, 2016, so joining the ranks of the 76 World Trade Organization (WTO) member countries that have done the same. India has consistently demonstrated its commitment to safeguarding the interests of developing nations, recognizing their limited resources in comparison with industrialized nations (World Trade Organization, 2016; for further elaboration, see to Narlikar, 2017). Regarding GATS-Mode 3, which pertains to the establishment of commercial presence for service delivery, Indian corporations have engaged in international business activities to obtain foreign energy assets and establish enterprises in several sectors like IT, pharmaceuticals, and non-conventional energy, among others. The project has been supported by India’s increasing outward Foreign Direct Investment, as discussed in the subsequent chapter (Insights, 2016). The reliance on maritime channels for trade in India exceeds 95%. Nevertheless, the energy trade has consistently faced threats associated with maritime piracy and terrorism, as well as concerns regarding the safety of sea lanes of communications (SLOCs) and vulnerabilities at choke points (Ghosh, 2015). India, as a developing participant in the G-20, has been actively advocating for the inclusion of energy trade and investment as a significant topic of deliberation and examination within the forum (Nataraj, 2016). These problems have been brought up in the context of the World Trade Organization (WTO) and the G20 Ministerial Conferences, both at the individual, regional, and global levels. India has acknowledged the increasing significance of the International Energy Agency (IEA) in addressing global energy matters. According to Macalister (2011), the International Energy Agency (IEA) called

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upon Russia and the Organization of the Petroleum Exporting Countries (OPEC) in 2011 to facilitate a diplomatic resolution between energy users and producers in response to the escalating costs of energy. In 2017, the International Energy Agency (IEA) made a plea to both OPEC and non-OPEC countries, including the United States, Canada, and Brazil, to decrease their oil output. This request was made in an effort to address the ongoing oil price issue and facilitate the process of rebalancing the energy market (Zhdannikov, 2017). In March 2017, India acquired a “Association Status” with the International Energy Agency (IEA) with the intention of establishing a close collaboration on matters pertaining to energy security policies (Kumar, 2017). The anticipated rise in influence of India, alongside China, as significant users, is predicted to facilitate the International Energy Agency (IEA) in expanding its capabilities to enhance openness within the global energy market through the improvement of energy data and statistics. Hence, within a broader framework, it is probable that India will assume a more prominent position in these institutions responsible for overseeing the operation of the global energy sector. The issue of political instability and terrorism disruptions in nations or areas that are stakeholders in the energy sector has been a significant concern for both energy producers and users. Consequently, the United Nations has implemented numerous peacekeeping missions in various locations. India has been actively involved in peace-making efforts led by the United Nations. In recent decades, India’s involvement in the regions of Africa and Eurasia has witnessed a notable growth, following its prior engagement in the Middle East (Mohan, 2009, p. 130). India’s involvement in UN Peacekeeping missions is often interpreted by commentators as a reflection of its humanitarian concerns, a demonstration of solidarity with developing nations (Parakatil, 1975), and a manifestation of its pursuit of Gandhian ideals for peace. According to Krishnasamy and Weigold (2003), the primary motivation behind this action is to safeguard its international reputation as a major global power and secure a permanent seat in the United Nations Security Council, among other factors. According to Bullion (1997, p. 106), it has been argued that India’s involvement in the United Nations-led operation is driven by its geostrategic objectives, aiming at promoting regional stability in energyrich areas such as the Middle East, while also seeking to reorient the global order.

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The Middle East has garnered significant interest mostly because of its facilitation of unrestricted energy supply and the unimpeded movement of goods and services through international waterways, including the Suez Canal and the Persian Gulf. India’s involvement in numerous peacekeeping operations within the countries of Iran, Iraq, Egypt, Kuwait, Lebanon, Sudan/South Sudan, and Yemen is clearly apparent. India is well recognized as a significant and continuous contributor to United Nations peacekeeping deployments. According to Banerjee (2013), a total of 163,000 personnel have been deployed throughout 43 United Nations operations. India’s foreign policy is often analyzed by scholars through the lens of the fundamental principles of sovereignty and non-intervention. In his recent address at the Persons of Indian Origin (PIO) Parliamentarians Conference in New Delhi on January 9, 2018, Prime Minister Modi emphasized that India’s international relations should not be viewed merely as transactional in nature. Instead, he advocated for the recognition of India’s historical contributions in the areas of peacekeeping, capacity building, and resources development, highlighting the country’s commitment to avoiding the exploitation of any nation’s territory for its own individual gains (The Tribune, 2018). As a result of evolving geopolitical dynamics in the global order, the United Nations (UN) has experienced a transformation in its role. In light of this, India has taken steps to enhance its global standing and security perceptions, extending its influence beyond the scope of the United Nations. As an example, the Indian Navy provided assistance to United States military boats throughout the Indian Ocean during Operation Enduring Freedom in Afghanistan in 2002 (Mohan, 2013). After careful deliberation over the potential deployment of military forces in Iraq in 2003, under the influence of US pressure, a realistic approach was decided by refraining from doing so based on the nation’s petroleum interests in the Gulf region. In due course, it had embraced a moderate stance during the conflict between the Bush administration and Saddam Hussein, wherein it expressed disapproval towards the latter and advocated for the welfare of the Iraqi populace, aligning with its strategic objectives in the area (Mohan, 2003). India’s recent strategic investments in the Chabahar Port of Iran, which is considered a rival to Saudi Arabia and a source of concern for Western countries, can also be interpreted from the perspective of energy security and supply in the area (Banerjee, 2013). India played a constructive role in the Bonn Conference in 2017, organized by the United

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Nations, with the aim of establishing a stable and enduring government in Afghanistan. India’s active involvement in Afghanistan following the fall of the Taliban administration encompasses various dimensions, including Eurasia connectivity, energy security, trade, and strategic objectives. This support from India has been extensively documented and analyzed by Kaur (2017). Nevertheless, Mohan (2013) has attempted to provide evidence for this perspective by examining India’s British Raj legacy, which aimed to establish political order and stability in the region, while simultaneously asserting dominance in the subcontinent and deterring other nations from intruding on its territory. The influence of energy security and climate change on India’s energy policy in the past decade has sparked a growing debate. According to Dubash (2011, p. 73), India’s energy trade history has been shaped by its expanding market demands, which have been influenced by global norms and rules, as well as domestic politics and institutions. India’s climate policy regarding energy has undergone a steady transition from defensive and equitable distribution tactics to a combination of measures, leading to active engagement in global environmental forums, especially in the past decade (Michaelowa & Michaelowa, 2012). During her notable address at the 1972 United Nations Conference on Human Development, the esteemed former Prime Minister of India, Indira Gandhi, articulated a perspective rooted in India’s diplomatic approach to climate change. She emphasized that India’s socio-economic circumstances should not be disregarded when addressing global environmental challenges primarily focused on the Northern Hemisphere. Vihma (2011) argues that the current predicament can be attributed to the actions of developed nations. Nevertheless, the tradition of Indian foreign policy was founded upon the ideas of non-alignment and sovereignty, which were further supported by the Group of 77 (G-77). India has made significant efforts to address this tradition, starting with its participation in the United Nations Framework Convention on Climate Change (UNFCCC) at the Rio Earth Summit in 1992. Subsequently, India became a signatory to the Kyoto Protocol on Climate Change in 1997 and actively engaged in the thirteenth Conference of the Parties (COP 13) at the Bali Summit in 2007. These developments have been documented by Agarwal and Narain (1991), Rajan (1997), and Rajamani (2008). The 13th Conference of the Parties (COP) Bali Summit in

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2007 marked a significant turning point in India’s energy strategy, as highlighted by Michaelowa and Michaelowa (2012, p. 579). In addition, India has also participated in several geopolitical initiatives, including its involvement in the multinational constellation known as BASIC (Brazil, South Africa, India, and China) and the BRICS group (Brazil, Russia, India, China, and South Africa) (Hallding et al., 2013, p. 612). Consequently, the BASIC countries have initiated discussions on solutions that are beyond the scope of the G77. This shift is driven by their economic progress, recognition of increased responsibilities as emerging economies, and the growing pressure to fulfill climate-related obligations (Mohan, 2017, p. 7). According to Dubash (2013, pp. 193– 194), significant domestic political changes have been interpreted as a consequence of prior personality-based politics. This trend can also be observed in the present Modi government, which has proposed the notion of India playing a more prominent role in addressing global energy-related and non-related issues (Mohan, 2017, p. 22). The submission of India’s Intended Nationally Determined Contributions (INDC) paper in October 2015 can be viewed within the context outlined by the Government of India (2015). Furthermore, it is evident that there is an increasing camaraderie among the members of the RIC (RussiaIndia-China) alliance in their efforts to assume a leadership role in global energy governance. This can be observed in numerous international platforms, including the United Nations, G-20, Shanghai Cooperation Organization (SCO), Asia-Europe Meetings (ASEM), Conference of the Parties (COPs), BRICS, and East Asian Summits. Table 1.4 presents a chronological overview of India’s alignment with different governance entities. In conclusion, a contentious issue arises over India’s reliance on imports of oil and gas, which can be attributed to the insufficient control of the indigenous energy sector. The absence of openness in the formulation of energy policies, the provision of energy statistics, and the inefficiency of national oil companies (NOCs) persist as challenges for both local and global energy governance. According to Ghosh (2011, pp. 108–109), India has had challenges in effectively managing its domestic energy governance, leading to its status as the world’s largest importer of oil and gas. The strategic objective of India’s energy diplomacy includes active engagement in global energy governance, which is considered as a means to achieve effective domestic energy governance. The capacity for energy diplomacy in India was assessed in the

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Table 1.4 India’s engagement in the global energy governance Institutions Years

Series of engagements

Pre-1990 (Lukewarm Engagement)

• Became the earliest member of World Energy Council in 1923 (WEC India) (as an independent it reconstituted WEC Indian Member Committee in 1999) • Joined International Atomic Energy Agency (IAEA) in 1957 • Signed the UNFCCC on 10 June 1992 but ratified on November 1, 1993 • Became a member of WTO on January 1, 1995 (member of GATT in July 1948) • Signed the Declaration of Cooperation with IEA in 1998 • Became a member of Joint Oil Data Initiative (JODI) in 2001 • Became a founding member of G-20 in 2003 and participating in major energy negotiations • Cooperation in the creation of SAARC Energy Centre in 2005 • Became one of the founding members of IEF to give it institutionalized shape in 2003 • Became a founding member of International Renewable Energy Agency (IRENA) in 2009 • Became a founding member of BRICS in 2010 • Upgraded its membership in IEA by getting status of “Association” in 2017 • Became a full member Shanghai Cooperation Organization in June 2017 thereby deepening engagement in the • “SCO Energy Club.”

1990s (Moderate Engagement)

2000 onwards (Active engagement)

Source Information collected by online data sources of concerned organizations

India Energy Outlook conducted by the International Energy Agency (IEA). According to the research conducted, India’s involvement in the global energy governance has been motivated by its national interests and political ideology. India’s energy policy has been influenced by several global variables since 1990, mostly due to the increased involvement of private enterprises in the energy industry (IEA, 2016). The incident prompted India to reassess its energy policies and implement both financial and policy adjustments. Nevertheless, the problem of energy trade has

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remained a significant source of worry, as India has not been able to fully use its potential within the context of energy discussions. India’s stance on the global energy crisis has lacked clarity due to its diplomatic and geopolitical interests. Undoubtedly, global energy governance encompasses a diverse range of challenges that present a complex research agenda within the current geopolitical and geo-economic strategies of different nations.

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Selivanova, Y. (2010). Managing the Patchwork of Agreements in Trade and Investment. In A. Goldthau & J. M. Witte (Eds.), Global Energy Governance: The New Rules of the Game (pp. 49–72). Brookings Institution Press. Selivanova, Y. (2012, January). International Energy Governance: The Role of the Energy Charter. In ASIL Annual Meeting Proceedings (American Society for International Law) (Vol. 106, pp. 394–398). Cambridge University Press. Shambaugh, G., & Zlotnick, A. (2014, November 03). Cave Hic Dragones: Transit Countries and The Geopolitical Consequences of Energy. Georgetown Journal of International Affairs. Retrieved January 10, 2017, from http://journal.georgetown.edu/cave-hic-dragones-transit-countr ies-and-the-geopolitical-consequences-of-energy/ Shaw, T. M. (2012). Conclusion: Energy Governance, Global Development and New Research Agendas. In C. Kuzemko, A. V. Belyi, A. Goldthau, & M. F. Keating (Eds.), Dynamics of Energy Governance in Europe and Asia (pp. 265– 281). Palgrave Macmillan. Steans, J., Pettiford, L., Diez, T., & El-Anis, I. (2010). An Introduction to International Relations Theory: Perspectives and Themes. Pearson Education Limited. Strange, S. (2013). States, Firms, and Diplomacy. In J. A. Frieden & D. A. Lake (Eds.), International Political Economy: Perspectives on Global Power and Wealth (4th ed., pp. 60–68). Routledge. Symons, J. (2012). Challenges to Energy Security in the Era of Climate Change. In L. Anceschi & J. Symons (Eds.), Energy Security in the Era of Climate Change: The Asia-Pacific Experience. Palgrave Macmillan. The Tribune. (2018, June 09). Not Eyeing Anyone’s Territory to Exploit Resources, Says PM. The Tribune (ePaper). Retrieved January 10, 2018, from http://epaper.tribuneindia.com/1499012/The-Tribune/TT-10January-2018#page/7/2 Toft, P., Duero, A., & Bieliauskas, A. (2010). Terrorist Targeting and Energy Security. Energy Policy, 38, 4411–4421. Vardy, N. (2007, March 28). The New Seven Sisters: Today’s Most Powerful Energy Companies. Seeking Alpha. Retrieved July 17, 2016, from https://seekingalpha.com/article/30922-the-new-seven-sisters-todaysmost-powerful-energy-companies Veseth, M. (2010). International Political Economy. In P. Bilgin, P. D. Williams, M. Sekiguchi, J. K. Galbraith, S. T. Inayatullah, J. Wiener, R. A. Schrire, & I. L. Murphy (Eds.), Global Security and International Political EconomyVolume-III (pp. 41–64). Eolss Publishers Co., Ltd. Vihma, A. (2011). India and the Global Climate Governance: Between Principles and Pragmatism. The Journal of Environment & Development, 20(1), 69–94. Viotti, P. R., & Kauppi, M. V. (2010). International Relations Theory (5th ed.). Longman.

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CHAPTER 2

Identifying and Addressing India’s Energy Challenges: A Policy Assessment

Energy is the “oxygen” of the economy and the life-blood of growth, particularly in the mass industrialization phase that emerging economic giants are facing today. —Peter Voser 1

This chapter provides an overview of India’s domestic energy profile within the framework of domestic energy policy. Energy security has remained a significant concern for India ever since the implementation of Liberalization-Privatization-Globalization (LPG) and structural economic reforms in the 1990s. According to Diwan (2009), the reforms implemented in the 1990s resulted in a shift in energy consumption patterns, transitioning from non-commercial energy sources to commercial energy sources. This transformation was driven by the increasing living standards of the population (p. 92). Hence, energy security has assumed a prominent role in India’s policy formulation during the twenty-first century. India, with a population above 1.2 billion, occupies the second position among the most populous nations globally. Furthermore, it holds the third position in terms of global primary energy consumption, following

1 Cited in Yergin, D., & Gross, S. (2012). Energy for Economic Growth: Energy Vision Update 2012; Industry Agenda. World Economic Forum.

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China and the United States. The economic growth and foreign relations of India have been significantly influenced by its dependence on energy imports, specifically oil and gas. This reliance has been driven by the increasing disparity between demand and supply. This statement highlights the establishment of strong connections between India’s domestic and foreign energy policies. Currently, the oil and gas sector continues to represent 40% of the overall global energy supply investment, as reported by the International Energy Agency in 2023. In the context of a rising country such as India, oil and gas account for about 36%, or one-third, of its energy consumption portfolio. India is currently facing a significant disparity between the production and consumption of oil (86%) and gas (25%). However, it is worth noting that India has been generating substantial cash from the trade of these resources. In a nation facing energy scarcity such as India, the government has formed the Ministry of Petroleum and Natural Gas (MoPNG) with the primary objective of engaging in energy policy deliberations pertaining to oil and gas (NITI Aayog, 2017). Hence, these matters are collectively considered within the context of policy deliberation. Insufficient oil and gas reserves within the nation have resulted in an escalating energy crisis due to the expanding energy demand. The energy projects are experiencing delays and interruptions due to policy uncertainty, hence exacerbating the current crisis. Nevertheless, it is noteworthy that India has made substantial advancements in the field of renewable energy technology. However, it is important to acknowledge that oil and gas continue to exert a dominant influence in the energy market and are expected to keep their hegemonic position over other resources in the foreseeable future. The success of initiatives such as “Make in India” and “Start-up India” is contingent upon meeting the future demands for oil and gas. The development of India, as envisioned by Prime Minister Narendra Modi, is centered around four key aspects referred to as the “four Es.” These include energy access, energy security, energy efficiency, and energy sustainability (Ministry of Finance, 2017). The attributes of energy policy encompass legislative measures, international agreements, investment incentives, directives for energy conservation, taxation, and other public policy strategies. The national and state policies are effectively utilized to determine the implementation strategies. Hence, these factors have been significantly influential in shaping the energy prospects of India. The energy

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industry in India has been hindered by a combination of factors, including the country’s unitary-cum-federal structure, the presence of an extensive bureaucracy, and the existence of complicated institutional structures. These factors have contributed to a lack of clarity and a lack of a cohesive vision for the energy sector in India. Hence, the establishment of a consistent and comprehensive energy policy has emerged as a crucial aspect of India’s national security agenda. The characterization of the energy sector in India may be observed through several initiatives such as the Integrated Energy Policy (IEP) of 2006, the coordinating efforts of the Indian Planning Commission (formerly known as the National Institution for Transforming India or NITI Ayog) in the energy sector, and the National Energy Policy of 2017. It is widely acknowledged that India’s increasing reliance on energy imports, driven by the limited availability of domestic resources, renders its energy requirements vulnerable to foreign price shocks. The primary driver behind the increasing energy consumption in India is economic expansion. In order to alleviate poverty, it is imperative for the economy to maintain a growth rate ranging from 8 to 10% throughout the course of the next 25 years. This objective necessitates a substantial use of energy resources (Bhaskar, 2013, p. 6). Therefore, the current circumstances necessitate a holistic and inclusive strategy to address these challenges, encompassing both domestic and international policy measures. According to Sreenivas and Dixit (2012, p. 10), a failure to comprehend the gravity of India’s energy security issues has resulted in multiple energy crises inside the sector. However, the reaction by the government to address these difficulties has been weak and insufficient. This chapter examines the strategies implemented by the government in order to attain energy security within the oil and gas sector, considering the background and contrasting factors.

Profiling India’s Energy Potential: Oil and Gas Sector India is poised to emerge as one of the leading global economies in terms of size and influence. Increased economic growth is associated with increased levels of energy consumption. Energy security is a significant consideration within both the internal and foreign policies of the Indian government. During his national address on the eve of India’s

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59th Independence Day in August 2005, President Abdul Kalam (2002– 2007) emphasized the imperative for India to achieve “energy security” as a means of transitioning towards complete energy independence (Hong, 2012). The former Prime Minister of India, Manmohan Singh, during his tenure from 2004 to 2014, articulated India’s apprehensions regarding energy security, which ranked second in importance after food security (Singh, 2004). Emphasizing the complexities associated with energy concerns in relation to India’s foreign and security policy, the speaker additionally asserted that energy security has become an integral component of India’s diplomatic endeavors (Sisodia & Bhaskar, 2005, p. 39). The user’s text does not contain any information. India’s interactions with many nations across the globe have seen significant transformation. Undoubtedly, hydrocarbons are recognized as energy resources that are not conducive to environmental sustainability. However, it is improbable to disregard their necessity in light of prevailing socio-economic challenges, including poverty, inequality, and the uneven distribution of resources within the nation. Nevertheless, the Indian government has made efforts to advance renewable technology; yet, the implementation of these technologies on a wide scale has proven to be challenging. According to Bhushan (2016), the future of India’s renewable energy sector is expected to rely on a decentralized and distributed power generation approach, similar to the successful model used in Germany, a global leader in renewable energy generation. India has established ambitious objectives as part of its National Action Plan on Climate Change, which encompass the attainment of 175 gigawatts (GW) of renewable energy capacity by 2022. Furthermore, India aims to elevate this target to 450 GW by the year 2030. Currently, India has been employing the electricity access paradigm characterized by centralized generation and grid-based distribution. Consequently, it has been unsuccessful in delivering a sufficient energy supply to all of its end-users. Nations such as India, characterized by abundant sunlight and wind resources, possess significant potential for the widespread adoption of renewable energy sources, hence indicating a promising trajectory for their future development. However, India did not saw significant advancements in this regard. According to Tongia (2014), it has been posited that India has encountered three policy problems in the implementation of renewable energy technologies. These challenges include intermittency/variability, locationspecific potential in relation to centralized generation and grid-based

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systems, as well as increased costs. Nevertheless, the government has been providing substantial support for the development and implementation of renewable energy sources. However, it has encountered many internal policy obstacles that have resulted in an increased dependence on traditional oil and gas resources. According to the India’s Energy Outlook (2015) report by the International Energy Agency (IEA), it is expected that the demand for oil will experience a significant growth of 10 million barrels per day (mb/d) from the current level of approximately 4 mb/d in the existing energy landscape. The demand for oil may not decrease, while conversely, the demand for natural gas is projected to climb at a pace of 8% by the year 2040, compared to its present rate of 6%. Hence, it is imperative for the Indian government to conduct a comprehensive analysis of the consumer support-base for these mechanisms, establish an efficient distribution system, and ensure coherence in the relationship between the central and state governments. It can be argued that the potential impact of Indian economic growth and policy reforms on poverty eradication is uncertain. However, it is evident that effectively managing energy security and supply poses a substantial problem for the country’s leadership. It is estimated that about 240 million individuals currently lack access to commercial energy sources. Under these prevailing conditions, India has been driven to prioritize subsidy reforms and energy efficiency initiatives as means to enhance the accessibility of energy resources. It is important to acknowledge that gasoline and diesel fuels are not included in the subsidy program, with the exception of natural gas. In this manner, the responsibility of providing subsidies to individuals of low socioeconomic status is necessary in order to facilitate accessibility, while also addressing the increasing demand from the middle class. The correlation between population increase and energy demand has been apparent, as government measures are being developed to ensure that every household has significant access to energy (IEA, 2015). According to the Census conducted in 2011, there was a significant disparity in population growth between urban and rural areas, with urban areas experiencing a notable increase. The rate of urbanization in India was recorded at 27.81% in 2001, which then rose to 31.16% in 2011 (Chandramouli, 2011). As to the latest census data from 2021, the urbanization rate has further climbed to 35.39%. The rural population has experienced a decrease from 72.19% in 2001 to 68.84% in 2011 (Chandramouli, 2011). Furthermore, according to the most recent 2021

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census, it has decreased further to 64.61%. According to Yueh (2013), it is estimated that India would emerge as the dominant middle class in Asia, overtaking China by 2030. This projection is based on the anticipated expansion of India’s middle class from 200 million individuals in 2020 to 475 million individuals by 2030. Consequently, India is expected to possess the largest middle-class population worldwide. According to Eggimann and Kendzia (2022), there has been a significant transformation in the geometry of India’s income pyramid, with a notable increase in its height, following the adoption of LPG consumption. Between the years 1995 and 2005, over 14 million families in India experienced upward mobility and transitioned into the middle class. According to Sankhe et al. (2010), there is an anticipated sevenfold growth in the aforementioned figure, with the number of households projected to rise from 14 million in 2005 to around 89 million by 2025 (p. 176). Consequently, this would lead to an increase in energy use motivated by preference rather than necessity. Within this context, there exists a prevailing expectation regarding the rapid escalation of energy consumption in India. During the fiscal year (FY) 2022–2023, India has achieved the status of being the second largest refiner in Asia, following China, with a refining capacity of 248.9 million metric tons per annum (MMTPA). Approximately 38.21% of the entire refining capacity in India is held by private enterprises. India has achieved significant milestones, such as its prominent standing as the third largest consumer of energy worldwide, the third largest consumer of oil, the third largest consumer of LPG, the fourth largest importer of LNG, the fourth largest refiner, and the fourth largest vehicle market. The aforementioned accomplishments exemplify India’s commitment to attaining self-reliance and promoting sustainable development. Moreover, it is estimated that India’s overall energy demand will increase from 723.9 million tonnes of oil equivalent (Mtoe) in 2016 to 1516 Mtoe by the year 2035, highlighting the nation’s dedication to sustained expansion. Therefore, it is projected that the global primary energy consumption share of this particular source will experience a twofold increase by the year 2035. Currently, the prevailing reality of energy consumption is not favorable to the establishment of an energy-efficient nation. The primary energy demand basket of India continues to be predominantly influenced by three major energy commodities: coal, oil, and gas. These commodities are expected to have a significant role in shaping India’s energy policy in the forthcoming decades. India possesses significant gas reserves,

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amounting to 1.2 trillion cubic meters (TCMs) as of the conclusion of 2016. Since the implementation of the Integrated Energy Policy (2006), India has been engaged in the production and importation of natural gas in order to fulfill its gas demand. The average production and importation rates have been recorded at 35.04 billion cubic meters (BCMs) and 11.23 BCMS, respectively. This initiative aims to provide a safe, clean, and convenient energy source in a financially sustainable manner, as documented by the BP(2017) and the Ministry of Petroleum and Natural Gas (2017). However, upon examination, it becomes evident that India’s natural gas consumption proportion is significantly lower compared to the global natural gas consumption share (one-fourth). Natural gas accounts for a mere 6% of India’s overall energy consumption portfolio. India’s proportionate contribution to global energy consumption in terms of oil and gas is approximately 5% and 1.4% respectively, resulting in a combined total of approximately 7%. This suggests a significant reliance on imported goods. Although coal is not a focal point of this study, it is being mentioned here to provide a comprehensive understanding of the energy landscape. India accounts for around 11% of the global coal consumption due to its significant dominance in the country’s overall primary energy consumption, which stands at 57%. This is mostly attributed to the extensive exploration of indigenous coal reserves, resulting in reduced reliance on coal imports. In aggregate, India currently accounts for over 20% of global energy consumption, while also representing approximately 17% of the global population. According to the ExxonMobil Report (2021), it is projected that both India and China would collectively account for around 45% of the global increase in energy demand by the year 2040. The current administration has been actively promoting the domestic production of oil and gas in accordance with its duties. Nevertheless, India has a scarcity of oil reserves. As of the conclusion of 2016, the total proven oil reserves amounted to 0.6 billion metric tonnes. By the year 2016, the total consumption of oil reached 232.87 million tonnes, while the production amounted to 36.94 million tonnes. This upward trend in consumption and production has been consistently observed over the past decade. There is a significant disparity evident. Consequently, the nation is compelled to rely on oil imports in order to bridge the current disparity between production and consumption. Over the course of the past decade, the average import volume has amounted to 202.85

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million tonnes, with the remaining need being fulfilled through domestic production. According to the Gross Domestic Product (GDP) data for the year 2014, it has been demonstrated that the transport industry predominantly relies on diesel fuel, accounting for 70% of its usage, while petrol constitutes 99.6% of its fuel consumption. This heavy reliance on diesel and petrol fuels by the transport sector has resulted in significant air pollution within the country. According to a report by The Economic Times (2015), the energy sector, specifically in the domains of power and transportation, has accounted for a significant proportion of emissions in India, comprising 58% of the total. The industry sector follows with a contribution of 22%, while the agriculture sector contributes 17% to overall pollution levels. These graphics provide evidence of significant oil use in India. When examining the distribution of oil consumption across sectors in India, it is evident that the industrial sector accounts for 12%, while the transport sector, along with residential usage, contributes a significant portion of 17% and 12%, respectively. The demand for crude oil in several significant economic activities has been steadily increasing and is expected to continue to rise in the future. In India, the power and fertilizer sectors are the primary consumers of natural gas, accounting for approximately 57% of the total gas consumption. In contrast, the transport and industrial sectors have significantly lower shares, representing around 5% and 6%, respectively, of the overall natural gas consumption. It is worth noting that these sectors, despite their relatively small consumption of natural gas, are the main sources of pollutant emissions in relation to oil consumption in India. The Indian government is making significant efforts to enhance the utilization of clean fuels, such as gas, within the transportation sector, with the aim of mitigating the adverse effects of greenhouse gas emissions. The rising rate of natural gas automobiles is clearly obvious. In 2021, India possesses the third largest fleet of natural gas vehicles globally, trailing after China and Indonesia. Pakistan, Argentina, and Brazil follow in succession. The Indian government has been implementing initiatives to promote the adoption of gas-based transportation. The implementation of the same in the state of Kerala marks the initial stride towards achieving this objective. The current administration demonstrates a strong inclination towards the advancement of renewable energy sources and natural gas, mostly driven by the global imperative to mitigate greenhouse gas emissions.

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It has been observed that India transitioned into a net importer of gas subsequent to 2005, despite possessing significant gas reserves. The rapid implementation of economic structural reforms, along with the expanding population, has contributed to the exacerbation of the disparity between the production and consumption of natural gas. The data indicates that India’s production of natural gas amounted to 32.25 billion cubic meters (BCMs) during the fiscal year 2015–2016. This quantity falls significantly short of the country’s domestic consumption, which amounted to 47.85 BCMs during the same period. It is noteworthy that India possesses proven reserves of 1.4 trillion cubic meters (TCMs) of natural gas. In order to address this deficiency, India procured 16.58 billion cubic meters (14.92 million tonnes of oil equivalent) of liquefied natural gas (LNG) during the aforementioned year. The current energy situation necessitates the implementation of demand-side management measures and the promotion of domestic exploration, alongside efforts to enhance energy efficiency in India, in order to attain energy security by 2030. During a recent meeting with CEOs from the oil and gas industries, Prime Minister Narendra Modi highlighted his concern on the uneven status of India’s energy industry. He emphasized the existence of potential for changes in various areas. The individual emphasized the importance of establishing cohesive energy policy contract frameworks and arrangements, promoting the use of biofuels, and enhancing gas supply in order to facilitate the advancement of clean energy in the future (PTI, 2017). India is evidently characterized by its dual role as both a producer and consumer of energy, while simultaneously serving as a net importer of oil and gas resources. During his address at the 8th Asia Gas Partnership Summit in 2013, former Indian Prime Minister Manmohan Singh (2004–2014) emphasized the crucial role of market-based pricing and technological advancements in fulfilling the energy demands of the nation and ensuring that India has access to energy solutions that align with its specific requirements. The introduction of shale gas technology in the United States serves as a prime illustration in this context. He placed significant importance on the domestic investigation and exploitation of energy resources. According to PTI (2014), the government is actively promoting the exploration of onshore and offshore regions by both domestic and foreign enterprises. This initiative is crucial in addressing the disparity between demand and supply. The primary goal of the current administration is to foster the advancement of native technologies in order to facilitate the exploration of

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domestic energy resources and facilitate the widespread availability of energy. During the inauguration of the 12th PETROTECH—International Oil and Gas Conference (2016), Prime Minister Narendra Modi addressed the importance of achieving stable, sustainable, and affordable energy for the economic development of the country. He emphasized the need to extend the benefits of energy access to all sections of society, particularly those at the lower end of the socio-economic spectrum. The Prime Minister also acknowledged that hydrocarbons will continue to play a dominant role as an energy source for many years to come. The individual anticipated a five-fold expansion of the Indian economy by the year 2040, which would position India as a significant center for around one-fourth of the world’s energy requirements. Furthermore, it was projected that India’s oil consumption in 2040 would surpass that of the entire European continent. According to Petrotech-2016 (2016), Prime Minister Modi has expressed his anticipation for the manufacturing sector to contribute 25% to the Gross Domestic Product (GDP) by 2022, as opposed to the current 16%. Hence, it is anticipated that India’s “Make in India” programs will exert further strain on energy supplies. India should consider these challenges while formulating plans and policies pertaining to energy security. India has made efforts to decrease its present energy intensity, which is influenced by factors such as the contribution of specific sectors to the economy, the adoption of contemporary technologies and energy infrastructure, and the government’s financial investment strategy. The energy consumption pattern in India is heavily reliant on the oil and coal sectors, with a significant share attributed to these sources. However, the growth rate of gas consumption remains sluggish due to inadequate measures in place to promote its usage. Per capita energy consumption and energy intensity serve as robust policy indicators at both national and global scales. The measurement of energy intensity is a crucial determinant for assessing the energy demand patterns and economic well-being of a given nation. The metric in question pertains to the evaluation of an economy’s productivity relative to its energy consumption on a per unit basis. Consequently, a larger economy is associated with increased levels of energy consumption. The observed decrease in energy intensity may potentially serve as an indicator of the accelerated rate of economic expansion, as measured by GDP. In the Indian context, there has been a consistent drop in energy intensity through time, and it is expected to continue

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decreasing. This trend signifies the increasing energy efficiency of the Indian economy. India is positioned among the top five nations in terms of energy consumption. However, its per capita energy consumption is merely one-third of the global average and approximately one-eleventh of that of the United States. This observation highlights the issue of energy poverty and limited accessibility in India. The proposition is for India to increase its energy production in order to enhance the standard of living for its population by ensuring universal access. India is situated in a significant position in terms of energy intensity and is making progress towards enhancing energy efficiency. The energy intensity of India, measured in terms of 2005 US$ exchange, saw a decline from 0.152 koe/$2005p in 2006 to 0.122 koe/$2005p in 2016. Nevertheless, the per capita energy consumption of the country reveals a disheartening depiction of inequitable distribution of energy resources. The per capita energy consumption in India had a growth from 467.55 kgoe in 2006 to 637.43 kgoe in 2014, with a compound annual growth rate (CAGR) of –4.11%. This growth rate of 36.34% highlights a significant discrepancy and unequal access to energy resources. The per capita energy consumption experienced a yearly growth rate of 5.04%, with a rise from 606.87 kgoe in 2013 to 637.43 kgoe in 2014. The disparity between per capita energy consumption and energy intensity in India highlights the country’s failure to achieve equitable energy access for all individuals. A significant section of the people continues to reside in conditions lacking access to energy resources. Hence, it is imperative for India to achieve universal energy access while concurrently prioritizing per capita energy consumption inside the nation. The energy intensity is comparatively lower in relation to the GDP, indicating the need for the country to prioritize its economic policies in light of increasing energy demand, underutilization of energy efficiency programs, and the expanding role of the service sector in the economy (Ministry of Statistics and Programme Implementation, Government of India, 2017). India’s relatively low energy intensity, as measured by per capita energy consumption, in compared to other countries suggests that India’s economy is labor-intensive, with a higher proportion of industrial production contributing to its GDP. Energy intensity and energy efficiency are closely connected elements that have an impact on the demand

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for energy (Tripathi, 2013, p. 87). The energy landscape of India is undergoing rapid changes as a result of its rapid economic expansion. These transitions have presented new difficulties, prompting India to periodically reassess its energy policy.

Sectorial Snapshot of Oil and Gas Landscape in India---Pertaining Issues The oil and gas industries are categorized into three distinct sectors, namely upstream, midstream, and downstream, which are delineated by the value chains that encompass the progression from crude oil to final products. However, while this phenomenon is observed across other industries, the energy sector in India has a significant position due to its substantial investments and income generation capabilities, making it a topic of considerable focus. According to Kar (2017a), the upstream industry in India has had a complex history characterized by the involvement of policy-makers, operators, and regulators, leading to conflicts of interest and a subsequent decline in investor trust (Fig. 2.1). Despite the implementation of numerous reforms, India continues to have significant challenges in its supply chain management across upstream, middle, and downstream sectors, necessitating urgent attention. The upstream sector has been urging the Indian government to establish an independent regulatory agency in order to foster a more efficient, transparent, and competitive environment for oil and gas exploration. The upstream segment primarily consists of companies involved in exploration and production activities, while the midstream segment encompasses entities engaged in storage and transportation. The downstream segment comprises players involved in the refining, processing, and marketing of petroleum products. Additionally, the government prioritized the establishment of a fair and equitable business climate in both the upstream and downstream sectors by guaranteeing unimpeded access to shared infrastructure at regulated rates. Upstream Sector India possesses a sedimentary expanse of approximately 3.14 million square kilometers, encompassing 26 significant sedimentary basins that are characterized by a substantial abundance of organic materials and fossils. Veerappa Moily, who served as the Minister of Petroleum and

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India's Energy Infrastructure

State-owned ONGC dominate the upstream segment of exploration and production, accounting for about 61.5 per cent of India’s total oil output (FY17).

Upstream Exploration and Production

Midstream

Transportaion (Pipelines and Storage)

Refinary and Marketing

ONGC, OVL, OIL, Reliance, BGEPIL, Cairn India

IOCL, GAIL etc.

IOCL, BPCL, HPCL, Reliance, CPCL, BRPL, NRL

Downstream IOCL biggest Downstream and Midstream company, operating 11, 214 km network (around 30 per cent of nation’s total pipeline network) of crude, gas and product pipelines, with a capacity of 1.6 MBPD of oil and 10 MMSCMD of Gas. In downstream, it controls 10 out of 22 Indian refineries with a capacity of 1.6 MBPD. Reliance is India’s first privately owned refinery with considerable market share (30 per cent).

Fig. 2.1 India’s energy infrastructure and supply chain management (Note IOCL, BPCL, HPCL, IGL, CPCL, BRPL, and BP are downstream companies. The ONGC and OIL, Reliance, BGEPIL, Cairn India are upstream companies. Midstream companies are IOCL and GAIL. Most of the upstream companies also do the midstream and downstream operations themselves. Source Ministry of Petroleum and Natural Gas, India Brand Equity Foundation)

Natural Gas from 2012 to 2014, proposed the establishment of a Multi Organization Team (MOT) with the objective of conducting a comprehensive evaluation of the oil and gas reserves in all sedimentary basins by the year 2016 (Mehdudia, 2016). The Western basin includes the states of Gujarat and Rajasthan, which are known for their significant oil deposits. Similarly, the Eastern basin, including the Assam-Arakan region, is also recognized for its substantial oil reserves. The categorization of sedimentary basins is determined by the uneven distribution of resources and the potential for extraction. This classification includes the designation of deepwater sedimentary areas. Category-1 includes commercial producing basins, including Cambay, Assam Shelf, Mumbai Offshore, Krishna-Godavari, Cauvery, Assam-Arakan Fold Belt, and Rajasthan, which collectively span an area of 532,500 square kilometers. Crude oil and natural gas are being extracted from these seven basins, which encompass both onshore and offshore deepwater regions. Category-2

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basins, spanning an area of 182,000 km2 , refer to basins that have been identified but have not yet commenced commercial production. The aforementioned basins encompass Kutch, Mahanadi-North-East Coast, and Andaman-Nicobar. Within the third category, there exists a collection of basins spanning an area of 660,000 square kilometers that are currently undergoing evaluation due to their potential for future development. This classification encompasses six distinct basins, namely the Himalayan Foreland, Ganga, Vindhyan, Saurashtra, Kerala-Konkan-Lakshadweep, and Bengal basins (Fig. 2.2). Category-4 (461,200 km2 ) comprises ten basins, namely Karewa, SpitiZanskar, Satpura-South Rewa-Damodar, Narmada, Deccan Syneclise, Bhima-Kaladgi, Cuddapah, Pranhita–Godavari, Bastar, and Chhattisgarh (as shown in Map 2.1). These basins possess uncertain potential, which may be prospective when considering analogous basins found elsewhere in the world. According to the Energy Statistics report (2017) published by the Indian Ministry of Statistics and Programme Implementation, India’s crude oil reserves are assessed to be 621.10 million metric tons (MTs), while its natural gas reserves are projected to be 1227.23 billion cubic meters (BCMs). The Exclusive Economic Zone (EEZ) of India encompasses deepwater waters of approximately 129,900 square kilometers. Currently, a total of 81 deepwater blocks have been granted, although only ten of these blocks are currently operating. This limited number of operational blocks can be attributed to delays in the issuance of Petroleum Exploration Licenses

Fig. 2.2 India’s Sedimentary basins of established and prospective oil and gas explorations area (sq. km) (Source Ministry of Petroleum and Natural Gas)

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Map 2.1 Sedimentary basins of Indian sub-continent (Source Ministry of Petroleum and Natural Gas, Directorate General of Hydrocarbons, GOI)

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for domestic exploration and production of oil and gas, as well as a lack of interest from corporations in engaging with this high-risk sector. The extraction of crude oil and natural gas in the nation has been limited to seven basins falling into category-1 and deepwater regions (refer to Map 4.1). According to the MoPNG-2016–17 report, India possesses an estimated 28.1 billion tonnes (oil and oil equivalent of gas) of conventional hydrocarbon resources in 15 basins and deepwater areas. Out of this total, approximately 11 billion tonnes (BTs) (oil and oil equivalent of gas), accounting for roughly 40%, have been confirmed as reserves through the efforts of ONGC, OIL, private companies, and joint ventures (JVs). Hence, around 60% of hydrocarbon resources are classified as “yet to be found,” necessitating significant exploration efforts. It is widely recognized in scholarly circles that oil holds a significant position within the energy policy of India. India’s strategy for ensuring energy security, namely in terms of oil and gas, has mostly focused on establishing numerous supply agreements with a wide range of possible suppliers. Currently, the objective of energy diplomacy encompasses several aspects, including facilitating the success of Indian enterprises in securing agreements, guaranteeing a stable energy supply, establishing a foundation for collaboration, attracting investments and technological advancements, and promoting investments from producer nations in India’s downstream sector (South Asia Monitor, 2006). The identification of offshore Bombay high fields by ONGC in 1974 drew the interest of policy-makers towards natural gas. Subsequently, the Indian government acknowledged the necessity of a gas distribution network, leading to the founding of the Gas Authority of India Limited (GAIL) in 1984 as a state-owned entity. According to Jain and Sen (2011), ONGC made an additional significant discovery in a western offshore basin field in 1988, which marked a further advancement in gas production during the 1990s (p. 9). These discoveries have been demonstrated to represent a pivotal moment in the Indian energy sector, as they have altered the industry’s structure by fostering greater private investment and providing new avenues for attaining energy security. The oil and gas infrastructures in India, particularly those located upstream, have been deemed insufficient as a result of poor investment since the country gained independence. Consequently, the production of oil and gas has experienced a state of stagnation, unable to match the increasing demand. The sector exhibits a restricted involvement of

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foreign and private entities, as evidenced by their diminishing participation in the New Exploration Licensing Policy (NELP) rounds. In the case of NELP-VII (2008), a total of 21 foreign companies were involved, whereas NELP-VIII (2009) saw the participation of ten foreign companies (Kumar, 2012). In the subsequent NELP IX, only eight out of the 37 companies were foreign, and among them, only two were new entrants to the sector (IHS Marki, 2011). The National Exploration Licensing Policy (NELP) has authorized full Foreign Direct Investment (FDI) in the exploration and production of oil and gas. In the preceding nine rounds, the government has allocated a total of 254 blocks for the purpose of exploration, thereby playing a substantial role in the domestic exploration of natural resources (PTI, 2013). However, the extraction and production expenses of energy are considerably more than its realizable worth, rendering the energy business highly precarious. According to the Directorate General of Hydrocarbons (2017a, 2017b), several businesses, including ONGC and OIL, are currently expanding their operations in the exploration industry. The NELP (1997) was designed with the specific objective of promoting competition between private companies and state enterprises in this sector. The technology has brought about a significant transformation in the energy industry of India. Presently, the government is diligently endeavoring to enhance the output of domestic oil and gas. The Hydrocarbon Exploration and Licensing Policy (HELP)-2016, adopted by the Government, offers a range of options to investors and producers in the hydrocarbon sector. The strategy encompasses a unified license for the exploration and production of various hydrocarbon types, an open acreage approach, a streamlined revenue sharing model that is simple to administer, the granting of marketing and pricing autonomy for crude oil and natural gas, as well as decreased royalty rates specifically for offshore regions. According to Kar (2017a, 2017b), the government is expecting that investors and producers will seize these chances. In order to enhance the facilitation of business operations, the Indian government has implemented several modifications in the approach to distributing money from Production Sharing Contracts (PSCs) to money Sharing Contracts (RSCs). Under the Production Sharing Contracts (PSCs) framework, investors were granted the privilege of recouping their initial investment prior to distributing profits or revenues with the government, as stipulated in the New Exploration Licensing Policy (NELP). In contrast,

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Revenue Sharing Contracts (RSCs) are considered a fiscal regime that serves as a potential substitute for Production Sharing Contracts (PSCs). The government obtains its portion of revenue from the exploration party right from the outset in order to establish trust among both Indian and foreign investors. The inclusion of Revenue Sharing Contracts (RSCs) in India’s recent fiscal framework, known as the Hydrocarbon Exploration and Licensing Policy (HELP), has extended its application from coal bed methane (CBM) exploration, which had initially implemented RSCs in 1997, to the oil and gas sector. This development occurred on March 10, 2016. According to Abraham (2016), it is anticipated that this particular endeavor will serve as a significant source of money for the Indian government. Against this context, there has been a notable growth in exploration activities inside the sedimentary basin region, rising from 11 to 58% during the past few decades. The implementation of the New Exploration Licensing Policy (NELP) in India has resulted in the allocation of 47.3% of the sedimentary basin area, a significant increase from the previous allocation of 11% prior to the policy’s implementation in 1997. Nevertheless, the potential effects of the Higher Education Loan Program (HELP) on the upstream sector remain uncertain and will only become apparent in the forthcoming years. According to Pant (2015, p. 5), it has been suggested that India’s domestic energy exploration requires a regulatory framework that can effectively attract substantial international investment. This is due to the fact that approximately 75% of the country’s sedimentary basin remains unexplored. Foreign direct investment (FDI) in the upstream Petroleum and Natural Gas sector has seen periodic liberalization throughout the course of recent decades. The energy sector has experienced limited growth due to insufficient investment, necessitating a greater infusion of capital. Nevertheless, the Ministry of Petroleum and Natural Gas (MoPNG) has consistently made efforts to attract Foreign Direct Investment (FDI). The Ministry of Petroleum and Natural Gas (2017) has implemented a policy change that permits Central Public Sector Enterprises (CPSEs) to engage in petroleum refining activities with foreign direct investment (FDI) up to 49% of foreign equity. This change eliminates the requirement for CPSEs to seek approval from the Foreign Investment Promotion Board (FIPB). Additionally, the policy allows for 100% FDI in activities related to oil and gas exploration. During the fiscal year 2021–2022, the petroleum and natural gas (P&NG) industry garnered a foreign direct investment (FDI) influx amounting to 56

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million USD, constituting 0.1% of the total FDI inflow of 58,773 million USD in the national economy. The influx of foreign direct investment (FDI) in the upstream sector of the oil and gas industry has exhibited variability over time. According to the Ministry of Petroleum and Natural Gas (2017), the fiscal year 2011– 2012 witnessed the biggest foreign direct investment (FDI) inflow in the country, amounting to US$ 2030 million. This particular industry accounted for around 6% of the total FDI inflow across all sectors. The decline occurred during subsequent years as a result of the sluggish implementation of policy reforms, pervasive corruption, the complexities of multi-party politics, inadequate capabilities in managing large-scale projects, and frequent changes in government leadership. It is noteworthy that India’s aggregate outward average investment from 2013 to 2016 amounted to $6 billion, a significantly lower figure compared to its Asian equivalent, China. Chinese foreign direct investment (FDI) has seen consistent growth in recent years, while India’s outbound FDI regime has demonstrated fluctuations. The outflow of India’s foreign direct investment (FDI) has experienced a decrease of approximately 33% as of 2017. The average external investment from China between 2013 and 2016 reached a substantial amount of $135 billion. India has emerged as a significant business partner in Central Asia, the Middle East, and Africa. It is noteworthy to observe that in 2016, China’s total outward investment amounted to $183 billion, surpassing its inward foreign direct investment (FDI) inflow of $134 billion. In contrast, it is noteworthy that India’s total overseas investment amounted to a relatively modest sum of $5 billion, a significantly smaller figure compared to its inbound foreign direct investment (FDI) inflow of $44 billion in 2016, as reported by UNCTAD (2017). China’s state-owned multinational firms have been able to access abroad oil and gas reserves and international assets due to the diplomatic support provided by the Chinese government. Nevertheless, the Indian government is actively promoting its domestic industries through abroad investments. However, Chinese enterprises consistently exhibit a propensity to outbid Indian counterparts in their pursuit of acquiring global assets. This indicates a lower level of India’s involvement in global economy. The current global economic and political landscape in the twenty-first century seems to be characterized by the emergence of a new world order. This new order is marked by the rise of major Asian

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economic powers, which are introducing intense competition in many regions. Some observers have likened this situation to a new cold war or a form of “new colonialism.” Mapping India’s Engagement in Global Energy Landscape India’s energy security is significantly influenced by its status as a net importer of energy and its pursuit of equity oil and gas assets abroad to maintain a stable demand–supply equilibrium. The Indian government has been preparing non-objection certificates (NOCs) for OVL, OIL, and GAIL in order to actively seek international equity hydrocarbon prospects. ONGC Videsh Limited (OVL), serving as the worldwide subsidiary of the Oil and Natural Gas Corporation (ONGC) in India, has established a significant presence and demonstrated its commitment to investment in eighteen countries. The primary objective of these endeavors is to engage in exploration, development, and production activities related to oil and gas resources located outside the borders of India. The company possesses participating interests in a total of thirty-nine oil and gas properties located across eighteen different nations. According to the United Nations Conference on Trade and Development (UNCTAD, 2017), OVL has been positioned as the 25th most prominent nonfinancial state-owned multinational corporation in terms of foreign assets. In the fiscal year 2017, it accounted for 23.4% of India’s domestic oil output and 18.9% of its natural gas production. The Oil and Natural Gas Corporation Limited (ONGC) subsidiary, Oil India Limited (OIL), has the position of being the second largest petroleum corporation in India, both in terms of output and reserves, with its parent firm ONGC being the only entity surpassing it in these aspects. According to ONGC Videsh Limited (2017), there was a marginal increase in output for the OVL in the fiscal year 2016–2017, reaching 8.9 Mtoe compared to the previous year’s production of 8.8 Mtoe in 2014–2015. In addition to the Middle East and Africa, the OVL has successfully established a significant presence in Iran, Kazakhstan, Turkmenistan, and Tajikistan. Furthermore, the company has submitted formal bids for the Tengiz and Kashagan oil fields, as well as the Kurmangazy and Darkhan exploration blocks, located in Kazakhstan. In December 2015, the acquisition of a 15% stake in Vankorneft, a wholly owned subsidiary of Rosneft, by OVL was approved by the Cabinet Committee on Economic Affairs (CCEA). The transaction was

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completed at a cost of US$1.2 billion. All necessary procedures were finalized on May 31, 2016. The hydrocarbon resources would amount to 4.5 million metric tons of oil equivalent (mmtoe). Furthermore, the organization is currently engaged in a negotiation process to acquire an additional stake of 11% in the aforementioned entity. This acquisition would result in an increase of 3.32 million metric tonnes of oil equivalent (Mmtoe) in its overall share. In addition, a consortium consisting of Oil India Ltd (OIL), Bharat Petro Resources Ltd (BPRL), and Indian Oil Corporation Ltd (IOCL) entered into a Share Sale Agreement (SSA) on March 16, 2016, in New Delhi. The purpose of this agreement was to acquire a 23.9% stake in Vankorneft. The hydrocarbon resources would amount to 7.22 million tonnes of oil equivalent (Mtoe). Upon the successful completion of these procedural requirements, namely the acquisition of an 11% investment by OVL and a 23.9% stake by the India Consortium, the Indian Public Sector Companies will possess around 50% (specifically 49.9%) ownership in Vankorneft. This transaction will result in the addition of over 15 million tonnes of oil equivalent (Mtoe) in hydrocarbon resources to bolster India’s energy security (Energy InfraPost, 2016). During the fiscal year 2022–2023, India had a notable rise in its expenditure on crude oil imports, reaching a total of $158 billion. This is a significant increase compared to the prior fiscal year, where the expenditure was at $121 billion. During the year of 2022–2023, there was a significant rise of 9.4% in the volume of crude imports, resulting in a total of 232.4 million metric tonnes. Currently, India is reliant on imports for over 70% of its oil requirements, with a significant portion being sourced from the Middle East, hence holding a substantial position in the Indian oil market. Hence, the import dependency of India has many implications on the country’s foreign policy. According to estimates, India is projected to become the third largest energy importer by the year 2025, with imports accounting for at least 90% of its energy consumption. In 2016, India’s crude oil imports amounted to about 3.9 million barrels per day, equivalent to a total of 202.85 million metric tons during the fiscal year 2015–2016. According to Mahalingam (2013), there is a lack of substantial international crude oil imports from both India’s OVL and Chinese firms. The majority of OVL’s oil produced abroad is sold in the local and international markets with the aim of generating profits. In Middle East, Saudi Arabia remains at the India’s top supplier with 20% share in oil imports. India imports approximately 60% of its

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total crude oil imports from Middle East countries. The second largest destination of crude oil imports is African region2 with 18% share in which Nigeria contributes 11% in total Africa’s crude oil export to India. South America has also a substantial share with total 14 (3 + 11) percent in which Venezuela accounts for 11% of Indian crude oil imports whereas other countries3 have approximately 7% share. Supply disruption in many Middle Eastern countries due to instability and western sanctions and their dominating role in Indian energy imports have forced New Delhi government to look for other destinations such as Africa and Eurasia to diversify its energy supplies. Indian corporations have been expanding their presence into the Eurasian region. During the fiscal year 2015–2016, the Eurasia area, which includes countries such as Russia, Azerbaijan, Kazakhstan, Turkmenistan, etc., constituted around one percent of India’s total crude oil imports, as depicted. Nevertheless, India has encountered significant challenges within the region as a result of physical and geopolitical impediments. Hence, the Eurasian region has emerged as a prominent focus of India’s energy diplomacy in recent times. Natural Gas Demand-Supply Scenario Natural gas is a derivative of crude oil and is classified as one of the clean fuel sources. The anticipated increase in the demand for gasoline is projected to be substantial in the forthcoming decades. India’s natural gas use is reliant on imports, with around 34% of its consumption being sourced from Qatar. The lack of pipeline connectivity with other nations can be attributed to geographical obstacles and the instability of neighboring countries. Consequently, in order to facilitate the importation of liquefied natural gas (LNG), it is necessary to engage in long-term or spot contracts (BP Petroleum Statistical Review, 2021). In the Middle East, Qatar continues to hold the position of being India’s primary supplier, accounting for 66% of the country’s imports of liquefied natural gas (LNG). India’s LNG imports from Middle East countries account for nearly 70% of its overall imports. The African region 2 Egypt, Algeria, Angola, Sudan, Congo, Gabon, Cameroon, Chad, Equatorial Guinea, Togo, Côte d’Ivoire, Guinea. 3 Mexico, Malaysia, Brazil, Brunei, Ecuador, Colombia, Australia, Netherlands Antilles, Netherlands, Argentina, China, Sri Lanka, Indonesia, Pakistan, USA, Japan, Korea RP, Unspecified.

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serves as the second largest recipient of liquefied natural gas (LNG) imports, accounting for 16% of the entire share. Within this region, Nigeria plays a significant role by contributing 11% to Africa’s overall LNG exports to India. Other nations possess a roughly 14% portion. Currently, India is engaged in domestic oil and gas exploration activities in the offshore regions of Mumbai High Field and the Krishna-Godavari basins. The majority of onshore gas production is mostly centered in the states of Andhra Pradesh, Assam, and Gujarat. According to Ebinger (2016, pp. 14–15), there is a belief that the successful development of predicted gas resources and the realization of LNG pipeline projects in India will result in a significant surge in the demand for natural gas. India has been actively pursuing pipeline diplomacy with energy exporting nations through several initiatives, including the TurkmenistanAfghanistan-Pakistan-India (TAPI) pipeline, the Iran-Pakistan-India (IPI) pipeline, an undersea pipeline via Oman, and the Myanmar-BangladeshIndia (MBI) pipeline. Regrettably, India lacks transnational pipes for the importation of liquefied natural gas (LNG), resulting in its unable to access its own equity gas. In contrast, Chinese enterprises have had greater success in facilitating gas imports into their country through the utilization of transnational pipelines (Mahalingam, 2013). Currently, India possesses four liquefied natural gas (LNG) import facilities, which collectively have a capacity of approximately 26.3 million metric tonnes per annum (MMTPA). These terminals contribute to meeting over 50% of India’s total gas demand. The largest terminal in Gujarat is Dahej, with a capacity of around 15 million metric tonnes per annum (MMTPA). This terminal is owned by Petronet LNG. The Hazira LNG terminal, with a capacity of around 5 million metric tonnes per annum (MMTPA), is owned by a joint venture between Total and Shell. There are two further terminals located in Dabhol and Kochi, with capacities of around 1.3 million metric tons per annum (MMTPA) and 5 MMTPA, respectively. These terminals are owned by Ratnagiri Gas and Power Private Limited (RGPPL) and Petronet LNG. According to the Ministry of Petroleum and Natural Gas (2017), three additional facilities in Mundra, Ennore, and Kakinada have received approval for their final construction. The purpose of these facilities is to enhance the regasification capacity, with a target of reaching 48.5 million metric tonnes per annum (MMTPA) by the year 2020. It is noteworthy to acknowledge that the advent of the shale gas revolution in the United States has significantly bolstered the Indo-US

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relationship, particularly in terms of the exchange of technical expertise pertaining to shale gas exploration. The estimated quantity is more than that of natural gas and oil. The regions of Rajasthan, Gujarat, KG basin, Central India, and offshore portions of the Bay of Bengal have been identified as the most affluent locations in terms of shale gas resources. The first drilling technique in shale gas was successfully completed by ONGC in 2011. Currently, ONGC and OIL have successfully concluded exploration activities in 50 and 5 blocks, respectively, in accordance with the shale gas policy guidelines established by the government. If India were to increase its utilization of natural gas and shale gas technologies, it might potentially decrease its significant reliance on oil imports. Nevertheless, the development of this particular endeavor will require a significant amount of time and substantial long-term investment. Nonetheless, it is crucial to acknowledge that this initiative will serve as a significant contribution to the domestic energy supply, hence ensuring energy security (Ebinger, 2013, pp. 44–45; Ministry of Petroleum and Natural Gas, 2017). According to the findings of the Directorate General of Hydrocarbons, Government of India (2017b), shale oil and gas reserves have been discovered in multiple basins across India, including the Cambay, Gondwana, KG, Cauvery, Indo-Gangetic, Assam, and Assam-Arakan Basins. In general, the upstream industry in India is making significant strides towards improvement. However, there are several policy challenges that need to be addressed. These include an insufficient investment climate, limited expertise in offshore investment, a shortage of trained people resources and domestic manufacturing capabilities, as well as outmoded infrastructure. Additionally, this encompasses the lack of pipeline connectivity, the increasing competition in international oil equity from prominent energy corporations, and various tax and regulatory concerns.

Midstream and Downstream Sector The midstream petroleum business in India has faced challenges due to a relatively low pipeline density compared to countries such as the United States, UK, and China. These countries have an approximate density of 50 kilometers per 1000 square miles, which is 16 times higher than India’s density of 3 kilometers. Hence, it is imperative for India to allocate additional resources towards the development of the midstream sector, with a specific focus on enhancing the overall length and capacity of pipelines.

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GAIL (India) is the leading operator and marketing business in the natural gas industry, responsible for overseeing a significant portion of the gas transmission infrastructure. Specifically, GAIL (India) manages a pipeline network of 11,077 km, which is a substantial portion of the overall gas pipeline length of 16,250 km. Since its establishment in 1984, the organization has functioned as a Central Public Sector Undertaking (CPSU). Over the years, it has expanded its operations to include many sectors such as gas transmission, re-gasified liquefied natural gas (R-LNG), power generation, city gas (compressed and piped gas), liquid petroleum gas (LPG), marketing, and petrochemicals. The growth of India’s exploration, production, and demand is expected to have a positive impact on the gas sector, hence supporting India’s goal of expanding transportation through pipelines (Table 2.1). In contrast, among the 9864 km of crude oil pipeline, the main Indian oil operating and marketing organizations, namely IOCL, OIL, and ONGC, collectively oversee about 4867 km, 1193 km, and 1180 km of oil transmission pipelines in the country. IOCL is actively involved in the distribution of petroleum products, with a significant contribution of 6739 km of pipeline out of the total 14,972 km network in the country. In May 2015, the Minister of Petroleum and Natural Gas, Dharmendra Pradhan, outlined the key goals of the National Gas Grid (NGG) during a session in the Rajya Sabha. The government’s primary focus is to address the regional disparities in natural gas availability across the country, with the aim of encouraging the adoption of clean and sustainable energy practices among end-users in various sectors. The objective is to construct a decentralized national gas grid system that connects gas supplies with important demand centers, thereby assuring universal energy access for all users. Furthermore, the government will implement essential measures to facilitate the establishment of City Gas Distribution Networks (CGDN) in several urban areas, with the objective of providing a reliable supply of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG). In order to accomplish these objectives, it is imperative for India to augment its natural gas pipeline infrastructure by doubling its current capacity. This entails the construction of an additional 15,000 kilometers of gas pipes within the country. The government, specifically the Petroleum and Natural Gas Regulatory Board (PNGRB), has approved the construction of approximately 11,900 kilometers of pipes in the specified direction. Additional pipeline infrastructure will be developed in the foreseeable future (PIB, 2015). At present, the nation possesses a functional network

Length (KM) CAP (MMSCMD)

GAIL 11,077 206

Source Petroleum Planning and Analysis Cell, MoPNG (2020)

Natural Gas (As on 1.4.2016)

Natural Gas Pipeline Network

Products (As on 1.4.2016

1180 57.1

Crude Oil (As on 1.4.2016)

Length (KM) CAP (MMTPA) Length (KM) CAP (MMTPA)

ONGC

Nature of Pipeline

Reliance 1469 80

1193 8.4 654 1.7

OIL

GSPL 2540 43

670 8.7 – –

Cairn

ARN 1000 6

1017 9.0 – –

HMEL

IOCL 140 9.5

4867 40.4 6739 40.2

IOCL

Crude oil, petroleum products, and natural gas pipeline networks in India

Crude Oil and Petroleum Product Pipeline Network

Table 2.1

ONGC 24 6

937 6.0 1935 14.9

BPCL

Total 16,250 350.5

– – 2957 31.6

HPCL

– – 2687 9.3

Other

9864 129.6 14,972 97.7

Total

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of Natural Gas pipelines that covers a distance of around 17,000 kilometers. In order to facilitate the extensive dissemination of natural gas across the entirety of the country, the Indian government has also been making efforts to enhance the capacity of its Strategic Petroleum Reserves (SPRs). However, the Indian administration has been unable in improving its Strategic Petroleum Reserves (SPRs) capabilities, which requires a comprehensive restructuring. At present, Strategic Petroleum Reserves (SPRs) are situated at Mangalore, Vishakhapatnam, and Padur, possessing a capacity of 5 million metric tonnes, equivalent to ten days of consumption. However, this capacity is deemed insufficient to adequately address potential future energy crises, supply disruptions, and national calamities. The latest National Energy Policy has proposed an augmentation of the strategic petroleum reserves (SPRs) to meet the exigency of energy disruptions by extending the storage capacity to cover up to 90 days of usage. The construction of these SPRs was initiated on January 7, 2004, by the Ministry of Petroleum and Natural Gas (MoPNG), in accordance with the resolution made by the Cabinet. The establishment of Indian Strategic Petroleum Reserves Limited (ISPRL) was undertaken in accordance with the approval of the Cabinet’s resolution. In the current government budget for 2017–2018, the Finance Minister Arun Jaitley has announced the establishment of two more Strategic Petroleum Reserves (SPRs) in Chandikhole, located in the Jajpur district of Odisha, and Bikaner, situated in Rajasthan. The future will reveal whether the capacity will indeed be enhanced to 15.33 million tonnes. India’s status as a net importer of crude oil has been transformed due to its expanding refining capability, resulting in its emergence as a prominent exporter of petro-products from 2001 onwards. According to the BP Statistical Review of 2017, India has experienced a consistent yearly growth rate of 5.06% in its refining capacity, leading it to become the second largest refiner globally, following China. The advancement is seen as a forward-looking measure in the downstream industry. The refining complex has enhanced its level of domestic energy security. Numerous governmental and private enterprises are allocating resources towards the downstream sector, owing to India’s emergence as a pivotal center for petroleum goods inside the international market. According to Ollapally and Mahalingam (2017, p. 68), the IOCL holds the distinction of being the largest state-owned corporation in the downstream sector, exerting control over around 75% of the domestic oil transportation network. The government’s efforts to promote pipelines and decentralize the national

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energy infrastructure in order to boost energy security are evident within this framework. Reliance Industries, a privately owned Indian company, established India’s inaugural privately owned refinery in 1999 and has since achieved a significant market presence within the country’s oil sector. However, it is important to note that the downstream industry in India continues to be mostly controlled by state-owned firms, despite some growth in the private sector’s involvement. India is now engaged in efforts to facilitate the provision of gas from Bangladesh to the North Indian markets. Additionally, India has considered the possibility of establishing a pipeline from Myanmar to India through Bangladesh. However, the implementation of these initiatives has been hindered by prevailing regional geopolitical dynamics. Nevertheless, Bangladesh has withdrawn its objection to a gas pipeline between India and Myanmar that traverses its land, so facilitating the creation of a regional gas network capable of satisfying India’s increasing energy requirements (Ahmed, 2009, p. 142; Bhaskar, 2010). In April 2018, an agreement was reached between India and Bangladesh to construct a 130 km cross-border gas pipeline. This agreement was formalized through the signing of a Memorandum of Understanding (MoU) by both countries. India has committed to providing financial support for this project, amounting to $47.56 million. India’s decision to undertake these projects is regarded as a forward-looking measure. However, the response from both administrations has been characterized by passivity (PLATTS, 2018). Nevertheless, India has been endeavoring to achieve the same objective for a considerable period of time through the execution of numerous agreements and Memoranda of Understanding (MoUs). India’s domestic political dynamics and its ineffective approach towards neighboring countries have consistently hindered its progress in the downstream industry. Aligned with India’s Act-East Policy, the government, in collaboration with all relevant parties, introduced the Hydrocarbon Vision-2030 for North-East India on February 9, 2016. This strategic initiative outlines a projected investment of Rs. 1,30,000 Crore in the upstream, midstream, and downstream sectors within the North-East region of India. In order to stimulate and promote exploration and production activities in the North-East region, private enterprises operating in the area have been granted a 40% subsidy on gas operations. The Indian government has formulated a strategic plan to achieve a twofold increase in the production of oil and gas by the year 2030. The achievement of this objective

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would involve the promotion of collaboration with neighboring nations to facilitate the acquisition of clean fuels, as well as the development of the North-East area as a prominent center for hydrocarbon resources, thereby fostering economic growth in India and creating employment prospects. The foundation of this framework comprises five key pillars, sometimes referred to as the “Five Ps”: People, Partnership, Policy, Projects, and Production. The vision focuses on the growth of the Bongaigaon, Guwahati, and Numaligarh refineries, as well as the development of a network of natural gas and LPG pipes in the region. Additionally, it wants to establish connections between these pipelines and neighboring countries like as Bangladesh and Myanmar. Subsidization and Pricing Issue—A Political-Bluff Energy has a crucial role in shaping economic interactions within society. The discourse on energy security encompasses various factors, such as the availability of electricity at affordable rates, government subsidies, and the intersection between the energy market and social dynamics (Pant, 2015, p. 3). A substantial discourse has emerged about the issue of energy subsidies and pricing. The sector in India has received significant subsidies due to its political influence and obligations. The study done by TERI and The International Institute for Sustainable Development’s Global Subsidies Initiative (IISD) reveals that the provision of subsidies for energy fuels can potentially incentivize higher levels of consumption while simultaneously discouraging investments in more environmentally friendly energy sources. According to a research published by the International Energy Agency (IEA) in 2010, the implementation of a gradual reduction in subsidies for domestic fossil fuels from 2011 to 2020 resulted in a notable decrease of 5.8% in worldwide carbon dioxide emissions when compared to previous levels. The researcher contemplates that the prevalence of excessive subsidies can be attributed to inefficient government practices, which political parties have employed as a means of political manipulation to attract constituents, rather than prioritizing efficient utilization of resources. Subsidies and cross-subsidies within the energy industry have been seen to potentially facilitate diversion, misuse, and malpractice. One illustrative instance involves the utilization of subsidized kerosene for the purpose of adulterating transportation fuels, so conflicting with the considerable investments made by refiners to enhance the quality of

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those fuels. Furthermore, it is crucial to address the pressing issues of utilizing subsidized LPG cylinders exclusively for household purposes due to the significant disparity in pricing between domestic and commercial LPG. Additionally, the wasteful consumption of complimentary electricity within the agricultural sector requires immediate attention (IISD, 2012). Nevertheless, it is imperative to exercise caution while considering measures pertaining to subsidies. Undoubtedly, the absence of subsidies renders any government incapable of sustaining profitability. Developed nations allocate significant subsidies to their agricultural sector. However, the provision of free power supply results in excessive consumption (Johl, 2014), necessitating the implementation of stringent measures to ensure the appropriate utilization of subsidies. In essence, the provision of subsidies for fuels can have influence on energy consumption patterns and stimulate consumer demands. The Indian government implemented deregulation of petrol and diesel prices in June 2010 and October 2014, respectively, with the intention of safeguarding the PDS Kerosene and local LPG sectors from the influence of elevated global prices. The government responded to the fluctuating worldwide fuel prices and the global financial crisis of 2008 by implementing a partial deregulation of petrol prices, maintaining some degree of control. From April 1998 to March 2002, the initial measure taken was the dismantling of the Administered Pricing Mechanism (APM). In India, the presence of inappropriate pricing systems has resulted in price distortion, hence causing certain fuels to be overpriced. The primary means through which the government generates money is through the imposition of excise duties on petroleum products, however it is important to note that these duties are not uniformly applied across all products within this category. The imposition of differential state taxes and custom charges on crude and petroleum products presents further issues in the pricing of energy within this sector (Bhaskar, 2013, pp. 165–166). The incongruity in the pricing of liquefied petroleum gas (LPG), petrol, and diesel is a significant challenge for oil firms, resulting in diversion and adulteration practices. The prices of petrol are in accordance with the global market price; however, the prices of diesel are now at least 20% lower than the level required for complete alignment. In a similar vein, the prices of kerosene and LPG experience a significant reduction of 70% and 50%, respectively, leading to notable pricing distortions. The most part

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of LPG subsidies benefits go into the pockets of the untargeted people.4 Thus, uncertainties in subsidization and prices in the energy sector have increased the policy risk to Indian energy sector. According to the International Energy Agency (IEA, 2015), the perception of prices is mostly influenced by domestic prices in India, although it is vital to consider the impact of national policy on these views. Nevertheless, the pricing of domestic crude oil products, with the exception of LPG and kerosene, is interconnected with global prices. The cost of kerosene and LPG is determined by the international market price, indicating that policy interventions may impact the pricing of these commodities with the aim of substituting them with direct payments to specific disadvantaged populations. The domestic price level for natural gas is determined by calculating the weighted average of the prices of imported liquefied natural gas (LNG) and the estimated price paid to domestic producers. During the fiscal year of October 2014, a novel formula was devised to achieve a progressive upward trend in value. The methodology in question is associated with an international prices basket, which incorporates a weighted average of various worldwide energy prices. These prices include the UK National Balancing Point, the US Henry Hub, and the Russian domestic gas price. It is widely assumed that the aforementioned modification has been implemented with the intention of significantly enhancing domestic production, thereby lowering reliance on imports. The process of restructuring primary energy prices has been characterized by uncertainty and political motivations, as it directly impacts the public perception and approval of a government within a given country. The exertion of control over fuel prices has had a significant impact on both the fiscal equilibrium of the economy and the operations of upstream and downstream oil marketing corporations (OMCs). The net profit of GAIL, a state-owned gas utility, has decreased by 38% due to increased fuel subsidies provided by the government and under-recoveries. Similarly, IOCL, BPCL, and HPCL have seen a net loss of almost 50%. The aforementioned circumstances led to a hindrance in the overall progress of the energy sector, necessitating the implementation of several reforms by the government in recent years (Agarwal & Soni, 2013; The Financial Express, 2012). In the realm of politics, fuel price mechanisms have 4 “Energy Pricing in India” Indian Energy Sector. Accessed on 21 December 2013. http://www.indianenergysector.com/overview/energy-pricing-in-india.

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consistently been susceptible to fluctuations in worldwide prices, as well as influenced by political considerations, especially during periods of general elections. This often hinders the implementation of new pricing changes. Political parties in power or opposition strategically make decisions in order to gain political advantage. Hence, their position lacks steadfastness in establishing stable procedures for fuel price, owing to their political reputation. According to Mehta (2016), politicians exhibit a notable level of concern when confronted with the task of imposing the cost of fuel prices on consumers. These circumstances present a scenario in which the government has eliminated the pricing system to attract private investment. In the event that oil and gas prices exceed the government’s acceptable range, what would be the outcome? Could it maybe return to the previous state of an administrative pricing system? Managing the political apprehensions and imperatives would provide a considerable challenge. The reforms implemented involve the complete liberalization of fuel, eliminating subsidies, and removing government authority over diesel price regulation. Unsubsidized kerosene is devoid of governmentimposed price controls, hence enabling its availability in the open market to fulfill consumption requirements. However, there are both advantages and disadvantages to this situation. On the positive side, the Oil Marketing Companies (OMCs) are now capable of effectively managing their financial resources, reducing their reliance on government subsidies provided as compensation for their losses. The last issue is to the subsidized Public Distribution System (PDS) kerosene, for which individuals are still burdened with the financial loss and the need to await recovery for Liquefied Petroleum Gas (LPG) subsidies. Consequently, this position compels people into a state of indebtedness and increases the likelihood of illicit diversion. The observed phenomenon entails that pricing and subsidization changes align with the rationale of augmenting energy production through the attraction of further investments. Nevertheless, the evaluation of energy generation should not be limited solely to its cost. The comprehensive investment framework also necessitates the proper implementation of reforms in the government’s fiscal regime pertaining to hydrocarbon exploration activities and the taxation system.

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Governmental Consumer-oriented Initiatives The current administration has implemented several proactive measures aimed at enhancing the efficiency of the subsidy distribution system. The Pradhan Mantri Ujjwala Yojana (PMUY) was initiated on May 1, 2016, by Prime Minister Modi with the objective of granting liquefied petroleum gas (LPG) connections to five crore (50 million) women from families classified as Below Poverty Line (BPL) within a three-year timeframe commencing from the fiscal year 2016–2017. As of January 3, 2017, about 1.54 Crore (equivalent to more than fifteen million) additional LPG connections have been provided to Below Poverty Line (BPL) homes through this program. The predetermined goal of 1.5 Crore (fifteen million) for the present year has already been successfully attained. As of March 2018, the number has reached over 4.4 Crore (44 million). Additionally, the government has implemented the “Give It Up” campaign in order to incentivize residential LPG consumers who possess the financial means to pay the non-subsidized price for LPG, to willingly relinquish their LPG subsidy. As of January 3, 2017, a total of 10.5 million customers have voluntarily relinquished their LPG subsidy. Furthermore, the Ministry of Finance has notified that for the financial year 2016–2017, consumers can get cash subsidies ranging from Rs. 0 to Rs. 15 per kilogram through the fund flow mechanism for the Direct Benefit Transfer for LPG (DBTL) program. The subsidy provided to consumers for subsidized domestic LPG, which was implemented on December 1, 2016, amounts to Rs. 151.29 per cylinder. According to the Ministry of Petroleum and Natural Gas (2017), National Oil Companies (both upstream and downstream) will not experience any burden of under-recovery in the fiscal year 2016–2017 due to the sale of Public Distribution System (PDS) Kerosene. Several studies, such as the International Energy Agency (IEA), National Sample Survey Office (NSSO), and the Economic Survey (2016–2017), have provided evidence suggesting that a significant proportion of the Indian population faces constraints in accessing cooking gas (LPG). This limitation is primarily observed in urban and semiurban regions, which are predominantly inhabited by middle to affluent class households. There is evidence to suggest that the use of filthy cooking fuels has been linked to health concerns, including deforestation. According to a research published by the World Health Organization (WHO), the utilization of filthy cooking methods in India has led to

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a significant number of fatalities, amounting to approximately 500,000 deaths. These fatalities primarily consist of premature deaths attributed to heart disease, respiratory ailments, and lung cancer. Females and minors are disproportionately vulnerable to biomass exposure. Indoor air pollution, exemplified by the presence of open fires in kitchens, can be attributed to a level of harmfulness comparable to that of burning four hundred cigarettes within a span of one hour. Approximately 82% of pregnant women residing in rural areas of India are exposed to an increasing hazard of low birth weight as a consequence of pollution associated with biomass usage. India faces significant challenges that must be addressed, while notable progress has been made in addressing these issues. The current administration is making efforts to provide widespread availability of LPG cooking gas throughout the nation by facilitating gas connections for homes classified as Below Poverty Line (BPL). This policy is anticipated to enhance the agency and safeguard the well-being of women. Additionally, the implementation of this initiative would generate employment opportunities for young individuals residing in rural areas through their involvement in the various stages of the cooking gas supply chain. Despite the considerable attention given to India’s rise as a prominent global economy, it is worth noting that the aforementioned analysis indicates a continued need on firewood and crop leftovers for domestic cooking (Haub, 2012). Based on data from the 2011 Census, it is evident that approximately 58% of families, encompassing both rural and urban areas, have relied on firewood and agricultural leftovers as their primary sources of fuel for cooking. This figure represents a notable decrease from the corresponding statistic of 72% recorded in 2001. The utilization of LPG/Natural Gas as a clean energy source holds significant importance within the energy portfolio of India. The percentage remains below 30% as of 2011, which is an increase from 19% in 2001. It is imperative to acknowledge the significant disparity in energy consumption habits between rural and urban households. According to the data from the 2011 census, it was found that 54% of rural families utilized firewood for cooking purposes, whereas urban households had a far lower percentage of 18.6%. Therefore, the circumstances have remained mostly unchanged, with only a slight decrease observed in their proportion. This statement emphasizes the necessity of implementing immediate measures to enhance the availability of energy resources to impoverished communities, thereby contributing to the betterment of

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women and children’s well-being and fostering employment opportunities for the younger generation. However, Indian government took many consumer-centric initiatives in this direction such as PMUY,5 Pratyaksh Hastantrit Labh (PAHAL),6 and “Give It Up.”7 If India achieves these targets, it will put more pressure on Indian energy demand basket. For that, Indian policy-makers are silent about its future implications. India has to be more dependent on outward geopolitical commodities—oil and gas. To access these resources would be a major challenge to India’s energy security. India has been progressively diminishing the subsidies provided for oil, gas, and diesel. The subsidies for petrol and diesel have already been eliminated, while the subsidies for LPG gas are currently being gradually reduced. During the fiscal year 2016–2017, the subsidy for LPG experienced a significant decrease, reaching its lowest point in the past ten years at Rs. 108.73. Commencing on May 21, 2022, the government has instituted a targeted subsidy initiative for the beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY). This plan entails the provision of a focused subsidy amounting to Rs. 200 every 14.2 kg cylinder,

5 PMUY has been launched by Indian Prime Minister Shri Narendra Modi on May 1, 2016. It aims to provide LPG connections to Below Poverty (BPL) families with a support of Rs. 1600/connection in the next three years for ensuring the women empowerment as connection will be issued on the name women households. The government has allocated Rs. 80 billion towards the achievement of this scheme. The government has set the target of distributing about 50 million LPG connections by 2018–19 and to extend the same up to 80 million by 2020. Therefore, it is likely to generate the employment of around 100,000 and open business opportunities of at least Rs. 100 billion to the India Industry thereby give great boost to the “Make in India” campaign. Additionally, government has other initiative name “Ujjawala Plus Yojana (2017)” for adding more BPL women who were no covered under the PMUY based on the Socio-Economic Caste Census (SECC), 2011. 6 PAHAL-Direct Benefits Transfer for LPG (DBTL) has been introduced in the wake of drastic subsidies reforms. Under this scheme, LPG subsidies to the intended consumers will directly be transferred to their Bank accounts, ensuring to prevent the misuse. As a result, 173.6 million (17.36 Crore) consumer joined this, Rs 40,446 Crore has been transferred to registered consumers and more the Rs 210 billion (21,000 Crore) of subsidy has been saved. 7 “Give It Up” is a part of PAHAL campaign as it addresses the well-off LPG consumers to voluntarily give the subsidy so that needy will be benefitted from the clean energy (Give Back Scheme). Under these initiatives, around 1.06 Crore consumers have given subsidy. As a result, about 69 lakh BPL household have been given new connection under Give Back Scheme (Ministry of Petroleum and Natural Gas, 2017).

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with a maximum limit of 12 refills per year, for the fiscal years 2022–2023 and 2023–2024. The United Progressive Alliance (UPA) government deserves recognition for its efforts to address the economic downturn experienced in 2012–2013, which saw a significant depreciation of the Indian currency. This situation led some scholars and politicians to draw parallels with the crisis of 1989. In response, the UPA government implemented various problem-solving measures to safeguard its political standing amidst the Lok Sabha elections in 2014. The tax reform program was introduced by Finance Minister P. Chidambaram during his tenure from 2012 to 2014. This program aimed to address the issue of fiscal deficit and successfully persuaded the government to implement a gradual reduction in fuel subsidies. A reduction in the subsidy bill enables the allocation of funds towards the construction of infrastructure. Following their assumption of power in May 2014, the current government, led by Prime Minister Narendra Modi and Finance Minister Arun Jaitley, pursued a strategy of subsidy reduction. They claimed entire responsibility for its implementation and, in a characteristic manner, took credit for the successful implementation of the Goods and Services Tax (GST), Aadhaar, and Direct Benefit Transfer of LPG (DBTL) (Sharma, 2017). Following the year 2014, the current administration has persistently reduced the provision of subsidies. Simultaneously, the growth rate of LPG consumers has exceeded the average, mostly attributed to the provision of complimentary connections. Nevertheless, a pertinent query emerges over the ability of economically disadvantaged individuals, who have been provided with complimentary LPG connections, to sustainably meet the escalating expenses associated with this resource. In this context, the government has not furnished any formal report or research to address the aforementioned condition. The need for increased policy attention in the midstream and downstream sectors is evident in order to facilitate the development of oil and gas infrastructure and establish fairness in energy liberalization for marketing purposes, particularly in relation to transnational pipelines. In order to facilitate a seamless domestic supply, it is imperative to embrace price structures that are balanced and regulatory, thereby incentivizing both consumers and producers. The Indian government is also obligated to improve the city gas distribution (CGD) networks and expand the capacity and quantity of liquefied natural gas (LNG) import ports. Hence, the demand for primary commercial energy is experiencing growth and is

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expected to further increase in tandem with economic expansion and the widening of energy accessibility in rural regions. Despite the growth in domestic output, the level of import dependency remains high. Moreover, there is an anticipated increase in reliance on liquefied natural gas (LNG) imports. According to Shenoy (2017, p. 19), it has been determined that there would be a projected increase in energy import dependency from the current rate of 33% to 55% by the year 2040. The increase in commercial energy consumption can be attributed to the expansion of Indian industry, the improvement in living standards, and population growth. The current energy situation in the country is quite favorable; nonetheless, there are ongoing shortfalls in the supply position, which can be attributed to several sources. The aforementioned difficulties necessitate the implementation of an integrated energy plan, which would promote the effective utilization of energy and appropriate distribution of fuel resources.

Indian Energy Policy: A Domestic Perspective The successful implementation of an energy policy in any country is contingent upon several crucial variables, including a flexible and adaptive policy framework, efficient infrastructure, strong political determination, constructive diplomacy, and a favorable economic environment. India’s energy policy is driven by the overall objective of ensuring a reliable and cost-effective energy supply to stimulate economic growth. India has prioritized several dimensions of energy policy, hence granting greater autonomy and accountability to different states. Energy has been accorded significant importance in policy formation since the implementation of the sixth five-year plan (1980–1985) (Hong, 2012). The implementation of five-year plans has consistently exerted significant influence on the growth of the energy sector, as it delineates energy demand projections and identifies critical concerns. The initial eight five-year plans primarily emphasized the enhancement of the public sector. However, starting from the ninth five-year plan (1997–2002), there was a notable shift towards prioritizing the commercialization and privatization of the energy sector (Ahn & Graczyk, 2012, p. 22; Bhaskar, 2013, pp. 13–14). The political system in India is characterized as federal and democratic, with the relationship between the central and state governments playing a crucial role in shaping the energy security system to ensure

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the seamless flow of energy at affordable costs (IEA, 2015). Nevertheless, the central government maintains sole jurisdiction over the inter-state trade of mineral and hydrocarbon resources, in addition to overseeing and regulating the energy taxation framework. In contrast, state governments possess authority over the management of water and natural gas infrastructure, encompassing many aspects such as taxation, mineral rights, and the distribution and sale of power (Dwivedi, 2011, p. 21). In order to address energy concerns, it has become imperative to comprehend the interplay between energy-related institutions and policies. India has implemented a decentralized approach to managing and addressing energy-related matters in order to effectively handle them. In 1992, a single Ministry of Energy was established. In order to enhance policy efficiency and promote systematic management and execution of energy-related matters, the Ministry of Energy (MoE) underwent significant organizational restructuring, resulting in the development of five distinct entities: the Ministry of Power, Ministry of Coal, Ministry of Oil and Gas, Ministry of New Energy and Renewable Energy, and the Department of Atomic Energy. The allocation of responsibilities for policy formulation and implementation within the energy sector is distributed across many ministries, as well as several affiliated ministries and organizations. In Fig. 2.3, all institutions relating to energy have been emphasized. The current study pertains to the subject of oil and gas, with a specific emphasis on the Ministry of Petroleum and Natural Gas. The examination primarily centers on the establishment, objectives, and role of this ministry in the formulation of energy policies. The establishment of MoPNG occurred in 1992. The objective of the ministry is to facilitate the commercialization and marketing of activities pertaining to oil and natural gas. The aforementioned activities encompass the import and export of oil and gas, domestic exploration and production, as well as the refining and distribution of oil and gas products. The ministry has also assumed responsibility for the creation of energy policies and the oversight of acquisitions of foreign energy assets. The primary policy topics primarily encompass the development of the New Exploration Licensing Policy (NELP) in 1997, the provision of geological data, the Coal Bed Methane (CBM) policy in 1997, the Discovered Small Field (DSF) Policy in 2015, which subsequently led to the implementation of the Hydrocarbon Exploration and Licensing Policy (HELP) in 2016,

Fig. 2.3 Indian Institutional Mechanisms to Deal with Energy Policy (Notes PSU = Public sector undertaking (stateowned enterprise). Other ministries with responsibilities relevant to the energy sector include the Ministry of Urban Development, Ministry of Water Resources, Ministry of Agriculture, Ministry of Finance, and the Department of Science and Technology. Source International Energy Agency [IEA], 2023)

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and the National Energy Policy (NEP) in 2017, among others. In addition to this, the ministry has been implementing significant institutional procedures to facilitate the efficient operation and coordination of both domestic and foreign energy programs. The Directorate General of Hydrocarbons (DGH) was formed by the Government of India in 1993 and placed under the administrative jurisdiction of the Ministry of Petroleum and Natural Gas (MoPNG). The primary objective of this initiative is to facilitate the development of the upstream sector through effective management of oil and natural gas resources, while simultaneously implementing measures that strike a balance between environmental preservation, technological advancements, and economic considerations. To a certain extent, it has undertaken several obligations, including the execution of the New Exploration Licensing Policy (NELP) and other exploration and production (E&P) associated endeavors. The Integrated Energy Policy (2006) proposed the establishment of an autonomous organization for the Directorate General of Hydrocarbons (DGH). However, the DGH continues to operate under the jurisdiction of the relevant ministry. However, the National Energy Policy (2017) has proposed the separation of the regulatory framework and contract administration in order to encourage exploratory activities. It should be noted that this proposal has not yet been finalized. In order to enhance the downstream sector of the oil and gas industry, the Ministry of Petroleum and Natural Gas (MoPNG) has implemented a regulatory framework and formed the Petroleum and Natural Gas Regulatory Board (PNGRB) in 2007. This initiative aims to promote and enforce regulations across the whole oil and gas sector. The regulatory body has been overseeing significant operations within the downstream sector, encompassing activities such as refining, processing, storage, distribution, transportation, marketing, and the sale of petroleum, petroleum products, and natural gas. The court serves as a mechanism for settling disputes and ensuring legal clarity for investors. It is noteworthy to acknowledge that the board only focuses on the resolution of disputes and other matters pertaining to energy, as previously said. However, the responsibility for establishing refinery facilities and determining marketing pricing remains under the jurisdiction of the Ministry of Petroleum and Natural Gas (MoPNG). The responsibility of reviewing energy data and creating future predictions is with the Planning Commission, presently known as NITI Aayog, as a subsidiary of the Ministry of Petroleum and Natural Gas (MoPNG)

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(NITI Aayog, 2015). Energy-related data is gathered from various energy facilities, which is then utilized to inform the development of energy policies. Nonetheless, a significant obstacle in this regard is the substantial disparity among the data from various institutions, resulting in inconsistent and uncoordinated strategies (Hong, 2012, p. 72). The potential for fragmented decision-making is relevant on a national scale due to the absence of a singular governing entity responsible for devising and executing a cohesive energy policy. The maintenance of the institutional framework necessitates ongoing endeavors, which may not always yield favorable outcomes, in order to attain coordination and effectively address conflicts. India’s lack of coherent and integrated policies has resulted in a failure to establish clear strategies for energy security and supply. Policy Perspectives and Visions The Ministry of Petroleum and Natural Gas (MoPNG) has formulated India’s Hydrocarbon Vision 2025 (2000) with the aim of providing a comprehensive framework to govern the hydrocarbon sector’s policies throughout the course of the subsequent 25 years. The primary objective of the vision is to achieve energy security and self-sufficiency through the augmentation of domestic oil production and foreign investment. This entails fostering the energy sector as a globally competitive industry, promoting the utilization of alternative fuels, facilitating the interchangeability of technology, enhancing marketing and refining practices, implementing appropriate pricing and tariff mechanisms, and undertaking restructuring and disinvestment measures (Ahmed, 2009, p. 138). Therefore, the government’s efforts concerning energy security are guided by its goal, which has resulted in an increase in domestic output. As of the year 2017, the Directorate General of Hydrocarbons (DGH) has granted a total of 254 oil and gas blocks, out of the 360 blocks that were made available through various New Exploration Licensing Policy (NELP) rounds. A total of 156 blocks have been voluntarily surrendered by operators of both privately owned and state-owned firms, citing commercial impracticality and insufficient geological data as the primary reasons for relinquishment. By 2017, the Directorate General of Hydrocarbons (DGH) had successfully conducted an appraisal of 52% of the whole sedimentary basin in India. A significant portion of both deepwater and onland basins, specifically 47% and 64%, respectively, remain unexplored or have not undergone appraisal. Nevertheless, the current

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evaluation falls short of the projected assessment outlined in the Hydrocarbon Vision 2025. The original concept was to achieve a 50% appraisal of sedimentary basins by 2010, a 75% appraisal by 2015, and anticipated full achievement by 2025. It has been said that India has been unable to garner the trust of investors in order to attain its ambitious objectives. The Rangarajan Committees were established in 2006 and 2012 with the objective of investigating methods for generating government revenue. Within the context provided, the committee proposed the implementation of Revenue Sharing Contracts (RSCs). On the contrary, the Kelkar Committee (2014) has proposed the use of Public Sharing Contracts (PSCs) in the NELP-X round auction for deep sea exploration, with the aim of incentivizing private investments. According to Mehdudia (2016), the committee has indicated that the use of RSC may not be appropriate for developing nations such as India, mostly due to a lack of trust between the public and private sectors. Notwithstanding this line of reasoning, the paradigm proposed by RSCs has been embraced by the current administration. It is noteworthy to acknowledge that the Deregulatory Petroleum Bill (April 2006) was enacted by the Indian Parliament in accordance with the aforementioned suggestions put out by the Rangarajan Committee. In this context, the government implemented liberalization measures in the Indian petroleum markets, which encompassed the regulation of price and taxation pertaining to petroleum products. According to Rangarajan (2006, p. 15), this policy grants oil corporations the ability to determine retail prices, establish pricing for domestic LPG and Kerosene, and modify tax and custom duty. The formation of this committee has had a significant influence on the forthcoming energy price and taxation policies of the Indian government. The Planning Commission recommended the Integrated Energy Policy (IEP) draft in 2006, which aimed to establish a long-term perspective on energy policy. This draft was intended to provide a roadmap for achieving energy efficiency and ensuring a secure and convenient energy supply in the medium and long term (Bhaskar, 2013, pp. 15–16). In accordance with the aforementioned strategy, a number of initiatives have been implemented in order to enhance energy efficiency within the context of India. In April 2010, the National Mission on Enhanced Energy Efficiency (NMEEE) was approved by the Prime Minister (Kumar, 2013, pp. 56–57). India’s commitment to augment the prominence of nonfossil fuels and clean energy, as expressed in its Intended Nationally Determined Contributions (INDC), might be interpreted as an effort to

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elevate the proportion of natural gas in the commercial energy blend. According to Kar and Vaid (2017, pp. 10–11), it has been claimed that India did not include any mention of natural gas in its Intended Nationally Determined Contributions (INDC) for the 21st Conference of the Parties (COP) Summit held in Paris in December 2015. Nevertheless, this strongly suggests the need to reassess the National Action Plan on Climate Change (NAPCC), which prioritized the utilization of natural gas as a means to alleviate Greenhouse Gas Emissions (GHG). The implementation of the New Exploration Licensing Policy (NELP) in 1997 has also garnered interest from several private and foreign corporations. During the Pre-NELP (New Exploration Licensing Policy) era, a collective of 35 Exploration and Production (E&P) Companies, consisting of 5 Public Sector Undertakings (PSUs), 15 Private Companies, and 15 Foreign Companies, were designated and actively operating. Following the conclusion of nine rounds under the New Exploration Licensing Policy (NELP) regime, the cumulative count of businesses has increased to 117. This includes 58 private entities, 48 foreign corporate operators, and non-operators/consortium partners, as well as 11 public institutions. The prominent private enterprises under question include Reliance Industries Limited (RIL), Essar, and Jubilant. The prominent multinational corporations included British Petroleum, British Gas, Cairn Energy, Santos, ENI, and BHP Billiton. Public Sector Undertakings (PSUs) like as IOCL, GAIL, and BPCL have been operating under the purview of the Ministry of Petroleum and Natural Gas (MoPNG). The subsidiaries, namely Prize Petroleum Company Limited (a subsidiary of HPCL) and Bharat Petro Resources Ltd. (a subsidiary of BPCL), have actively participated in multiple NELP bidding rounds. Consequently, these companies have been successful in securing exploration blocks through these bidding processes. In addition to the national Public Sector Undertaking (PSU), state PSUs such as Gujarat State Petroleum Corporation Ltd (GSPC) have actively engaged in the bidding rounds of the New Exploration Licensing Policy (NELP) to secure exploration blocks (Director General of Hydrocarbons, Ministry of Petroleum & Natural Gas, 2017). Despite achieving only modest success, the National Exploration Licensing Policy (NELP) has failed to attract prominent private foreign energy companies in the exploration and production sector. Singh (2014) has noted that the upstream industry has faced significant challenges in its effective channelization due to weak economic incentives, lengthy bureaucratic processes, and the taxing regime associated with

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numerous rounds of NELP. These impediments have resulted in the marginalization of the sector. In the context of reforms, the Hydrocarbon Exploration and Licensing Policy (HELP) implemented in 2016 represents a significant departure from the previous New Exploration Licensing Policy (NELP). This shift is expected to enhance hydrocarbon output by enabling explorers to bid for specific blocks of their preference after conducting a thorough assessment of the possible fields using the Revenue Sharing Contract (RSC) model. In this arrangement, the government is entitled to a portion of the revenue generated from the exploration either from the outset or once the explorer has recouped their costs. The HELP policy is informed by the concepts of limited government intervention and effective governance, with the aim of facilitating business operations (Ministry of Petroleum & Natural Gas, 2017). However, until now, only a small number of international corporations have demonstrated interest in this matter, which remains to be observed in the future. However, it is important to exercise caution regarding the potential consequences of the policy, as it grants freedom in marketing and pricing, which could potentially result in an increase in energy prices. As a result, there will be a decrease in consumer demand, hence impacting consumption levels. The fertilizer industry would be affected by this development, as gas constitutes a significant proportion of their raw materials. Furthermore, there is a lack of clarity regarding the extent to which oil import dependency would be reduced by the year 2030. The forthcoming results of the HELP policy are still uncertain, given its recent implementation, and can be viewed as a testament to its predecessor, the NELP policy. Despite the implementation of the New Exploration Licensing Policy (NELP) for over a decade, only a small number of prominent international oil companies have demonstrated noteworthy enthusiasm for engaging in exploration and production activities. This lack of interest can be attributed to factors such as governmental meddling and the absence of a stable and transparent framework within the energy sector (Table 2.2). Finally, the current administration’s strong commitment to restructuring the energy industry resulted in the dissolution of the Planning Commission in 2014. Indeed, the commission had solely assumed an advising capacity. In order to enhance the efficacy of reforms in the energy and manufacturing sectors, the NITI Aayog has assumed a more prominent role, with increased authority in making financial decisions. This

Oil and Gas Pricing

Regulatory Burden

Basis of contract Finalization/Fiscal Model Licensing

Objectives Areas of Concern

All conventional and unconventional (shale oil and shale gas) resources of oil and gas Revenue Sharing Contract Model for safeguarding governments A uniform license for all types of conventional/unconventional oil and gas exploration and extraction Reducing governmental/administrative discretion thereby enhancing transparency (minimum government and maximum governance)

HELP (2016)

(continued)

Separate license for different types of hydrocarbons (conventional oil and gas, unconventional shale oil and shale gas) To prevent government revenue loss, companies/investors require to have prior approval of government at various stages. It gives the government more discretion in processing exploration activities Governmental intervention to fix the gas Freedom to sell production in domestic prices, and crude oil price based on speculated market without governmental import parity intervention

Production/Profit Sharing Contract Model

Only oil and gas, while Coal Bed Methane (CBM) is under in CBM Policy (1997)

NELP (1997)

Comparative assessment of NELP and HELP in India

Policy parameters

Table 2.2

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Blocks were to be awarded under open international competitive bidding by the government and therefore exploration was restricted to blocks awarded by the government Onland and Shallow Water—7 years Deepwater & Ultra-deepwater—8 years Standard rates—12.5% to onshore and 10% to onshore areas; 10% to CBM

Acreage Scope

Duration of Exploration

Under open acreage policy, exploration companies to carve out or apply for any block even not under exploration, therefore It enables them to choose the same from the selected area at their convenience Onland and Shallow Water—8 years Deepwater—10 years Low rates for offshore—5% to Deepwater and 2% for Ultra-Deepwater areas; reduction from 10 to 7.5% for Shallow Water areas; 12.5% for onshore oil and 10% for gas

HELP (2016)

Sources NELP (1997) and HELP (2016) Parashar (2011) has provided evidence to support the claim that governmental restrictions have historically played a role in determining market conditions and pricing mechanisms within the oil and gas industry. Furthermore, the absence of a well-defined taxation policy and the negative impressions of investors resulting from inadequate geological data pertaining to extensive hydrocarbon basins have emerged as significant factors impeding the participation of multinational corporations. The presence of an inadequate pipeline infrastructure deterred potential suppliers, as the construction of new domestic and trans-border pipes would result in increased expenses, hence diminishing the profitability of the firm (Anand, 2016). Therefore, it is imperative for India to address these obstacles in the energy industry in order to enhance its competitiveness and profitability.

Royalty

NELP (1997)

(continued)

Policy parameters

Table 2.2

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is facilitated by the inclusion of the Finance Minister as an ex-officio member of the NITI Aayog. Hence, the Finance Ministry and private industry maintain a strict scrutiny over it (Ollapally & Mahalingam, 2017, p. 66). The National Institution for Transforming India (NITI) Aayog has put up a National Energy Policy (NEP) subsequent to a comprehensive examination of two distinct energy scenarios, namely Business as Usual (BAU) and Ambitious. The data illustrates a notable surge in the demand for oil as opposed to the supply of oil, while also envisioning a rise in the proportion of renewable energy sources and environmentally friendly fuels. The New Economic Policy (NEP) is a significant policy implemented in a specific historical context. The reason for referring to it as Part-2/Episode-2 of the IEP is due to the similarity in their overall structure and progression. According to Shenoy (2017, p. 20), a careful examination reveals that the primary aim of the National Energy Policy (NEP) is to attain energy independence. On the contrary, there is a projection to provide universal access to LPG and electricity in order to alleviate rural poverty, but with the potential consequence of heightened reliance on oil and gas resources. Furthermore, there is a lack of transparency from the government regarding the significant increase in energy intensity resulting from the expansion of manufacturing sectors. Therefore, it exhibits suboptimal decision-making capabilities.

An Appraisal India has demonstrated significant advancements in its energy industry; nevertheless, it has been notably gradual in its pace. Despite these advancements, the country continues to face various obstacles, including a complex oil price regime system and the prevalence of illicit or immoral activities that contribute to irregularities in oil and gas development. The center-state ties in India have not been revitalized due to the inadequacies of the country’s federal structure and tax regimes. Consequently, the government experienced a decline in support from various states in the implementation of its objectives. There is an increased emphasis on customizing policies and optimizing resource utilization through the establishment of autonomous regulatory entities that are free from political intervention. The influence of domestic politics on the energy sector has had lasting effects on energy-related institutions and policies, resulting in a persistent underperformance of the industry. The cooperative federalism framework

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in India, which governs the political and economic connections between the central and state governments, gives rise to a lack of confidence that leads to the prolonged approval process for numerous significant projects within the nation. Furthermore, the presence of multi-party politics and an abundance of bureaucracy further complicate the formulation of a comprehensive and cohesive energy policy. The absence of collaboration across several energy ministries further exacerbates the challenges at hand. Rather than formulating a comprehensive strategic approach, they choose a fragmented set of policies that contribute to project delays and inefficiencies, ultimately fostering an environment conducive to corruption. According to Shenoy (2009, p. 10), the provision of subsidies in the oil and gas sector has been identified as a significant contributor to corruption, as it has the potential to create substantial amounts of illicit funds. During his address in the Lok Sabha, Finance Minister Arun Jaitley acknowledged that a significant portion, specifically 42%, of the excise duty levied on petroleum products by the central government is allocated to the respective states. When the national government decreases the price of oil, the portion of the price reduction is afterward absorbed by the state government through the implementation of Value Added Tax (VAT). Consequently, the replication of prices has a significant impact on end-users’ packages, energy efficiency, and the equilibrium between demand and supply. The prevalence of National Oil Companies (NOCs) in the mid/downstream sectors hinders the implementation of the public–private partnership model in the country, thereby restricting competition. Nevertheless, numerous endeavors have been undertaken to address these difficulties; yet, the scarcity of financing sources poses a significant obstacle. India’s energy policy is focused on attaining a well-rounded energy portfolio by integrating a diverse range of energy sources. This includes the utilization of conventional sources like coal, as well as the pursuit of ambitious renewable energy goals, namely achieving 175 GW of renewable energy capacity by 2022 and 450 GW by 2030. Furthermore, alongside the implementation of legislative reforms aimed at attracting private investment, a range of programs have been formed to tackle issues pertaining to energy efficiency, universal access, and affordability. Despite its ambitious nature, the policy faces various barriers, including those related to land acquisition, antiquated grid infrastructure, and the financial instability of power distribution corporations. India’s energy strategy

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is a notable and complex enterprise that requires cooperation across multiple parties to properly tackle its inherent obstacles and exploit its potential prospects. One significant limitation of India’s foreign energy strategy is the insufficient financial support provided to its overseas industries, which hinders their ability to effectively compete with larger enterprises. The government demonstrates an awareness of the necessity to address various prevailing obstacles, including the burgeoning population, poverty alleviation efforts, energy poverty, and political polarization. These factors present significant barriers to implementing immediate and drastic reforms within the nation. While oil and gas currently constitute the primary sources of energy in India, it is imperative to adopt a fundamentally different approach in order to investigate alternative sources and safeguard future energy supply. It is imperative that both national and state governments refrain from repeating errors committed in previous instances.

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CHAPTER 3

India’s Quest for Energy Security in Eurasia: A Conceptual Assessment of Energy Diplomacy

The influence of India’s home policy is pervasive in shaping its foreign energy policy framework. Indian policy-makers and strategists are incorporating the objective of achieving domestic energy security into their foreign policy agenda, as they actively pursue collaborations with nations that sell oil. The Indian government grants authority to domestic enterprises to seek equity oil elsewhere in order to enhance the diversification of energy sources. The increasing pursuit of energy resources has compelled Indian policy-makers to prioritize Eurasian nations abundant in energy reserves as prospective long-term energy allies for the extraction of hydrocarbons such as oil and natural gas. India’s pursuit of energy can be succinctly described as that of a belated participant in the international energy arena, with its rapid economic expansion leading to heightened reliance on imports. India’s limited or underexplored hydrocarbon reserves necessitate the exploration of additional energy sources. This juncture represents the intersection of a nation’s foreign policy and diplomatic endeavors. According to Pant (2015), it is imperative to consider India’s external dimensions of energy interests when promoting it as an attractive location for global investment. According to F. Barkeshli, the President of Vienna Energy Research Group (VERG), significant energy producers and exporters are displaying a strong interest in the Asian market, particularly due to India’s prominent role as a major participant in the oil market. This is attributed to India’s © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3_3

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increasing need for oil and gas. India, although being geographically situated amidst energy-rich regions abundant in hydrocarbons such as Central Asia in the North, the Middle East in the West, and Bangladesh, Indonesia, Malaysia, Myanmar, and Thailand in East Asia, does not possess the same natural endowment of hydrocarbon resources (Wharton, 2006). Consequently, the nation has encountered significant obstacles in its efforts to establish robust economic and energy diplomacy in order to secure equitable access to energy resources from foreign sources. Indian energy diplomacy has been focused on negotiating agreements based on reciprocal acceptance, a concept that was not previously anticipated. To comprehend the performance in this context, it is important to take a broad overview of several significant transactions outlined above. The modification of India’s long-term liquefied natural gas (LNG) import agreement with Qatar in December 2015 holds significance in the context of the current discussion. This is particularly noteworthy as India continues to import LNG at relatively low costs, despite the global increase in energy prices (Dadwal, 2017; PTI, 2016). India has successfully persuaded Qatar to impose penalties on Petronet LNG, which is the largest gas importer in India, for failing to meet the agreed-upon parameters of gas importation (Raghavan, 2015). Following the diplomatic negotiations with Qatar, India also engaged in discussions with Russia and Australia in order to get a reduction in liquefied natural gas (LNG) prices in January 2018 (PTI, 2018). India has recently established a partnership with the Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates (UAE) to acquire a significant portion (65%) of Abu Dhabi’s marketed oil. This agreement, which was finalized in February 2018, involves the storage of the acquired oil at Mangalore’s inaugural strategic reserves (Petroleum Bazaar, 2018). India has demonstrated significant advancements in the global energy industry, with Indian foreign policy and diplomacy playing pivotal roles in this regard. India has established a substantial presence in the energy sectors of Africa, the Middle East, and other global regions through bilateral and multilateral engagements. In light of the evolving dynamics of global energy diplomacy and the increasing influence of China as a prospective rival, India has been actively seeking avenues to secure energy resource supplies in alternative locations. Presently, Eurasia has emerged as a significant component of India’s energy diplomacy. Ahmad (2005), a professor specializing in geopolitics, has identified four external elements pertaining to India’s pursuit of energy equity overseas. The initial step involves

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the procurement of energy assets overseas through the implementation of a dual strategy, which encompasses obtaining equity ownership in established energy fields and securing contracts for exploration and production activities across various regions globally. The second objective is to guarantee the establishment of enduring contracts for the supply of liquefied natural gas (LNG). Additionally, it is imperative to actively explore transnational gas pipeline plans, thereby advancing the objective of fostering connectivity. Furthermore, fostering collaborations with foreign organizations in the downstream sectors, both within and outside of India, should be prioritized. Against this backdrop, the present chapter primarily centers on India’s pursuit of energy resources in Eurasia and the significance of the energy trade potential in India’s energy diplomacy and possible energy trade ties in the twenty-first century. Prior to delving into India’s energy diplomacy in Eurasia, this chapter provides an overview of the theoretical foundations underlying India’s foreign energy strategy towards the area. The text finishes by emphasizing the potential for future collaboration.

Eurasia: The Pivot of Indian Foreign Policy The term “Eurasia” has become well established in the geopolitical discourse. Since the formulation of Mackinder’s “Heartland Theory,” philosophers, historians, nationalists, and communists have engaged in academic, national, political, and ideological debates and discourses, all with the aim of achieving their respective aims and desires. The phenomenon in question has repeatedly surfaced and resurfaced across different historical periods. Brzezinski (1998, p. 41) asserts that the term “Eurasianism” is deeply embedded within the framework of a politicoideological and philosophical system. Within the context of contemporary global and regional dynamics, the author has discerned the five principal geostrategic actors in relation to the five geopolitical pivots on the emerging Eurasian geopolitical landscape. France, Germany, Russia, China, and India are playing a crucial role as the primary geostrategic powers. Azerbaijan, Ukraine, South Korea, Turkey, and Iran are widely recognized as geopolitical pivots due to their strategically significant locations, geographical features that facilitate connectivity between important regional areas, political and cultural affinities with influential actors in the field of geopolitics, and their susceptibility to the actions of such actors.

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As per the Ministry of External Affairs (India), the Eurasian region encompasses Russia, Azerbaijan, Armenia, the Central Asian Republics (CARs), Georgia, and Ukraine. India has established enduring civilizational, geo-cultural, and commerce connections with the Eurasian region by means of merchant diaspora and commercial endeavors. In the contemporary setting, there exists a significant interconnection between India and the Eurasian region, driven by shared integrations and concerns. India possesses a diverse range of interests, including but not limited to energy, trade, and market dynamics. From a security perspective, the regions have been plagued by various challenges, including terrorism, radical fundamentalism, nuclearization, and narco-terrorism. Despite the existence of shared interests and complementary factors, the economic and security cooperation between the two regions has not been effectively established. One of the primary challenges faced by both regions is the deficiency in connectivity. According to Ahmad (2010, p. 145), India has experienced a notable increase in its endeavors to establish connections with the Central Asia Caucasus region. This surge in engagement can be attributed to the aforementioned concerns. The organization has been making efforts to establish communication with Eurasia; nevertheless, it has not yet achieved success in its endeavors. One of the primary obstacles hindering India’s connectedness with the Eurasian region pertains to the growing alliance between China and Pakistan, as well as the limitations imposed by geographical factors. Against this context, India has been endeavoring to engage Iran as a feasible alternative for its regional connectivity through the proposed agreements of the International North–South Transport Corridor (INSTC) and Chabahar Port. Both parties exhibit a multitude of mutual interests in the region, including the revitalization of the historical Silk Road via rail networks, collaboration in energy commerce, and efforts towards national and regional security. Additionally, they share concerns on the challenges posed by terrorism and Islamic extremism. According to Mohanty (2015), Prime Minister Narendra Modi’s recent official visit to Russia and five Central Asian Republics, along with his prior proposal of the 12-point “Connect Central Asia” policy, followed by his visit to Tehran to sign the Chabahar Port deal, can be seen as indications of India’s strategic shift towards the Eurasian region. Therefore, the near and extended neighbors of India continue to be significant elements that shape its foreign policy. This chapter centers on the importance of Eurasia

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for India in the context of its energy diplomacy and examines potential avenues for future collaboration.

India’s Defensive Realism in Eurasian Energy Theatre: A Theoretical Underpinnings Defensive realism, as conceptualized by Kenneth Waltz (1979), is a specific branch of structural realism that places significant emphasis on the role of the state as a central actor and determinant. Within the context of the global anarchical framework, the state exhibits a preoccupation with the preservation of its security, integrity, and authority. In his work published in 1979, Waltz challenges the thesis put forth by offensive realism regarding the state’s pursuit of power maximization as a means to attain security through dominance and hegemony. Waltz argues that such actions disrupt the balance of power, thereby undermining the primary mission of the state, which is to ensure security. Nevertheless, he concedes to a certain degree that the presence of international anarchy can serve as a motivating factor for expansionist actions under specific circumstances, although this is not universally applicable. Posen (1984) and Van Evera (1999) engaged in a scholarly debate on the state’s offensedefense balance posture. They argued that a favorable offensive balancing behavior should be viewed as an exception rather than a preservation of ruling instincts, since it can ultimately lead to self-defeating outcomes. Defensive realism posits that the onset of conflict can be elucidated by structural factors, including geography, the security challenge, and the views and beliefs of political elites. Posen (1984), Snyder (1991), and Van Evera (1999) are among the scholars who have provided support for Waltz’s realism. The authors posited that structural logics provide a satisfactory explanation for a significant portion of state behavior, although they contend that structural realism falls short in accounting for a major portion of this activity. Consequently, the authors propose an alternate theory of foreign policy that suggests big countries engage in non-strategic approaches. Posen (1984) presented an organizational theory that explains the factors influencing changes in state behavior. According to this theory, these changes are attributed to the presence of organizations operating at both regional and international levels. The aforementioned notion is equally applicable to the examination of military doctrine. Nevertheless, Synder (1991) and Van Evera (1999) respectively placed their emphasis

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on domestic regimes and militarism. Therefore, the authors elucidated the functioning of international systems by integrating theories at both the domestic and international levels (Mearsheimer, 2007, p. 83). Defensive realism is a theoretical framework that rests upon several fundamental assumptions. Firstly, it posits that the international system lacks a central authority, resulting in an anarchic environment. Secondly, this anarchic nature of the international system incentivizes states to adopt defensive and cautious policies. Thirdly, the state is regarded as a central actor in global politics, exerting significant influence. Fourthly, states are not inherently inclined towards aggression, as their primary objective is to preserve their position within the system rather than maximizing power. Lastly, the theory suggests that states are more likely to engage in balancing actions rather than bandwagoning behaviors. The aforementioned assumptions are formulated as justifications for the purpose of motivating states to promptly respond to external threats. They serve to function as a counterbalance to the perceptions of these threats (Rose, 1998, p. 149). Within the context of contemporary international relations, there exist diverse perspectives regarding India’s potential as a great power. These viewpoints mostly revolve around the examination of India’s state behavior and its pursuit of further power. How will the security architecture be structured? How will it ensure its validity on a global scale? Will the entity in question exhibit responsible behavior as a stakeholder or display unpredictable conduct within the context of the international system? The Indian foreign energy strategy, derived from a realist perspective within the field of international relations, has exhibited a strong correlation with the theoretical framework of structural realism as proposed by Kenneth Waltz. India has consistently advocated for the principles of balance of power, multi-polarity, distribution of power, and the promotion of its national interests and sovereignty. India’s pursuit of its geo-economic and geopolitical dimensions, and its significant geo-size and abundant resources in the Eurasian region serve as influential factors shaping its state behavior in a cooperative manner. It is seen that India’s energy diplomacy is likely to focus on Eurasia, including the Pacific Rim, in the foreseeable future. This paper posits that as the global community increasingly competes for oil and gas resources, there is likely a significant correlation between India’s energy poverty challenges and its strategic actions in relation to Eurasia. The establishment of strong connections between

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international and domestic policy is vital. In this instance, the academic concurs with the perspective of defensive realist Jervis (1978, p. 187) regarding the concept of a “offense-defense balance,” which posits that defensive strategies tend to offer greater advantages compared to offensive strategies. According to Jervis (1978, p. 168), it is imperative for governments lacking self-sufficiency in natural resources to prioritize securing the required supply, especially during key periods. Against this backdrop, the current thesis posits that India’s engagement with Eurasia is motivated by a desire to establish a balance rather than engaging in direct competition with China. India’s primary concern is to guarantee a stable and reliable energy supply, both in times of peace and during key periods, within the region. Given China’s established regional dominance, sometimes referred to as regional hegemony, it is imperative for India to exercise caution and refrain from engaging in any geopolitical conflicts with the aforementioned nation. Hence, the proposed approach to achieve energy security in the Eurasian region entails fostering collaboration with key regional actors such as Russia and China, while concurrently enhancing relationships with other significant energy stakeholders such as Iran, Turkey, Turkmenistan, Kazakhstan, and Afghanistan. This strategy aims to mitigate the prevailing influence of major powers in the area. The motivation for India to adopt moderate and defensive policies can be attributed to the two geopolitical and geostrategic components of defensive realism, namely the “securitydilemma” and the influence of geography as structural modifiers. The recognition of the security challenge prompts India to adopt securityseeking strategies in order to achieve power-balancing in the Eurasian region. Taking into account the physical settings of Eurasia and India’s own geographic imperatives, it is evident that India has been actively enhancing its relationships with transit countries. India has been actively pursuing an important dimension in Eurasia through its economic foreign policy, which aligns with the realist perspective that states collaborate based on shared development objectives. Afghanistan needs access to Iranian and Indian markets for the procurement of petroleum and many manufactured commodities, utilizing ports situated along the Arabian Sea. Iran and India are poised to offer markets for manufactured goods and petroleum products, respectively, to the Eurasian region. According to Prashad (2013), Pakistan, in its role as a transit country, stands to gain economic development and access to energy resources from both India and Iran.

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The transfer of manufactured products and energy between India and Eurasia holds significant implications for future interdependence. Several scholars, such as Rakhimov (2010) and Contessi (2016), have argued that realists in the Eurasian interior region consider India as a geopolitically compatible market for energy resources. They view India as an alternative state that may help mitigate the security threats posed by major countries in the region. Indian scholars such as Stobdan (1998), Sachdeva (2006), Dwivedi (2006), and Dwivedi (2017) have been engaged in the task of striking a delicate equilibrium between India’s geopolitical and geostrategic concerns in the multifaceted context of Eurasia. This involves navigating the intricacies of bilateral, regional, and great power diplomacy, while simultaneously fostering regional economic integration and cultural diplomacy in the countries of Eurasia. It is well recognized among India’s policy-making elites that China’s increasing naval capabilities and strategic encirclement pose a potential hindrance to India’s ability to exert its moderate and significant influence in the Eurasian region. This situation may potentially prompt New Delhi to adopt more assertive impulses when circumstances permit. Consequently, they are additionally intending to formulate competitive tactics, namely the Chabahar Port, INSTC trade route, and Ashgabat accords, in order to counteract any prospective challenges posed by China and Pakistan.

Eurasia: A Matter of Importance? Eurasia has historically held significant political and economic significance. With its abundant energy resources and its proximity to major energyconsuming nations such as the European Union, China, and India, the region is emerging as a focal point in the evolving dynamics of the global energy landscape, resembling a new iteration of the historical “Great Game.“ Experiencing a deficit of energy resources, India has commenced acknowledging the significance of regions abundant in energy resources. Nevertheless, due to the implementation of the “Look East” Policy, the increasing geostrategic significance of the Indo-Pacific region, and the establishment of robust relations with the United States (a recent entrant in the energy market sector), Eurasia has not been accorded significant priority in the foreign policy of India. Currently, India has recognized the significance of Eurasia from the standpoint of economic and security strategies. Energy has emerged as a valuable asset for fostering political connections with countries in the Eurasian region, given its significant

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role in the economies of these nations. Hence, this study endeavors to acknowledge energy as a fundamental catalyst in the process of expanding India’s diplomatic ties with Eurasian nations. According to Nathan et al., (2013, p. 146), there are four advantages associated with cross-border energy trade. First and foremost, it mitigates the disparities in energy distribution within the region. Additionally, it promotes a seamless business environment for countries engaged in the activities of exporting, importing, and transit. Exporting and transit nations have the potential to produce additional revenue to stimulate their economies, while importing countries such as India have the opportunity to alleviate energy poverty. Furthermore, energy access serves as a means to connect remote communities with urban centers by requiring the building of necessary infrastructure. Furthermore, this initiative contributes to the enhancement of political connections between states engaged in trade and transit, through both bilateral and multilateral means. Moreover, this phenomenon gives rise to spill-over effects that contribute to enhanced economic collaboration throughout the region. In summary, the intricate geopolitical dynamics in the region have emerged as a result of the pursuit of sustainable and cost-effective energy sources by countries with abundant and limited energy resources. According to Denison (2012), this phenomenon results in a transformation of geopolitical rivalries in the area and creates opportunities for trade and transportation. The significance of the Eurasian region for India becomes evident when considering the varying levels of global and regional importance, particularly in light of the rapidly evolving dynamics of the energy market. Enhancing India’s soft power in the region will be beneficial, as supported by the following rationales. India’s Re-orientation Towards Eurasia—Rationales Global Transformations —The current era of globalization has resulted in the emergence of a new international order, accompanied by a notable rise in global energy trade. The occurrence of an event in a certain geographic location might have repercussions that extend to other regions throughout the globe. The transition in the global energy environment is evident via the growing importance of developing powers such as China and India, juxtaposed with the diminishing prominence of Western nations. The economic growth seen by these nations has led to changes in their energy consumption patterns, thus causing an increase in oil and

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gas prices due to inflationary pressures. The beneficiaries of this situation include producers from Russia, Middle Eastern countries, as well as newly established participants. The situation posed a threat to the overall global production and diminished the comparative interests of industrialized nations. The elevated costs of oil and gas can be attributed to the abrupt disturbances and inadequate supply that have stimulated worldwide rivalry for energy resources. China and India have been actively engaging in global efforts to secure energy sources in order to meet their respective energy demands. This development has raised questions regarding the distribution and production of commodities within the geopolitical sphere (Bisley, 2013, pp. 24–25). The recent advancements in pipeline infrastructure and energy trade among emerging energy producers in Eurasia have prompted geopolitical experts to contemplate India as a potential alternative energy market. This consideration aims to establish a balance between the influence of Russia and China in the region. The strong connection between India’s entry into liberalization and globalization in 1991–92 and the demise of the Soviet Union in 1991 can be attributed to their same ideological affinity. The phenomenon of fast globalization has brought about transformations in market standards, prompting several communist nations to consider adopting capitalist views as a potentially viable alternative, albeit not necessarily a superior one (Kapur, 2009). India, a nation that formerly had socialist tendencies and adopted an introspective approach while pursuing Nehruvian ideals regarding its global standing, has now transformed into one of the self-assured emerging powers with a pragmatic outlook. According to Kapur’s (2009) research, the dissolution of the Soviet Union has had significant implications for both the world order and the Indian economy. The Indian economy has undergone a significant transformation, transitioning from a socialist framework that emphasized central planning, a public sector, and five-year plans, to a capitalist system. Similarly, there has been a shift in foreign policy from non-alignment to one that prioritizes shared interests. Additionally, there has been a move away from a public-oriented approach towards a greater emphasis on privatization. These various factors have contributed to India’s rapid economic growth, resulting in its transformation into a country that now imports more oil and gas than it exports.

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India’s track record in terms of energy supply from Eurasia, namely post-Soviet republics, has been subpar because of the unfriendly atmosphere for oil and gas trading. These countries found themselves in a disadvantaged geopolitical position and required a significant amount of time to achieve their current status (Kleveman, 2004). The economic model of the country has been shaped by the implementation of progressive reforms in governmental structures, rules, and laws pertaining to security, tax policies, and bureaucracy, with a particular emphasis on the possession of natural resources (Kundu, 2011). The assertions regarding the pipeline networks that pass through Russian territory have led to strained interstate ties in the region. The attraction of Western countries towards this situation and the exploitation of oil and gas deposits have prompted them to pursue political reforms. Their interest lies in establishing new pipelines and exploiting the energy riches in the Caspian region, with the aim of diminishing Russia’s power. This phenomenon has been referred to as the “New Great Game” by numerous experts (Kleveman, 2004). Over the course of time, the ongoing Ukraine issue and the deteriorating relations between Russia and other countries have compelled Moscow to pursue a strategy of diversifying its energy supply towards the regions of South Asia and Southeast Asia. According to the assertions made by Karaganov, a prominent political scientist from Russia, it is anticipated that Eurasia will emerge as a focal point in the realm of global geopolitics. Furthermore, Karaganov posits that China, India, and Russia are poised to assume more significant roles within this context. The speaker contended that the unipolar global order was terminated subsequent to the 2008 financial crisis, and posited that the reemergence of a bipolar world is highly improbable. Instead, they asserted that a multipolar world is currently flourishing. In the post-Cold War and post-Soviet Union era, the Eurasian region faced significant challenges in terms of its survival and political-economic development. These challenges were exacerbated by civil hostilities and the strategic interests of major powers. The substantial quantity of energy resources and strategically advantageous geographical position of this region have not only played a significant role in its socio-economic progress, but have also elevated its status as a crucial geopolitical and geo-economic entity within the realm of world politics. The region is gifted the estimated proved oil and gas reserves in Caspian and its surrounding area, equivalent to approximately 42 thousand million barrel of oil, contributing around 18% of total world’s proved oil reserves. The

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estimated quantity of proven gas reserves for this entity is 3053 trillion cubic feet, which accounts for little over 46% of the global total of proven gas reserves. The global production output of oil and gas accounts for around 21% and 27%, respectively, as shown in Table 3.1. India saw Eurasia as a favorable prospect to strengthen its standing as a prospective regional security ally. India has the opportunity to closely examine China’s geopolitical strategies in the region, particularly its interactions with the Central Asian Republics (CARs) and Iran in the oil sector. Eurasian nations have expressed a growing inclination to foster strong political and economic ties with India, mostly due to its rapid economic expansion and significant geopolitical standing on the global platform. The individual’s exceptional autonomy can be traced back to their innate sentiments towards the burden of their physical limitations and their limited exposure to formulating geostrategic and security plans while operating in an environment overshadowed by a sense of perceived threat. The abundance of natural resources and the close physical proximity between Asia and Europe have played a significant role in shaping economic and political connections with countries such as India, China, Turkey, and others (Cutler, 2009, pp. 62–63). India’s foreign policy in Table 3.1 Energy profile of major producers in Caspian and Caucasus region Countries

Proved reserves

Share in World’s Total Proved Reserves (%)

Oil Gas

Oil

Russia 15.0 1139.6 6.4 Kazakhstan 3.9 34.0 1.8 Turkmenistan 0.1 617.3 0 Azerbaijan 1.0 40.6 0.4 Uzbekistan 0.1 38.3 0 Iran 21.8 1183.0 9.3

Production

Gas Oil

Gas

Share in Consumption World (%)

Share in World (%)

Oil Gas Oil

Gas

Oil Gas

351.8 12.0 26.6 9.4 46.2 180.7

3.3 11.0 0.3 0.4 0.2 0.8 0.1 0.3 0.1 1.4 1.9 5.6

17.3 554.3 521.5 12.6 16.2 148.0 0.5 79.3 17.9 1.8 0.6 13.2 9.4 12.7 60.1 0.3 1.9 6.7 0.6 41.1 15.7 0.9 0.5 4.6 0.6 2.6 56.5 0.1 1.8 2.8 18.0 216.4 182.2 4.9 5.7 83.8

Source BP Statistical Review of World Energy, 2022. Proved Reserves of Oil in Thousand Million Tonnes. Proved Reserves of Natural Gas in Trillion Cubic Feet (Tcf). Production and Consumption of Oil in Million Tonnes (MT). Production and Consumption of Natural Gas in Million Tonnes Oil Equivalents (Mtoe).

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the region has been influenced by the geo-economic dimension. The disparities in economic development across the various regions have intensified both geopolitical competition and economic competition. Hence, prominent economic powerhouses such as India are forging alliances with neighboring nations in order to safeguard and enhance their economic advantages. Geo-strategy and Geographic Contiguity—The burgeoning relationship between India and the Eurasian Republics is mostly motivated by India’s energy and geostrategic objectives within the region. India’s commitment to achieving these objectives has been put to the test due to the increasing security difficulties originating from the Afghanistan-Pakistan region, commonly referred to as the “arch of turbulence,” especially in the aftermath of the September 11 attacks. The region has garnered significant attention in global discussions. The landlocked country of Afghanistan has played a significant role in influencing India’s geostrategic policy, particularly following the withdrawal of the United States from Afghanistan in 2014. India has consistently demonstrated strong support for Afghanistan’s efforts in enhancing security and facilitating reconstruction endeavors. However, Pakistan has been impeding regional economic cooperation and connectivity in order to advance Indo-US strategic collaboration. The potential repercussions of this scenario involve the jeopardization of India’s role as a security supplier, encompassing political, military, and economic aid extended to Afghanistan and the Central Asian Republics (Bishoyi, 2015, p. 178). According to Kundu (2011), there is an argument that CARs are actively seeking to establish strategic relationships with New Delhi due to their shared concerns on security-related issues. Nevertheless, these countries have yet to cultivate a well-defined strategic culture that is essential for effective security planning, mostly because they have underestimated key security concerns. CARs, or Central Asian Republics, have played a significant role in providing logistical support to the United States throughout Operation Enduring Freedom (OEF), a global anti-terrorism campaign. This assistance has been particularly crucial in the context of Afghanistan, a nation ravaged by war. Following the departure of American military forces, Central Asian Republics (CARs) have expressed significant apprehension regarding their security concerns arising from terrorist activities in the Afghanistan-Pakistan (Af-Pak) region. This unease stems from the increasing associations between CARs-based extremist organizations such as the Islamic Movement of Uzbekistan, the

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United Tajik, and the Hizb-il-Tahir, and terrorist groups operating in Afghanistan and Pakistan (Bishoyi, 2015, p. 178). It is noteworthy that the Trump administration has formally declared its renewed involvement in Afghanistan, with the aim of achieving a decisive victory over terrorism. There is a strong possibility that India might expand its geopolitical influence by strategically reorienting its strategy towards Afghanistan and Central Eurasia. Furthermore, according to Agarwal (2015, p. 96), the inclusion of India as a permanent member in the SCO will enhance its ability to effectively tackle the challenges posed by terrorism, radicalism, and extremism. India has the potential to establish a tight collaboration with the Regional Anti-Terrorist Structure (RATS), a component of the Shanghai Cooperation Organization (SCO), in order to garner regional assistance for the Afghan National Security Forces (ANSF) in their efforts to combat terrorism. Nevertheless, it is worth noting that the prominent regional actors, namely Russia and China, have already commenced a process of intensifying their strategic collaboration with the aim of bolstering security and stability within the Eurasian region. The inclusion of India in the Shanghai Cooperation Organization (SCO) and its existing trilateral relationship with Russia and China, known as the RIC, would enable New Delhi to establish strategic cooperation with Beijing and Moscow. This would further enhance the institutional framework of the RIC (Dongxiao & Shuai, 2016, p. 434). Without a doubt, the establishment of mutual strategic cooperation in the region will contribute to the creation of a secure and stable environment for the flow of energy trade. This is an integral component of India’s Eurasian energy diplomacy. In order to bolster its energy security, India has been compelled to reorient its Eurasian energy policy primarily due to the influence of four key dimensions: global order, geopolitics, geo-economic factors, and geostrategic considerations.

Conceptualizing Eurasia in India’s Energy Diplomacy The prevailing assumption is that Mackinder’s Heartland Theory primarily emphasized strategic orientations rather than theoretical recognition or cognition. During the inter-war periods, the absence of nuclear power and limited advancements in war technologies meant that geopolitical thinkers such as Mackinder and others may have conceived the

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Heartland/Rimland Theory differently or assigned it different strategic implications (Gray, 2004). Subsequently, the deterrence logics emerged as a challenge to these views. The emergence of the strategic deterrence concept, aimed at preserving stability in power dynamics and managing the perception of threats among nations, has been amplified following the advancements in information technology, cyber-space technology, and the proliferation of nuclear warheads. No major global power will willingly engage in a significant armed conflict that has the potential to devastate their society or pose a danger to mankind as a whole. This is because their primary goal is to foster the advancement of their communities in terms of both socio-economic and political aspects. During his address at the Air Force Station Tambaram in Chennai, President Pranab Mukherjee (2012–2017) expressed his belief that India, as a responsible and growing power in a multipolar and multilateral global order, should prioritize the establishment of a robust deterrent capability. Given the dynamic nature of the socio-economic and geopolitical landscape, it is in India’s best interest to adopt a robust deterrence strategy against individuals or entities that impede national security, hinder growth, and undermine prosperity through illicit methods (PTI, 2017). Ermito (2017), a scholar specializing in Asian politics, has conducted a thorough analysis of the significance of Sea Lines of Communication (SLOCs) in the Indian Ocean. These SLOCs have been responsible for facilitating over 60% of global oil and liquefied natural gas (LNG) trade, which transits through crucial international maritime choke points. Notably, these choke points include the Strait of Malacca, the Strait of Hormuz, and the Bab-el Mandeb, which are widely recognized as vital “energy arteries.“ The ultimate result of geopolitical dynamics in the twenty-first century will be shaped by significant influence over energy resources and the establishment of robust transportation networks. Consequently, India has been actively endeavoring to redefine its geostrategic deterrent and maritime navigational priorities, all the while maintaining a commitment to cooperation and the preservation of freedom of navigation within both established and potential transit corridors. In the current context, nations within the Eurasian region are increasingly recognizing the significant potential offered by historical overland trade routes, such as those established during the Silk Road era, as preferable alternatives to maritime routes that are both perilous and timeconsuming. The ambitious project of India, known as the International

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North–South Transport Corridor (INSTC), can be analyzed in relation to the China-led One-Belt-One-Road (OBOR) initiative. The INSTC aspires to establish transit corridors connecting Russia, the Caspian Sea, the Mediterranean Sea, the Indian Ocean, and the Persian Gulf, utilizing countries such as Iran and Turkey. India’s New Silk Route, also known as the International North–South Transport Corridor (INSTC), represents India’s strategic approach to establish connections with the area through a multi-aligned policy. The researcher has conceptualized India’s multi-aligned policy as the “Mari-Land Belt of Corridors,” which holds significant implications for India’s geopolitical positioning and economic prospects in Eurasia. This assessment takes into account the various sea-land links facilitated by ships, railways, roads, and pipelines, as depicted in Map 3.1. Nevertheless, the focus does not revolve upon the efforts of powerful regional actors to maximize their dominance inside the region. The objective is to strengthen regional cooperation and alignment through the cultivation of a moderate deterrence capability. This approach is warranted in situations where one’s immediate neighbors do not exhibit amicable sentiments, necessitating the exploration of alternative avenues. The strategic approach of the Indian government involves countering China’s OBOR (One Belt One Road) initiative, particularly in relation to neighboring countries, in order to establish a balancing effect for India. This is achieved by the development of a network of corridors that parallel China’s Maritime Silk Route. The term “Mari” is derived from the Latin word “Mare,” which refers to the concept of the sea. The term “Land” is hyphenated, representing a combination of national territory and integrity, with a focus on coastal areas. This hyphenation originates from the Old English word “Lond.“ The hyphen symbol (-) signifies the interconnection between the sea and land, as it is imperative to consider multiple paradigms rather than relying solely on one. The statement in question suggests that if a state lacks direct physical connectivity to a significant region through established transit corridors, it should consider utilizing alternative routes. The concept of Rimland necessitated the consolidation and unification of states in order to secure their survival during World War II. Nevertheless, Spykman failed to take into account the potential future regional wars, such as the competition between India and Pakistan. Within the context provided, the researcher has proposed the concept of the “Mari-Land Belt

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Map 3.1 India’s corridor approach towards Eurasia for energy security and trade cooperation (Source ArcGIS Lab, Central University of Punjab, Bathinda, 2022)

of Corridors,” which might potentially serve as an extension or augmentation of Spykman’s Rimland Concept. In the context of globalization and capitalism, the implementation of the Mari-Land Belt of Corridors concept would play a crucial role in fostering a multi-aligned approach to regional cooperation. The consolidation of Asian powers would lend substance to the statement that the twenty-first century is indeed the Asian Century. The inclusion of Map 3.1 would enhance the clarity of the aforementioned proposal as originally conceived. The primary objective of Indian energy diplomacy is to foster collaboration with countries that possess significant geopolitical and geoeconomic importance, while also reinforcing long-standing partnerships with energy centers such as Eurasian nations. The statement made by Indian Prime Minister Narendra Modi during his visit to Iran in May 2016 emphasizes the principles of trust, cooperation, and inclusivity as

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India’s approach to international relations. This statement reflects India’s intention to adopt a more proactive and strategic stance, while also seeking to establish economic cooperation with other nations (Iyengar, 2016). The objective of the researcher is not necessarily to present a geopolitical perspective for major countries to perceive the Eurasia region differently, as Mackinder and Spykman did. Instead, the researcher aims to modestly propose their own perspective on India’s diplomatic approach in the energy-rich Eurasia region as the most appropriate one, albeit in an intuitive fashion. It is the perspective of researchers to consider the perspectives of both Indian political elites and Eurasian political elites within the physical geographical context in order to influence the character of geopolitical reverberations towards convergent outcomes. It is imperative to acknowledge the socio-economic and geographic factors that influence the geopolitical and strategic actions of individuals. These factors have historically been subject to exploitation by Western orientalism, a worldview that perpetuated biased notions of European superiority over the Eastern world. Consequently, this ideology has exerted significant influence over the mindset of political elites and influential figures in Asia. The Indian political elites should prioritize the exploration of Eurasian energy resources as a significant geopolitical factor that has the potential to enhance energy diversification and foster stronger political and economic ties throughout the region. The current discourse necessitates an examination of how geographies and historical traditions continually evolve in meaning, adapting to changing circumstances at varying rates and within distinct timeframes, as noted by Kirk (1990): Each individual, generation, and government develops its own peculiar view of the world as a result of geographical location and historical tradition………., which have exercised great influence upon strategic thinking and political behaviour over long periods. Sometimes it has been a map constructed on a particular projection that has served generation of statesmen as the basis of political and military planning. Sometimes, become a compelling theory of spatial relationships and historical causation shaping the viewpoint/action of political leaders. (cited in Campbell, 1990, p. 52)

In his study, Hong (2012, p. 61) sought to demonstrate the Indian government’s utilization of cooperative agreements as a means

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of directing energy diplomacy, wherein various forms of financial and humanitarian assistance are provided. The Export–Import Bank of India (EXIM) has provided lines of credit to multiple projects in countries where Indian National Oil Companies (NOCs) are involved and have a vested interest. These countries include Kazakhstan, Russia, Turkmenistan, Iran, Myanmar, Angola, Nigeria, Syria, Chad, Brazil, Trinidad, Cote d’Ivoire, Gabon, and Vietnam, among others. India’s recent endeavors demonstrate its diplomatic impartiality, as it has been actively boosting its commerce, transit connectivity, and foreign investments beyond its immediate neighboring countries. India has been strategically adjusting its energy strategy to encourage major energy companies in Eurasia to collaborate and overcome connectivity obstacles in order to advance infrastructure development. This reorientation involves fostering cooperation and pursuing several alignments. Understanding of India’s Eurasian Policy Through Paradigmatic Model It is noteworthy to highlight that India has maintained a strong relationship with the Soviet Union, notably in the context of enhancing military capabilities. However, in the period following the dissolution of the Soviet Union, there emerged a reevaluation of the spatial framework established by the Soviet regime, giving rise to novel geographical perspectives. These newly formed political entities have constructed their regimes based on their respective historical traditions. Russia has initiated efforts to regain control over these entities in order to preserve its influence, particularly in the domain of oil and gas delivery. Western powers, including the United States, have engaged in geopolitical interventions aimed at modifying the pipeline landscape, which is now under the dominance of Russia, inside the region. These operations are justified under the guise of advancing democratic ideals. China has made notable advancements in the region by actively engaging in the sharing of common security issues and displaying a vested interest in energy resources. Within the current geopolitical landscape, it is evident that India’s Eurasian strategy has experienced a significant transition that warrants examination through several conceptual frameworks.

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1990s: Paradigm of Self-reliance and Re-adjustments During the decades after the Cold War, the relationship between India and Soviet-Russia underwent a significant transformation, resulting in the emergence of novel geopolitical dynamics. The geopolitical landscape of the Eurasian region saw significant changes as a result of the dissolution of the Soviet Union. This transformation was primarily driven by the limited administrative capabilities of Eurasian countries in effectively addressing emerging security and strategic problems, as well as the difficulties they had in navigating the economic conditions that arose from their newfound independence. The post-Soviet republics embarked on the process of nation-building and actively pursued efforts to consolidate their regional integration and establish their statehoods (Gupta, 2013). Simultaneously, India encountered a deficit in its balance of payments and opted to implement substantial economic reforms in order to foster integration within the global markets. Given the prevailing geopolitical and geo-economic transformations, India’s focus in the region was rather limited. Significant shifts in its methodology, specifically transitioning from idealism to realism or pragmatism, have occurred in order to get alternative viewpoints on the global landscape. The internal political challenges posed by the Indo-Pak conflicts in Kashmir, as well as the unfavorable socio-economic and strategic conditions in the post-Soviet zone, have deterred Indian political leaders and investors from actively engaging in the region. However, the leadership in Central Asia exhibited a favorable disposition towards India. The assertion made by Puri (1997, p. 242) supports the notion that India served as the initial destination for numerous Central Asian leaders. As a result, India could not overlook the favorable gestures made by the countries in the Eurasian region. Once more, the nations of India and Russia have begun to align their interests in relation to matters of security, stability, and the possible influence exerted by China and Pakistan within the area (Singh, 1995, p. 78). Against this historical context, it is noteworthy to mention that the former Indian Prime Minister, Narasimha Rao, undertook a series of official visits to Kazakhstan and Uzbekistan in May 1993, followed by visits to Kyrgyzstan and Turkmenistan in September 1995. During his diplomatic mission to Turkmenistan, he created the “Look North Policy.” The policy has been regarded as a pragmatic strategy towards

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Eurasia, which is commonly referred to as the “near abroad” (Campbell, 2013). Nevertheless, the policy in question did not address the matter of energy. According to Kavalski (2010, p. 239), the “Look North” program was not regarded favorably, but rather used as a conceptual framework for understanding Indo-Eurasian interactions. Within the framework of this policy, he formulated the idea of replicating the rationale and accomplishments of the “Look East” policy in relation to Southeast Asia. Throughout the past decade, the leaderships of the Central Asian Republics (CARs), including Russia, have maintained communication through reciprocal visits, rather than actively pursuing significant advancements in regional integration. The emerging geopolitical circumstances have compelled both parties to pursue structural and economic advancement while recalibrating their regional and global relationships. 2000–10: Paradigm of Strategic Realization and Re-alignments Since the year 2000, the global community has directed significant focus towards the Af-Pak area as a result of the emergence of terrorism following the 9/11 incident. The region’s close geographical proximity to India has facilitated the development of strategic connections between India and the United States, particularly in the context of security concerns. These concerns include the terrorist assaults on the Indian Embassy in Kabul, other Indian cities, and the significant Mumbai terror attack that occurred on November 26, 2008 (Sharma, 2012). The United States’ involvement in the region, driven by its agenda to promote democracy (despite its controversial nature), and the subsequent occurrence of “colored revolutions” in Georgia (known as the “Rose Revolution” in 2003), Ukraine (known as the “Orange Revolution” in 2004), and Kyrgyzstan (known as the “Tulip Revolution” in 2005), have influenced India’s diplomatic perceptions regarding the strategic proximity and alignment of Russia, China, and Pakistan as key state actors in the region (Haring & Cecire, 2013). According to Weitz (2008, p. 37), a strategic analyst at the Center for Political-Military Analysis in the Hudson Institute, it has been observed that Russia has acknowledged China’s economic dominance in the Caspian hydrocarbon sector, as well as its control over the development of pipelines and infrastructure in the region. Additionally, Beijing has also acknowledged Russia’s

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sphere of influence in terms of military and security matters in the region, considering the presence of extremist and separatist forces. India was cognizant of the potential ramifications of Sino-Russia geoeconomic and strategic convergence, which may potentially lead to its isolation in the South Asian region. This concern was rooted in the possibility of Pakistan, a long-standing ally of China, gaining an advantage over Indian interests in the area. However, the establishment of the Northern Distribution Network (NDN) by the United States, aimed at increasing its influence in Afghanistan, has had a significant impact on the geopolitical dynamics of Eurasia. This has resulted in a shift in strategic leverage from transit countries like Pakistan, Iran, Russia, and the Caspian countries, who previously held advantageous positions over the United States. Consequently, this has diminished the geopolitical significance of countries such as India (Kuchins & Sanderson, 2009). As a result, India began perceiving itself as a provider of security and a stabilizing force within the region (Agarwal, 2015, p. 97). The region has been acknowledged as a prospective market for fulfilling its energy and security requirements. The military presence of India in Afghanistan and Tajikistan has been substantial in this particular instance. In 2002, a hospital was constructed at the Farkhor Air Base with the purpose of offering technical and health support to the Afghan Northern Alliance (ANA) in their efforts against the Taliban (Ramachandran, 2006). Between the years 2003 and 2010, the Ayni airbase underwent refurbishment with the assistance of US$70 million in funding and technical support. India has demonstrated its expanding strategic aspirations by means of its military capability demonstrations (Campbell, 2013). Furthermore, the region has achieved significant progress through initiatives such as the International North–South Transport Corridor (INSTC) established in 2002, the Chabahar Port Agreement of 2002, and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) trade route program initiated in 2008. These endeavors aim to enhance connection with Eurasia and contribute to the equilibrium of power dynamics in the area. At the Astana Summit in 2005, India and Pakistan were granted observer status in the Shanghai Cooperation Organization (SCO) in order to enhance their participation in the regional security architecture. Subsequently, both parties have joined the SCO Energy Club in order to align their energy goals with those of all SCO members (Wilhelmsen & Flikke, 2011, p. 881). This particular stage revealed their strategic and geopolitical apprehensions towards the region, which were absent in the

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initial paradigm. There is no doubt that India has paid limited attention to Eurasia, but it has still been deeply integrated into India’s strategic and geopolitical maneuvers. During this time, there was a continued focus on the interactions between India and the United States, as well as the strategic ties between India, Afghanistan, and the Central Asian Republics (CARs). In contrast, China and Russia have initiated diplomatic interactions with the Caucasus, Central Asia Republics, and the ASEAN countries through regional and multilateral channels. The aforementioned duality precipitated the departure of United States military forces from Afghanistan and prompted a reassessment of the Indo-Pacific policy. The strategic implications prompted India to transition from a strategic focus to a geopolitical approach, wherein energy emerged as a significant topic of discussion in relation to regional connectivity frameworks. It is important to acknowledge that these equations also allowed for New Delhi to assume a pivotal position in Washington’s “Asia-Pivot” policy, so further complicating its relations with China. Onwards: Paradigm of Geopolitical Developments and Geo-economic Reorientations In contemporary society, the field of geopolitics is intrinsically intertwined with the subject of energy, as the two are inseparable. The Eurasian region, known for its abundance of energy resources, has consistently been a focal point for major global powers over the course of history. However, India has historically not given significant attention to this region due to geographical obstacles, its focus on the advancement of the “Look East policy,” regional concerns related to Pakistan, and domestic strategic dynamics during the initial two paradigms. India’s strategic shift towards the Eurasian region can be attributed to various factors, including geopolitical considerations as well as broader geo-economic and specific energy interests. According to Joshi (2016), the observed changes can be attributed to the evolving geopolitical landscape following the exit of the United States in 2014. The third paradigm has experienced a notable shift in the positions of major powers in the region due to significant geopolitical events. These events include the Ukraine crisis, Western sanctions imposed on Russia, China’s focus on the Eurasian energy market, the lifting of sanctions on Iran, the advancement of China and Pakistan’s strategic axis through projects such as the New Silk Route, CPEC, and Gwadar Port,

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the declining status of the TAPI pipeline project, and Russia’s new orientations towards Pakistan, among others. As a result of these dynamics, India entered into a series of strategic cooperation agreements with Kazakhstan on January 24, 2009, Uzbekistan on May 18, 2011, Afghanistan on October 04, 2011, and Tajikistan on September 03, 2012. China has established itself as the dominant economic force in the region, as evidenced by its implementation of pipeline and Silk Road diplomacy strategies. In contrast, Russia has continued to uphold its longstanding energy monopoly. With the backing of China in response to Western sanctions, Russia made the strategic decision to expand its energy exports to the Eastern markets. The United States’ strategic pivot from Eurasia to the Indo-Pacific region has resulted in a further marginalization of India’s standing within the area. The situation left New Delhi with a sense of relinquishing the energy-abundant region to Beijing entirely. Consequently, the purported disregard for the Eurasian region in previous times has now achieved its pinnacle and has garnered significant attention from the Indian government, owing to recent geopolitical advancements, pipeline diplomacy, and hydrocarbon explorations in the area. Figure 3.1 illustrates the aforementioned advancements. Recognizing the increasing influence of Russia and China in the Eurasian region, the countries within the region have acknowledged India as a viable third option to counterbalance this trend. Central Asian analysts have identified India as an unexplored market that might potentially contribute to lessening their geo-economic dependence on China and Russia. The strained relationship between Russia and the West due to the Ukraine conflict in 2014, as well as the nuclear deal with Iran in 2015, serves as additional evidence supporting the potential for good developments in Indo-Eurasian relations, as stated by Todd (2016). India has been presented with an opportunity to reinstate its diplomatic endeavors in the region by means of its involvement in many regional initiatives, including the Connect Central Asia Policy (CCAP), the International North–South Transport Corridor (INSTC), and the Chabahar Port. This is evident in India’s recent approach. India has effectively leveraged its membership in the Shanghai Cooperation Organisation (SCO), which it obtained in 2017, to strategically bolster the diversification and security of its energy supplies. India has notably cultivated enhanced diplomatic ties with resource-abundant Central Asian countries in the oil and gas sector. The incorporation of India as a constituent of the Shanghai Cooperation Organization (SCO)

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Fig. 3.1 India’s diplomatic orientations towards pragmatic paradigms shifts in Eurasia in different time periods (Source Prepared by the researcher)

offers a strategic mechanism to mitigate and offset China’s prevailing influence inside the said organization. Furthermore, the inclusion of India as a member enhances its regional energy discourse, enabling the exchange of ideas regarding noteworthy initiatives like the TurkmenistanAfghanistan-Pakistan-India (TAPI) pipeline, which have been subject to prolonged deliberation. Moreover, this progress additionally enables prospects for heightened energy collaboration with Russia, a significant constituent of the Shanghai Cooperation Organization (SCO). Furthermore, apart from its core goal of securing access to fossil fuel resources, the SCO platform also provides India with the opportunity to engage in broader discussions around energy security. The aforementioned encompasses deliberations pertaining to the utilization of sustainable energy and the transfer of technological advancements, hence facilitating the

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process of diversifying India’s energy sources. Furthermore, the inclusion of India in the SCO provides India with a strategic advantage in dealing with security issues in the region that have a direct influence on its energy transportation pathways. Therefore, the inclusion of India in the Shanghai Cooperation Organization (SCO) serves as a versatile tool in its energy diplomacy, offering prospects for diversification, cooperation, and geopolitical leverage. The approach adopted by India in navigating the Ukraine war has been characterized as “strategic ambivalence.“ Contrary to the opposite belief, it is evident that this decision made by New Delhi is a conscious and intentional one, albeit with certain limitations. The rationale behind India’s choice to refrain from openly criticizing Russia is not driven by theoretical considerations regarding the preservation of the global order, but rather by deliberate strategic calculations aimed at safeguarding its own security interests (Frayer, 2023). India’s initial stance of public neutrality towards the Russian invasion can be attributed primarily to its apprehensions regarding China and Pakistan. New Delhi perceives both of these states as imminent and persistent challenges, and it holds the view that maintaining its alliance with Moscow will serve as a deterrent against further strengthening of Sino-Russian relations and restrict Russian inclinations to forge fresh strategic alliances with Pakistan. Both the People’s Republic of China and the Islamic Republic of Pakistan express a stronger inclination towards fostering closer relations with the Russian Federation, a stance that India finds somewhat disconcerting. As a result, the government of New Delhi seeks to reduce the level of Moscow’s closeness to its two adversaries. In pursuit of this objective, it has been determined that a deliberate abstention from openly criticizing Russia presents an opportunity to impede the deepening alliance between China and Russia, as well as to prevent a potential alliance between Moscow and Islamabad, both of which pose a threat to India’s fundamental interests. Hence, India’s energy diplomacy since 2011 has encompassed a combination of conventional geopolitical strategies and the evolving geo-economic landscape. The primary objectives of this initiative are to achieve diversification and enhance supply security, minimize carbon emissions, and utilize the expanding market as a strategic tool in diplomatic negotiations. The comprehensive strategy aims to address India’s increasing energy demands while positioning it as a significant participant in regional and global energy dynamics.

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CHAPTER 4

Eurasia Factor in India’s Energy Diplomacy: Paradigmatic Shifts in Corridor Approach to Connectivity

In a time characterized by the association of energy security with national security, the realm of India’s energy diplomacy has garnered increased attention and strategic significance. In the context of intricate geopolitical dynamics and economic considerations, the Eurasian region has assumed significant importance for the foreign policy strategists of India. The objective of this study is to examine the significant shifts in India’s energy diplomacy strategy in the Eurasian region, specifically focusing on the paradigmatic changes in its corridor approach to connectivity. This discourse aims to elucidate the shifting focus of India from its traditional energy partners towards the untapped and geopolitically significant Eurasian region. Eurasia, known for its abundance of landlocked nations with significant energy reserves, presents India with an alternative to its previously relied upon maritime energy transportation routes. The shift can be observed through India’s investment in multi-modal connectivity corridors, which include land-based pipelines, railways, and roads that span across multiple countries. This serves as a clear demonstration of a significant paradigm shift. However, this transition is anything but straightforward. India is faced with the task of maneuvering through a complex web of geopolitical intricacies, which encompasses not only the nations of Eurasia but also influential actors such as China, Russia, and the European Union. The potential outcomes carry significant implications,

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3_4

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encompassing a potential shift in India’s energy security, geopolitical positioning, and prospects for economic growth. The objective of this study is to analyze the intricate dynamics and potential advantages associated with the Eurasia factor. It seeks to provide a thorough comprehension of the importance of this factor in India’s developing energy diplomacy, as well as its wider implications for regional connectivity and geopolitics. The purpose of this study is to provide a conceptual framework for understanding the complex and significant topic of the growing importance of Eurasia in India’s energy diplomacy. By examining emerging pathways of interconnectivity and developing a nuanced comprehension of geopolitical transformations, this study aims to offer a comprehensive perspective on the evolving dynamics of India’s energy security and international relations.

India’s Energy Diplomacy Towards Eurasia: Connectivity and Pipelines Energy diplomacy has become an important agenda of India’s foreign policy since the last decade, particularly, when it signed a nuclear deal with the US (2005). If there is anything persistent in the world politics, it is the diplomacy driven/defined by national interests. After coming into power, the incumbent government has taken up many steps to strengthen diplomacy abroad. The mantra for meeting foreign policy objectives, Ministry of External Affair with the collaboration of other ministries including finance, oil and gas, trade, commerce, and information technology, has been assigned the accountability for training diplomats in such ways, they must have technical know-how and direct-dealings with at least two Indian States of their choices as their training part which was not there earlier. The diplomats are India’s high-ranking representatives and negotiators to a particular nation or organization. It is realized that the states are significant stakeholders of strong foreign policy-making (Roche, 2015). It will help diplomats to identify problems regarding merchant diaspora abroad, people-to-people exchange, road-mapping and coordinating the foreign development projects being installed in public domain of concerned country, missing links of economic developments and political strategies, etc. It will also enable them to connect the foreign countries and investors with Indian States pursuing the specific and investment goals. In pursuance of its Eurasian diplomacy, the government has kept these things

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in mind while appointing ambassadors to the region who brought some good results for executing the extending neighborhood policy by putting forward the negotiations over the impending agreements and projects in the region. The importance of this region is reflected in diplomatic exchanges of India’s ministerial visits to these countries and vice versa. The first priority of India’s energy diplomacy in the region lies in the fact of geographical connectivity, undermining its geopolitical interests for which it has been striving for more than a decade. India’s cultivation of relations with Eurasia undertaking development projects, financial aids, etc., has been interpreted by some Indian diplomats—Ajai Malhotra (2011),1 P.S. Raghavan (2014),2 Pankaj Saran (2017),3 and Saurabh Kumar (2018),4 as a part of its energy diplomacy that is instrumental to have access to energy-producing areas of the region through political compromising and diplomatic strategies. The former ambassador and diplomat to Kyrgyzstan P. Stobdan (October 2010-October 2012) has suggested that India’s stakes are high for developing its energy security and connectivity interests through investment in pipelines, rail/road projects in the region (Stobdan, 2015). 1 A former Ambassador of India to the Russian Federation from May 16, 2011, to November 30, 2013. Reference—Malhotra, A. (2011, August 11). Russia and India Report. Rossiyskaya Gazeta (Interviewer). Retrieved 23.12.2017, from http://www.ind ianembassy.ru/index.php/en/home/ambassador-interviews/761-interview-to-rossiyskayagazeta-russia-a-india-report-by-he-mr-ajai-malhotra-ambassador-of-india-to-the-russian-fed eration-august-11-2011. 2 A former Ambassador of India to the Russian Federation from January 2014 to January 2016. Reference—Raghavan, P.S. (2014, January 30). Russia and India Report: Economic Cooperation “Both a Challenge and an Opportunity”. Konstantin Fets and Elena Krovvidi (Interviewers). Retrieved 19.12.2017, from http://www.indianembassy.ru/index.php/en/home/ambassador-interviews/1041ambassador-of-india-s-interview-to-russia-india-report. 3 Ambassador of India to the Russian Federation from January 2016 to present. Reference—Saran, P. (2017, Dec. 19). The Celebration of the 70th anniversary of the establishment of Indo-Russo Diplomatic Relations. RIA Novosti/SPUTNIK News (interviewer). Retrieved 19.12.2017, from http://www.indianembassy.ru/index.php/en/ home/ambassador-interviews/2136-interview-of-ambassador-mr-pankaj-saran-with-ria-nov osti-sputnik-news-russian. 4 Ambassador of India to the Islamic Republic of Iran from August 25, 2015, to present. Reference—Kumar, S. (2018, January 25). India and Iran Enjoy Age-Old Friendly Ties, Says Indian Envoy to Tehran. Mehdi Garshasbi (Interviewer). Tehran Times. Retrieved 25.01.2017, from http://www.tehrantimes.com/news/420663/Indiaand-Iran-enjoy-age-old-friendly-ties-says-Indian-envoy.

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Similarly, in an exclusive interview to The Hindu, Iranian ambassador to India Gholamreza Ansari (2017) has spoken about Iran’s strong relations with India which are not going to be impacted by Western sanctions. He does not see India’s decision to cut oil imports (2016) as political one; rather, he welcomed India’s approach to diversify its energy basket to Central Asia by allowing Indian investment in the Chabahar Port and INSTC. In addition, during the International Conference in Panjab University, Chandigarh (March 2018), researcher’s talk with the former Indian diplomat I. S. Chadda (1956 batch), he said that the Indian government needs to “extend the number of diplomats in each country on the pattern of developed countries like Belgium as they send more than five diplomats in one country to handle diplomatic relations.” India, of course, needs to put more efforts and openness to translate its endeavors in the region into reality to get satisfactory outputs in terms of geoeconomic inputs, where it is still lagging far behind its perceived regional competitor China. For it needs to concentrate on reviving connectivity through transit corridors with the region. India’s Eurasia Policy encompasses all the major thrust areas of its diplomacy. It has gained momentum with the introduction of the CCAP at the first India-Central Asia Dialogue (2012) that signifies India’s multipronged approach based on political, economic, security, and cultural connectivity in/with the region, was unveiled by the former Indian Minister of State for External Affairs, E. Ahamed (2011–2014) in June 2012 in Bishkek. Under this, the region has been given a lot of importance in context of energy security (Jha, 2016). During his keynote address, Ahamed expressed his concerns about India’s connectivity with Central Asia putting more emphasis on energy scenario apart from covering India’s political, cultural, and economic relations in other areas of interests. India is intended to make Afghanistan a trade and energy hub by connecting Central Asia to South Asia using the synergy of bilateral and multilateral engagements through existing mechanisms like the SCO, INSTC, EAEC, etc. (Ahamed, 2012). Thus, the CCAP has been remained a part and parcel of further India’s Central Asian Dialogues where the goal and objectives of the same have been discussed annually to boost partnership between India and CARs. At the second two-day India-Central Asia Dialogue (June 2013) in Almaty, the energy, regional security, and connectivity had also remained major topics of discussion to deepen relations between India and CARs. The ICWA (2013) reported that the dialogue was joined by Minister

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of State for External Affairs E. Ahamed along with the Indian diplomat Chandrashekhar Dasgupta (Council Member of Indian Council of World Affairs—ICWA). The diplomat led the fourteen member delegations of Indian diplomats including researchers and academicians from the Centre for Research in Rural and Industrial Development (CRRID), Chandigarh (India). The dialogue was concluded by expressing consent over enhancing bilateral and multilateral partnerships in the region recognizing the role of China and Russia in infrastructural development. In the series of annual Connect Central Asia-India Dialogues, the third one (2014, October 10) was organized in Dushanbe (Tajikistan). Zafar (2014) has prepared the report that the ICWA and the Academy of Sciences Republic of Tajikistan (ASRT) have successfully organized this dialogue which includes the participants from India and CARs. Professor Karomatullo Olimov (Vice-President of the ASRT) and Asith Bhattacharjee (Indian diplomat to Tajikistan) have underscored the geopolitical and geo-economic proximity between India and the region. Besides highlighting CARs’ cultural and economic relationship with India, connectivity and energy cooperation were emphasized as major areas of their concerns. Even the same issues have been the topics of discussion in the fourth India-Central Asia Dialogue (2016, December 01), but the energy issue convergence and cooperation through institutional mechanisms like SCO have particularly been focused. All Central Asian countries including Russia have supported India’s membership in the SCO. In her keynote address, Secretary (West) Ruchi Ghanashyam (2016) has elaborated the all aspects of the CCAP through all dialogues to strengthen ties between South and Central Asia region. This diplomatic dialogue process has led India to get permanent membership in the region. The Chabahar Port and INSTC including some other connectivity projects and their potential applicability can be seen in this light. Nevertheless, the strategic shift of India towards Eurasia is not devoid of intricacies. One aspect to consider is the significant presence of China’s Belt and Road Initiative (BRI), a substantial infrastructure endeavor with the objective of establishing connectivity between China and Europe via Central Asia. India’s energy diplomacy necessitates skillful navigation of the complex geopolitical dynamics arising from the increasing influence of China in the Eurasian region. In contrast, Russia serves as both a long-standing ally of India and a significant energy provider to Europe. Achieving equilibrium in these interconnections necessitates a sophisticated diplomatic approach that acknowledges Russia’s enduring

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affiliations with Europe, while concurrently fostering novel channels for collaboration in the energy sector. India’s relationship with the European Union presents an additional layer of complexity. Both entities possess vested interests in the energy landscape of Eurasia; however, their strategies exhibit variations. The European Union aims to enhance the variety of its energy providers as a means to decrease its reliance on Russia. Conversely, India perceives Russia as a dependable and enduring ally in the realm of energy partnerships. The presence of these divergent goals requires a tactful diplomatic approach, yet it also presents prospects for cooperative endeavors in the field of energy research and technology. India’s involvement in multilateral forums such as the Shanghai Cooperation Organisation (SCO) demonstrates its dedication to adopting a cooperative and inclusive strategy towards energy diplomacy. These platforms provide opportunities for India to participate in discussions, exchange knowledge, and potentially impact energy policies at a regional scale. These activities are in line with India’s wider strategic objectives in the Eurasian region. In summary, India’s dynamic energy diplomacy in relation to the Eurasian region demonstrates a comprehensive approach that seeks to not only ensure a varied range of energy sources, but also utilize them to achieve wider geopolitical and economic advantages. The diplomatic dialogues with Eurasian countries have been the cornerstone of India’s Eurasian energy diplomacy which has mainly concentrated on energy cooperation and trade/transit infrastructural development. These diplomatic objectives mainly include Chabahar Port, TAPI, INSTC, and other pipeline, transport, and transit project where India has been involving since the last decade. These are mentioned under the given sub-headings: Chabahar Port It should be noted that development of Chabahar Port is not a new idea. The port agreement was concluded between India and Iran on the eve of the Delhi Declaration in 2003, providing strategic underpinnings to Tehran-Delhi relations over security imperatives in Af-Pak and Central Asia region to the north of Afghanistan. During his visit to Iran (2003), Prime Minister Shri Atal Bihari Vajpayee assured to Iran to develop the Chabahar Port (Fair, 2007, p. 135). Moreover, a trilateral agreement between India-Iran-Afghanistan troikas was also discussed to develop the

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Milak-Zaranj-Delaram rail/road route connecting Chabahar facilitating trade and transit activities in the region (MEA, 2003). It has already completed about 200 km road in Afghanistan near to the border of Iran in 2009, linking Zaranj-Delran worth over $135 million (Haidar, 2016; Ramachandran, 2018). The major locations and cities (Kabul, Kandahar, Delaram, Herat, etc.) of Afghanistan are well connected with the socalled trading and transit hub of Zaranj, the busiest route in Afghanistan. However, railway links are yet to be built for large volume trade facility (Bego, 2011) which requires quick action on the account of financial arrangements rather than being centered on political demonstrations. Chabahar has been the most discussed topic during the several ministerial exchanges with Eurasian countries. India has committed to invest US$85 million for developing the Chabahar Port which strategically situated just 90–100 km away from China-operated Gwadar Port in Pakistan. The Port is planned to be connected with Chabahar-Hajigak corridor for which Iran, India and Afghanistan signed a MoU with a commitment to invest US$21 billion. It would further provide connectivity to Central Asia and Russia (ANN, 2018). Roychowdhury (2016) has argued that the lifting of Western sanctions on January 16, 2016, has led to the resumption of the project. During Indian PM Narendra Modi’s visit to Iran on May 23, 2016, the main focus was on the development of Chabahar Port. He announced his intention to invest $500 million in the project. However, the multi-model trade connectivity remained the capstone/finishing touch of this visit. They have also discussed the multi-billion Chabahar-Zahedan-Mashhad railway network (1730 km) (a MOU signed between Iranian Railway and IRCON—India Railway Construction Company) to connect different areas of Central Asian region including other rail/road networks in Iran and Afghanistan, for which they have decided to approach all top global investors such as World Bank and IMF to generate the funds worth US$1.5 billion. There are discussions about connecting Iran’s northwards province Zabol with rail link situating next to Zaranj in the Western Afghanistan. Thus, it is seen as a significant step towards enhancing the hinterland capacity of Chabahar Port. In October 2016, the port has facilitated first shipment of wheat from India to Afghanistan bypassing Pakistan (Sajjanhar, 2017). The location of port has made it crucial trade hub being situated in the South of Sistan-Balochistan in Iran. Raju (2016) has reported that presently, approximately 85% Iran’s seaborne trade movements have been taking place at the Bandar Abbas Port which is immensely congested. As

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compared to this, Chabahar Port has high capacity, and there are plans to extend current capacity from 2.5 million tonnes to 12.5 million tonnes annually. Roy (2012, p. 960) has also found that it could enhance its capability to handle cargo ships by five times annually. Ansari (2015) has assessed the significance of Chabahar Port deal that it is the first foreign port in which India involved to such a large extent. It will not only enhance India’s geo-economic presence in Eurasia but also reap economic benefits for development of Sistan-Balochistan area on the one hand and provide landlocked countries with access to Indian Ocean. After one and half year of the agreement, the first phase of Chabahar Port has been completed at a rapid pace. It has been inaugurated by Iran’s President H. Rouhani on December 03, 2017. The event was followed by the External Affairs Minister of India Sushma Swaraj’s spontaneous stopover in Iran on her way back from Russia after participating on the SCO meetings that marked India’s keen interests in project (Haidar, 2017). It is worth mentioning that the port consists of two ports, each having five berths—Martyr Beheshti and Martyr Kalantari; and India, as per agreement (May 2016), is committed to refurbish one of the five berths falling in Martyr Beheshti Port and modernize 600-meter-long container handling capacity at the same. India has already shipped rail-tracks worth $150 million in July 2016 to develop the container tracks of Chabahar Port and laying the ChabaharZahedan railway (Iran Daily, 2017). The cargo-handling capacity of the port has been up-graded from 2.1 million tonnes (MT) in 2015 to 8.5 MT per year in 2017. It is expected to be enhanced by tenfold (86 MT) after the up-gradation of all ten berths (Pars Today, 2017). Chabahar is well connected by road connectivity with important cities such as Zahedan and Mashhad and further connected with Herat in Afghanistan. Herat is third largest city of Afghanistan and is connected with Iran’s tri-junction city Sarakhs (Roy, 2012, pp. 964–65). These can also be considered for railway link and be negotiated with China (already active in the region) to connect it further with Beijing’s already established railway link (about 10,000 kms) to Tehran across all five Central Asian countries. Turkmenistan having rail and road connectivity with Iran is being seen as an extension to integrated Chabahar-INSTC trade and transit route. It can be accessed easily from Chabahar Port’s hinterland transport arms via Mashhad in Iran and Herat in Afghanistan. Russia and Kazakhstan will be accessed via overland Iran and Turkmenistan to Kazakhstan through

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railway link. The route (so-called North–South Transnational Corridor) between three countries (worth US$620 million) has already been operationalized in 2014 under the Ashgabat agreement (2011) of which Turkmenistan is a depository party. It is being jointly funded by the parties and Asian Development Bank (ADB). It links Gorgan in Iran (70 km) with Gyzylgaya-Bereket-Etrek in Turkmenistan (470 km) and finally reached in Uzen in Kazakhstan (137 km). In Iran, it will further be linked to national railway network finding its way to the Persian Gulf ports (Railway Technology, 2014). India has also joined officially this trade-transit agreement on February 2018. It includes Kazakhstan, Turkmenistan, Iran, and Oman, in addition to India. Thus, it would fill the gap to connect with Central Asia region. In December 2018, India assumed operational control of the Shahid Beheshti Port located in Chabahar. Completion of the Initial Phase: The initial phase of the Chabahar development project has been successfully accomplished. Although the assumption of operational control by India indicated a certain degree of advancement, detractors observed that the process of completely operationalizing the port was characterized by a sluggish pace. The potential for establishing links with Afghanistan and Central Asia has not been fully realized. In 2019, the United States granted a sanctions waiver that exempted the Chabahar Port from the Iran restrictions. This exemption enabled India to maintain its operations at the port. The initial shipments of products to Afghanistan were effectively transported by India through the port of Chabahar, demonstrating the port’s viability for facilitating cargo transportation. However, the granting of a waiver by the United States to India can be seen as a diplomatic victory; yet, it has also exposed India to a potentially unstable situation due to the uncertain nature of US-Iran ties. Despite the shipment of commodities to Afghanistan, the resolution of logistical and security concerns remained incomplete. The year 2020 had only modest advancements. Limited visible progress was observed in the development of the port due to the COVID-19 outbreak and preexisting geopolitical difficulties, particularly between the United States and Iran. The project experienced a state of near cessation, prompting inquiries regarding its sustainability in the long run. The diplomatic relationship between India and Iran experienced tension due to India’s increasing alignment with the foreign policy of the United States, which subsequently impacted the progress of the project.

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In 2021, there were reports indicating that India had been excluded from the Chabahar-Zahedan railway project. However, it is worth noting that there are contradicting accounts regarding this matter. Despite encountering obstacles, the port had a notable surge in shipping activity, characterized by a greater volume of cargo being transported to Afghanistan and Central Asia. The lack of consistency in commitment demonstrated by India’s handling of the railway project has prompted inquiries into the country’s capacity to uphold its obligations. Despite experiencing an increase in traffic, the port has not yet achieved its maximum operational capacity, hence giving rise to questions over its economic sustainability. The challenges for India in the future will be to sustain this momentum at par with recent pace in development and investment. It also depends on the Trump’s new South Asia policy and his attitude towards Iran being apprehensive of its uranium enrichment program. The geopolitical tensions between India and Sino-Pak axis over the Beijing-funded CPEC project on the one hand and Iran’s call for China to join the Chabahar project on the other could delay New Delhi’s connectivity ambitions. INSTC: Corridor for Energy Potential Trade The INSTC has been India’s ambitious trade and transit connectivity project. It was first conceived in September 2000. After being ratified by India, Iran, and Russia, the same came into force in 2002. Today, the INSTC includes 14 member nations including Azerbaijan, Armenia, Belarus, Bulgaria (observer status), Kazakhstan, Kyrgyzstan, Tajikistan, Oman, Syria, Turkey, and Ukraine. The re-making of historical and cultural links through ancient Silk Road has been reviving in the minds of Chinese and Indian political elites. China with its Built Road Initiative (BRI), announced in 2013, has been striving for rebuilding transcontinental connectivity across the Eurasia and succeeded in the same to a great extent. Simultaneously, India with Russia and Iran has also made the parallel developments in the region by initiating INSTC having multiple access points across Eurasian landmass. A strategic expert Fasbender (2017) has said that India is still uncertain about present position as to “whether its future lies with the rimlands (Indo-Pacific region) or with heartlands (Central Eurasia)…….but the final outcome will be determined by energy and transport infrastructure available at the time.” He, in fact, suggests India to ensure its energy security and revive its trade and

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transit links instrumental for its future development apart from historical and political factors. Iran’s geopolitical location and its geostrategic proximity has made pivotal to India’s energy diplomacy towards Eurasia. Sarakhs (Iran) provides for the important tri-junction between Turkmenistan, Iran, and Afghanistan which covers about 88% of trade and transit activities via rail that is connected to important cities in Iran and run up at the Bandar Abbas Port (See Map 4.1) (FFFAI, 2014). The synchronization of Chabahar Port (Iran) and INSTC has been crucial for India’s energy diplomacy (Fasbender, 2017). The land- and sea-based long transport system (7200 km) has been envisioned by three major stakeholders: India, Iran, and Russia and later joined by 11 other countries. As compared to the earlier existing route, it is 40% shorter route via sea-land corridor and eventually 30% cheaper (Roy 2012, pp. 961–62). The rail/road link via Qazvin-Rasht-Astara(Iran)Astara(Azerbaijan) between Iran and Azerbaijan was a missing link and a part of INSTC route, now got completed (See Map 4.2). Iran’s

Map 4.1 Iran transit Corridor to Central Asia and Caucasus Republics (Source International North–South Transport Corridor [INSTC]: Dry Run Report 2014)

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Astara in the Southwest of Caspian Sea has already developed in 2013. In January 2017, Katanov (2017) has reported via AZERTAC (Azerbaijan State News Agency) that Rasht-Astara section of Iran-Azerbaijan rail route has completed and will be launched this year. Qazvin-Rasht route has completed its 90% and be ready for transportation within short time. Azerbaijan is 50% loan-providing partner with Iran of this project worth US$ 1.1 billion. It will connect Middle East and South Asia and Southeast Asia to Russia, Central Asia, Caucasus, and Europe (Nazarli, 2017) and strengthen the North–South integration. The transcontinental trade and transit corridor has a huge potential and plans are to connect it to Bangladesh, Myanmar, and Thailand via

Map 4.2

Qazvin-Rasht-Astara railway link (Source Meena Singh Roy [2012])

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Indian corridor. If get materialized, it will help India to improve its relations with neighboring countries as well as enhance the opportunities of trade and transit route from Europe to Southeast Asia. The proposed ITIDKD-Y corridor (March 2017) and Chennai-Vladivostok (Russia) sea route (September 2017), though not a part of INSTC, can be seen in this case. The ITI-DKD-Y is codename of Istanbul-Tehran-Islamabad-DelhiKolkata-Dhaka-Yangon, formally known as Trans-Asian Railway Southern Corridor under the guidance of United Nations Economic and Social Commission for Asia and Pacific (UNESCAP). It would help in the operationalization of transport network by filling the transit gap between South and Southwest Asia. Indian Railway Minister Prabhu has emphasized on this unified rail connectivity at the meeting held jointly by UNESCAP, India Railway Ministry and Organization for Cooperation between Railways (OSJD) on March 15–16, 2017 (UNESCAP, 2017). It will run from Yargon (Myanmar), Bangladesh via India to Islamabad (Pakistan), ZahedanTehran and end at the Istanbul (Turkey). Categorically, it is likely to enhance the capacity of the INSTC route. On the flip side, Indo-Pak relations could create hurdles in the way to get things right. Coordination must be needed beyond political skirmishes. If do so, it would showcase the expansion of APTTA5 (Afghanistan-Pakistan Trade and Transit) agreement to southwards India and northwards Central Asia, thereby providing more strength to geo-economic connectivity. On the other hand, the proposed Chennai-Vladivostok sea route would add more strength to INSTC project. The route was conceptualized on the eve of Indian Foreign Minister Sushma Swaraj’s meeting with Russian officials at the third Eastern Economic Forum in Vladivostok (2017), Russia. Both India and Russia contemplated to establish a maritime

5 APTTA agreement was signed between Afghanistan and Pakistan in 2010 and has been lingering on opposite commitments of both parties on the inclusion of India in the agreement. Pakistan has signed an APTTA with Afghanistan as a model of greater South Asia. The greater South Asia is to link South and Central Asia adding Afghanistan. However, the main objective of this agreement is to undermine the India’s relationship with Afghanistan as it denies Afghanistan to develop trade relations with India. Afghanistan wants India to facilitate import–export transitivity which is unacceptable to Pakistan given its bitter relations with India (Pakistan Defence, 2015)—Reference: Pakistan Defence. (2015, December 11). India wants Land Access to Afghanistan-Tajikistan, Pakistan denies. Retrieved 05.02.2018, from https://defence.pk/pdf/threads/india-wants-land-access-toafghanistan-tajikistan-pakistan-denies.412777/

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link between Chennai and Vladivostok to outspread geopolitical and geo-economic splash in Far East Russia (Chaudhury, 2017; Silk Road Briefing, 2017). Thus, amalgamation of these routes with INSTC would enhance India’s geo-economic potential amid China’s OBOR initiatives. Fasbender (2017) argued that INSTC project has been characterized as a competitor to the China-led BRI project by many commentators but ultimately leading to the Eurasian infrastructural integration. Both projects signify crisscross transit integration of the region—for BRI it will traverse through East–West axis and protrude in Europe and Africa; for INSTC, it will move North–South transit belt connecting Russia and post-Soviet republics to the Iranian and India ports. An India–EAEU Free Trade Agreement is seen as a qualitative addition to the INSTC that is significant precursor to enhance India’s economic and political engagements with Eurasian countries in a more appropriate way. In this direction, India and EAEU member countries have signed a Comprehensive Economic Cooperation Agreement (CEPA) (June 03, 2017) to initiate negotiations over Free Trade Agreement. EAEU includes Armenia, Belarus, Kzakhstan, Kyrgyzstan, and Russia (TASS, 2017). Iran is also in discussion for the same (Volgin, 2018). The main motivators behind this are India and Russia. They are committed to increase mutual investments from US$ 10 bn to US$15 bn and total trade to US$30 bn (currently US$7.4 bn in 2017) by 2025 (Suneja, 2018). In its survey report (June, 2017), a data based on respondents doing business in EAEU countries, the Federation of Indian Chambers of Commerce and Industry (FICCI) has found that Russia, Kazakhstan and Belarus are most favorite destinations of Indian business entrepreneurs. Russia and Kazakhstan are known for trade in energy hydrocarbons who got 87% and 36% positive response for enhancing trade with these countries. India’s trade with EAEU has increased up to US$11.3 billion in 2014 from US$9.3 billion in 2010 (FICCI, 2017). Thus, it is going to give major boost to INSTC trade corridor. India along with Russia and Iran has been trying to make INTSC stakeholder friendly by relaxing unwanted custom duties and promoting FTA and smooth transportation. In 2014, India prepared a dry-run report on the smooth functioning of INSTC, thereby removing tangible and intangible obstacles. The study was conducted by Shankar Shinde and Mr. Sohel Kazani under the aegis of the Federation of Freight Forwarders Association in India (FFFAI), which examined transit time and cost through the below route under study:

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Route 1—Mumbai to Bandar Abbas(Iran) via sea—Baku (Azerbaijan) (Truck change)—Russia; transit time—17 to 20 days. Route 2—Mumbai to Bandar Abbas(Iran) via sea—Amirabad/ Anzali (Iran) via rail/road—Astrakhan Transit via Caspian sea; transit time—18 to 24 days. Route 3—Mumbai to Bandar Abbas(Iran) via sea and to Russia via the new Rail Link run up to Kazakhstan; transit time—15 to 18 days. Being a shorter route and rich belt in energy resources, it is conceived as more transport cost-effective. The FFFAI report has found that INSTC has been partially operationalized, but there are numerous existing, planned (e.g. Iran-Armenia railway link), and under-construction transit routes that require constant political and economic drive to be linked up with mainstream of INSTC. It will not only make contribution in India’s development and growth but also meet India energy requirements in the future. Also the landlocked Central Eurasia will be opened for the world not as a geopolitical heart but as a geo-economic hub. Being a 3rd largest energy consumer, India has huge prospects, which lie in the INSTC as it is reflected in its already established good trade relations in terms of petroleum refining products with INSTC countries. India is one of the largest oil refiners in the world earning huge revenue from petroleum products by exporting. India’s Import and Export with INSTC Countries in Petroleum Products Except for Iran, India has not imported a substantial amount of oil and gas from INSTC energy-rich members such as Central Asia, Russia, and Azerbaijan. As per NITI Aayog’s online India Energy Dashboard, it has imported crude oil from Kazakhstan (635 thousand tonnes), Russia (145 thousand tonnes), Azerbaijan (139 thousand tonnes) and Turkmenistan (136 thousand tonnes) in 2016 in a quite low volume. In 2008–09, Iran accounts for more than 16% of India’s total oil imports that skid to 7% by 2016. However, through its successful diplomacy, India has managed to establish a refined petroleum market in the Eurasian region since the last decade. It has become a petroleum products exporter for Eurasian countries and beyond, given its largest petroleum refining capacity. Petroleum products are among the most exporting goods of India. In 2016, India exported petroleum products worth US$ 27.4 billion in which petroleum

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oils, bituminous, and their distillates (HS 2710) obtained the value of US$ 26.9 billion. Also, they contributed more than 10% in India’s total export value. Hence, petroleum products’ export business has been supporting Indian economy to a large extent. If one looks at the trade dynamics of India with its INSTC partners, it has been sharing significant volume of trade activities with these countries. India’s allover export to ITSTC countries amounts to nearly 5% of its total exports to the world which has been improving since the last decade. Similarly, India’s total imports from these countries are more than 5% of its global imports as it represents a favorite destination for a competitive market in Asia vis-à-vis China. Given its second largest refinery capacity after China in Asia, it has been developing a trade in petroleum products with Eurasian countries. India’s export of petroleum products to INSTC countries is about 9% of total global export in the same. At the same time, its import from them is 3.2% of its total global imports of petroleum products. Oman and Turkey are two countries within INSTC whose shares in India’s total petroleum products exports are 56% and 43%, respectively. Both account for nearly 99% across the INSTC countries (Fig. 4.1). A huge surge is noted in India’s petroleum products export to INSTC countries in which Iran, Oman, Turkey, and Russia are leading partners. It has increased manifold from 2.1% in 2011 to 15.4% in 2016 (see the Figure). However, Iran and Russia are at quite a low share, restricted to 1% only (Fig. 4.1) because they themselves are exporters of petroleum products with their substantial share (18% and 38%, respectively) in India’s intraINSTC imports of petroleum products. Oman is also a major country with 39% share in India’s petroleum products imports in 2016. Turkey (3%) and other INSTC countries (2%) comprise 5% of India’s imports. Overall, India’s trade (Export and Import) has been mainly concentrated in four countries (Oman, Turkey, Iran, and Russia) within INSTC corridors (Fig. 4.1, 4.2, 4.3 and 4.4). In terms of trade in all goods, Turkey, Oman, Iran, and Russia have been trading hub for India’s intra-INSTC exports which further gives a boost to its trade relations with other Central Asia Republics such as Kazakhstan, Tajikistan, and Turkmenistan. Turkey represents nearly 37% of India’s export basket for INSTC corridors. It has been followed by Oman (21%), Iran (20%), and Russia (15%). Ukraine (2%), Bulgaria (2%), Kazakhstan (1%), and Syria (1%) are also having a significant share. They together account for about 99% of India’s total export to INSTC in 2016.

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Fig. 4.1 Share of INSTC countries in India’s petroleum products exports

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Oman 56%

Turkey 43%

Iran 1%

Fig. 4.2 Share of INSTC countries in India’s petroleum products imports

Russia Federatio n 0%

Turkey 3%

Oman 39%

Others 2%

Russian Federation 38%

Iran 18%

Similarly, INSTC countries have also been sharing good terms of relations with India, given their substantial share in India’s total imports. Iran is the largest exporter to India among INSTC countries with about 45% share as it is a major crude oil exporter to India. It has been followed by Russia (26%), Ukraine (11%), Oman (7%), and Turkey (6%). They together make 95% of India’s total imports from INSTC countries (see the above figure). India has imported petroleum products worth US$ 478 million in 2016 from INSTC members including observer member Bulgaria. It has experienced a significant decline in the petroleum products’ imports from INSTC as compared to its import value US$ 728 million in 2014. This

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Fig. 4.3 Share of INSTC countries in India’s total export (Source UN Comtrade; ITC Trade Map)

Bulgaria (Observer Status) 2%

Others 1%

Turkey 37%

Iran 20%

Ukraine 2% Syrian 1%

Fig. 4.4 Share of INSTC countries in India’s total imports

Russia Federation 15%

Oman 21%

Kazakhsta n 1%

Others Turkey 5% 6%

Russian Fedarations 26%

Ukraine 11%

Oman 7% Iran 45%

decline could be the result of global slowdown of imports, declining costs of crude oil, and UN sanctions over Iran, thereby some logistical faults. However, the potential for trade activities appears to be comprehensive given the recent initiatives put forward by the INSTC stakeholders to improve logistical and connectivity problems (Singh & Sharma, 2017) in which India, Russia, and Iran have been playing a leading role. Export by INSTC countries to India has been relatively low than that of India’s share in petroleum products imports from the same countries.

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In 2016, INSTC countries exported petroleum products excluding India worth US$ 86 billion to the world market. In which, New Delhi has only negligible share, i.e. 0.6%. On the other hand, in the same year, INSTC countries, excluding India, imported petroleum products for US$ 15 billion from the global market. Out of this, India’s export to them was of US$ 2384 million with a substantial share of 15.4%. Hence, India’s export value of petroleum products has managed to make a great difference from the preceding five years. Therefore, there is a huge potential for India in Eurasian region given exports and imports of petroleum products. It would strengthen India’s stake in the Eurasian energy market. In 2021, India initiated discussions on the International North–South Transport Corridor (INSTC) with its partner nations, with the aim of revitalizing the project in the aftermath of the global pandemic. Foreign Interest: Uzbekistan, among other nations, has expressed interest in becoming a member of the International North–South Transport Corridor (INSTC), so potentially expanding the corridor’s reach and enhancing its overall importance. In spite of a resurgence in enthusiasm, the International North–South Transport Corridor (INSTC) continued to be hindered by operational, logistical, and budgetary challenges. The inclusion of additional countries in the corridor has the potential to enhance its effectiveness, but it also introduces a heightened level of diplomatic intricacy. Pipelines Pipedreams Presently, India has been devoid of transnational pipeline connectivity/ network due to geographical and geopolitical constraints on the one hand and lack of political will and infrastructural-investment incapacity on the other. The discussions over gas pipelines such as Iran-PakistanIndia (IPI) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) have been still lingering given Indo-Pak arch rivalries and differences over the pricing of gas and transit fees. As per the report of TOLO News, the Chairman of the TAPI project (1814 km), Muhummet Murat Amanov announced that Turkmengaz has “finalized the evaluation phase” and “started laying the pipeline” yet to be finalized by participating countries. The construction phase of Afghanistan side will “start within a year (Mohammadi, 2017).” During the ceremonial meeting between the four TAPI participants (Afghan President Ashraf Ghani, Turkmen President Gurbanguly Berdymukhamedov, Pakistani Premier Shahid Khaqan

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Abbasi, and India’s Minister of State for External Affairs M.J. Akbar) including their diplomats in Afghanistan on February 2018, pledged to enhance cooperation on the US$ 15 billion project which will pump 33 billion cubic meters gas to South Asia Market (AFP, 2018). The prospects are very attractive if all go in an appropriate manner; however, many scholars have been expressing their doubts over the geoeconomic and geopolitical viability of these projects. In an interview with the Tehran Times, India diplomat to Iran Saurabh Kumar speaking on IPI and TAPI gas pipeline said, “today [gas] pipeline is not economically very exciting though viable…….to transport gas, LNG is the economic option to go for (Kumar, 2017).” Referring to Prime Minister Modi’s visionary statement during his visit in Turkmenistan (July 2015), “[the] possibility of land-sea route through Iran for the [gas] pipeline,” the US-based Eurasian geopolitics expert Michel (2015) has highlighted the importance of pipeline through Iran going by the name of Turkmenistan-Iran-India (TII) gas pipeline. He said that the TII would minimize the security concerns having with long-debated TAPI pipeline. Alhadeff (2015), on the other hand, critically examined the view that the replacement of TAPI with TII may be good for India having good relations with Russia and Iran but would not be in the interest of the US perceiving Iran as a geopolitical opponent. Turkmenistan being apprehensive about Iran-Russia’s blockades for its trans-Caspian gas pipeline and Iran’s settlement over transit fees would be determining factors for India’s solution for TII pipeline. For India, TII pipeline would probably pass through seawaters; and to make it economically viable, it has to pass through Pakistan’s Exclusive Economic Zone (India’s rival). Otherwise, it will cost more to parties involved in it, Alhadeff (2015) argued. The other option of pipeline from Russia to India through China also seems a distant dream for the given of its relations with the US vis-à-vis China. Nevertheless, if India wants to get Eurasian energy into home, it needs to work in a realistic manner. It should reinforce its neighborhood policy by taking neighbors into confidence because they are ultimately providing economically viable transit passage to India bringing energy from Central Asia, West Asia, and Southeast Asia. Peace and stability in these countries should also be required for meeting India’s energy security. And this responsibility lies with the Indian government to secure uninterrupted energy supply by making it business friendly instead of playing geopolitical cards.

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SCO The most of the countries having huge reserves of oil and gas in the Eurasian landmass are part of the SCO. India’s inclusion in the SCO is likely to enhance cooperation in anti-terrorism and security issues in general and energy trade opportunities in particular. Earlier, India became a part of “SCO Energy Club” established in 2007 for which the Memorandum of Understanding (MoU) was signed in late 2013 in order to give it the formal shape. The energy club has been established for the purpose of providing information about energy projects to the member countries and deepening cooperation among the energy producers and consumers (Freeman, 2015, p. 172). Therefore, the SCO would provide India with opportunity to engage with the energy-rich Eurasian region to meet its growing demand of oil and gas. After a lengthy debate and dialogue on India’s efforts to get permanent membership in the SCO, the latter had taken a dramatic step towards its geopolitical expansion. The fifth Astana Summit (July 2005) proved as a watershed in this direction. For the first time, it included Mongolia (2004); India, Iran, and Pakistan (2005); and Belarus (2010) as observer members. Sri Lanka (2009), Turkey (2012), and Cambodia, Nepal, Armenia, and Azerbaijan (2015) have joined as dialogue partners (Contessi, 2016, p. 7). In the Ufa Summit (2015), the SCO had decided to expand its geopolitical outreach towards South Asia by giving India and Pakistan a full-fledged membership in the SCO. They have achieved this in the Astana Summit on June 9, 2017 (SCO Secretariat, 2017). It will not only help India to heighten its multi-dimensional relations like political, economic, connectivity, and counter-terrorism cooperation, rather energy cooperation anticipated to be remained fulcrum of the regional cooperation (The Economic Times, 2017). The “SCO Development Strategy until 2025” can be seen as a vibrant step in this regard to achieve desired goals which reflect its openness towards new members, meeting the criteria and terms of the SCO Charter. Presently, it accounts for approximately half of the world population, about more than 60% Eurasian landmass (see Map 4.3) and a quarter of the world’s Gross Domestic Product (GDP). On the other hand, Pakistan’s entry will be to pursue and implement its agenda of economic cooperation, trade, energy, and connectivity such as China-Pakistan-Economic-Corridor (CPEC), Turkmenistan-AfghanistanPakistan (TAP) gas pipeline, and One-Belt-One-Road (OBOR) projects

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Map 4.3 Current geographic landmass of SCO (Source Empty map from Central Intelligence Agency [CIA]—The Worldfactbook, 2021 and edited by Researcher)

(The Nation, 2017). Thus, the Summit has been conceived as a window for regional economic prosperity for existing members and opportunity for new members. Already, India has been cooperating with two big economic giants (Russia and China) in the region through multilateral formats such as RIC trilateral forum, BRICS, and G-20 (Volkhonsky, 2017). Therefore, India’s entry in the SCO will be imperative for the completion of many energy projects in the region.

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India’s Energy Business-shafts Oil and gas have been characterized a geopolitical commodities and hence remained a subject of substantial state-government intervention. A strategic scholar Goldthau (2010, p. 25) explores the ways in which countries use the state power to provide their energy companies with competitive edge in bidding for energy resources—consumer countries strengthen their energy supply landscape by diplomatically flanking oil and gas contracts; producer countries, on the other hand, use diplomacy to expand accesses to energy markets. In order to diversify their oil and gas supplies/imports, Indian companies have also been making a strong efforts to earn a strong position in the Eurasian region vis-à-vis China. As noted in Chapter 4, India has been making major investments in the energy sector through its energy market arms such as OVL, OIL, BPRL, and IOCL to secure its energy security and strategic presence in different regions of the world. There have been challenges for Indian companies to access to equity oil and gas because Chinese companies are there to outmaneuver Indian companies in various energy deals concluded with Eurasian countries. Therefore, India is required to relax its finance power to back its companies abroad.

Interest Convergence Analysis: Knitting India into Eurasian Framework India has intensified its energy diplomacy particularly in the dawn of twenty-first century. India’s energy diplomacy can be seen in the context of its interest convergence with various stakeholders in the region. These stakeholders are likely to support each other when there is a convergence between their interests and growth models irrespective of their sovereignty issues. Huda and Ali (2017) have tried to perceive energy diplomacy in South Asia (TAPI project) through the lenses of multistakeholder diplomacy by taking state and non-state actors into analysis beyond the security paradigms of energy projects. However, Sovacool (2010) was first to take up the study of multi-stakeholders’ interest convergence analysis regarding Trans-Asian Gas Pipeline. Taking a view from these literatures, this section tries to highlight India’s Eurasian energy diplomacy through the prism of interest convergence analysis of existing geopolitical stakeholders (China, Russia, Ukraine CARs, Iran, Afghanistan, and Pakistan) in the region. The Eurasian region has great

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potential to meet India’s energy and security needs, thereby fostering its cooperation with a range of business stakeholders of various energy projects in the Eurasian landmass. Given global energy’s shifting center of gravity, it is observed that India and China can cooperate in the Eurasian energy sector by demonstrating their convergence of interests. India can provide a vast market opportunity for China to tackle its recent economic slowdown. China, on the other hand, could play a role as a developer and financier for Indian projects, given its world’s most significant foreign exchange reserves (US$ 3.6 trillion as of 2015). China and Russia have already been working on laying out oil and gas pipelines. On the southern side of China, both New Delhi and Beijing can work together to exchange energy technology businesses. In return, China, with its enormous financial reserves, could be persuaded to help both India and Russia to develop their mines and oil reserves. It would allow Russia to sell its oil in Chinese and Indian market, and India to get energy through the territory of China while addressing their long-term border disputes (Bhaskar, 2015). In an interview, Russian Energy Minister Alexander Novak with RT had told that Russia finds a lot of potential in Indian energy market. Given India’s growing consumption of gas, India’s large population and growing economy need modern energy consumption services that Russia could provide by building gas pipelines. Russia has always been engaged in many projects with India and China. And to provide stable and safe energy supply to these countries, Russia has been developing its eastern shore (Novak, 2015). Moreover, a large pool of human resources of India could meet the terrible lack of Russian populace in energy development projects, given Russia’s unwillingness for Chinese workers within its territory (Bhaskar, 2015). The Ukrainian crisis and Russia’s annexation of Crimea (March, 2014) have shifted Moscow’s focus to diversify its energy supply network towards South and East Asia that results in Indo-Russia’s historical deal for constructing $30 billion oil pipeline traversing trough China’s Xinjiang region (Daly, 2014) that will start from the Altai Mountain region of Russia (Vaid, 2014). On the occasion of 14th India-Russia Annual Summit (October 21, 2013), Indian Prime Minister Manmohan Singh (2004–2014) and Russian President Putin have given a joint statement that “Russia and India agreed to establish a joint study group for exploring the possibility of direct ground transportation of hydrocarbons.” The announcement has its roots in an “Agreement on the

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enhancement of cooperation in Oil and Gas Sector” concluded between both countries on December 21, 2010 (Daly, 2014). Before this, the Foreign Ministers of China, India, and Russia—Yang Jiechi, S. M. Krishna, and Sergei Lavrov (2009)—had agreed to enhance their cooperation for energy security, terrorism, and climate change (IANS, 2009). An energy diplomacy expert Daly (2014) has argued that the pipeline would garner political support from China. It is reflected in the statement of Xia Yishan (Director of China’s Center for Strategic Studies in Energy) who said, “the project would be beneficial for both China and India allowing China to become an oil transit in addition to its status of the recipient of the Russian oil.” Ultimately, the unity between India and China would serve Russia’s interests vis-à-vis the US and Western powers. On the positive side, China, India, and Russia have already been cooperating in other multilateral formats such as RIC trilateral forum, BRICS, and G-20 (Volkhonsky, 2017). Therefore, China requires a balancing act for managing the relations with India and Russia under these forums to maintain the spirit of SCO (Zahid, 2017). These multilateral forums/formats must work towards providing alternate markets for global import-exports for Eurasian countries. With India, not having an effective bilateral trade agreement with China, these formats could provide multilateral mechanisms for India to gain market access in the region for some of its competitive energy companies. India must exercise greater role and responsibility in the negotiating process of these forums as the stakes are very high. The Russian diplomat to India, Nikolay (2018) extolled India’s presence and expansion of geo-economic partnership on equal basis in the Eurasian region as well as in other parts of the world. He added that as a strategic partner of ours it has various ways—“first is the SCO and many others. There are many approaches, be it connectivity and transportation or be it energy. India is welcome.” India’s entry into the SCO has made a trio of great Asian powers to emerge in the organization. Recently, the 15th RIC Trilateral Academic Conference (January 24–25, 2017) was held in New Delhi, in which all parties have stressed on to “explore the ways by which the SCO would be the primary vehicle for providing and ensuring stability and security in Eurasia.” However, India’s presence within the SCO will give RIC an institutionalized format (ICS, 2017). Moreover, the agreements, such as the Treaty of Long-Term Good-Neighborliness, Friendship and Cooperation between the member states of the SCO (2007, seventh annual summit in Bishkek) under which India and Pakistan got full-membership

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status, emphasized that neighbors should establish a new architecture of global security in context of mutual security concerns, trust-building, and resolving bilateral issues through peaceful means, regardless of their ideological division. Similarly, an Agreement on Cooperation and Interaction of the Member States of the SCO on Border Issues6 also advocates same values. The empirical study conducted by Huda and Ali (2017) explores the possibility of convergence not only between India, Pakistan, Afghanistan, and Turkmenistan over the TAPI project but could also be extended beyond the member countries to Russia, China, the US, and SAARC countries such as Bangladesh and Nepal. The project would integrate security interests between Pakistan and India in the restive Balochistan, thereby benefitting Afghanistan in state-building and alleviating Turkmenistan’s concerns regarding the smooth supply of energy and the spread of terrorism. Apart from these four countries, China, Russia, the US, and SAARC regional interests could be overlapped with the prospects of TAPI projects. China has stakes in the CPEC project crossing through the restive Balochistan that raises Beijing’s concerns about the overall stability of the region. Therefore, common security stakes of India, China, and Pakistan could be resulted in supporting TAPI project. TAPI member countries could also take technical help from China in the construction of the pipeline as Beijing has vast experience and know-how in tackling technical challenging projects. This is the reason that ADB (transaction advisor to facilitate TAPI pipeline construction) has been approached China for participating in the construction of TAPI pipeline (Mariet D’Souza, 2011, p. 4). China has been the sole importer of Turkmen Gas as Russia announced a drastic reduction of Ashgabat gas imports. On October 2014, Russia’s Gazprom had announced to cease purchasing Turkmen natural gas (Tanchum, 2015). Moscow cut about 72% of its gas imports for Ashgabat by 42.6 bcm in 2007 to 11.8 in 2009 that finally came to an end altogether in 2016 (Vaid & Kar, 2016). However, Turkmenistan does not want to be dependent on Beijing for energy trade which has motivated it

6 Shanghai Cooperation Organization (2005), a Document on the Agreement on Cooperation and Interaction of the Member States of the Shanghai Cooperation Organization on Border Issues, available at SCO’s official website.

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to diversify its natural gas export to South Asia by making concessions to TAPI project (Tanchum, 2015). It is evident that Russia and Turkmenistan have not been enjoying good terms of relations. Moscow and Beijing are themselves geopolitical competitor in the region. However, both Russia and China have convergence in Central Asia for the given strategic and security interests. Huda and Ali (2017, p. 207) have argued that “energy geopolitics is as much about competition as it is about cooperation and the diversification of the partners.” Therefore, assuming Russia and China in the construction phase of pipelines connecting Central and South Asia would be a viable option because their companies have local knowledge and technical expertise. Also, their existing interest in bringing stability in the region could be overlapped with India’s strategic concerns for peace and stability in the region. In this direction, Afghan-Pakistan Transit Trade Agreement (APTTA) between Pakistan and Afghanistan could be another point of convergence as Indian market would be linked directly to Central Asia via this transit route. However, Pakistan has signed an APTTA with Afghanistan (2010) as a model of greater South Asia. The greater South Asia is to be linked to South and Central Asia adding Afghanistan, as it is a bridge link between both regions. However, the main objective of this agreement is to undermine India’s relationship with Afghanistan as it denies Afghanistan to develop trade relations with India (Pakistan Defence, 2015). Afghanistan, on the other hand, wants India to become a partner to this agreement, but this was turned down by Pakistan. In an interview, Indian ambassador to Afghanistan Amar Sinha has given a very balanced view that “unfortunately, APTTA has become a hostage to political issues that we should keep separate…..and allow people and the businesses to prosper. Ultimately, it will create prosperity and solve economic development problems existing in Afghanistan.” Syed Yahya Akhlaqi from Afghanistan Ministry of Commerce and Industries and Afghanistan Chamber of Commerce and Industries (ACCI) has also added that “if India is not a part of this agreement, we believe that the agreement was not proper……… (TOLO News, 2015).” Warikoo (2016, p. 14) has observed that Central Asian countries have also been looking towards India as a partner to connect South and Central Asia by playing a balancing role. Given their economic, historical, and geo-cultural affinity with India, they perceive it as the only economic power that does not carry any territorial/political ambitions

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in the region and whose policy is based on collective development and growth of all. Pakistan would not allow Afghanistan to trade with New Delhi on an equal basis. Although Afghanistan’s goods can reach the Wagah border between India and Pakistan under this agreement, Afghan trucks are not allowed to import goods from India. For given this reason, Afghanistan has been threatening to cut its trade with Pakistan by not allowing the later to trade with Central Asian countries through its territory (Syed, 2016). It has also invoked Afghanistan’s President Ashraf Ghani during his meeting with India counterpart Prime Minister Narendra Modi in September 2016 to facilitate Afghanistan-India Air Corridor to pressurize Pakistan to be affected both economically and politically. Being a cost-effective, it would not only strengthened Indo-Af relations but also give weight to India’s geopolitical stake in Eurasia given the current low fuel prices. The corridor became a reality after one year when it was launched by commissioning India-bound flight from Kabul to New Delhi on June 19, 2017. It carried 60 tonnes of medicinal plants worth US$ 11 million. The subsequent flight from Afghanistan took off from Kandahar carrying 40 tonnes of vegetables and fruits on June 24. India has also sent flight from New Delhi to Kabul with 100 tonnes of goods including pharmaceuticals and medical equipment (Alami, 2017). As a result, Pakistan has contrived with Beijing to link CPEC with Kyrgyzstan and Tajikistan, thereby making it a Trilateral Transit Trade Agreement (TTTA). Also, it is planning to link further with a corridor of Central Asian Regional Economic Cooperation (CAREC) for establishing a direct connectivity with Central Asia and Pakistan (Syed, 2016). But, this dream of connectivity could not be possible without the help of India and Afghanistan as India has sovereign issues with CPEC and strategic interests in Afghanistan who has been in favor of New Delhi. In an interview, Siegfried O. Wolf had stressed that “Pakistan should open up the CPEC to West (Afghanistan and Iran) and to the East (India). Only then it could make a significant impact on regional connectivity and is able to function as a game changer for regional cooperation…….” He went on to say that to realize this, a normalization for Indo-Pakistan relations and constructive Iran-Pakistan ties would be preconditions. Moreover, there is a need to reassess Pakistan’s security-based approach towards India and Afghanistan (Wolf, 2016). Sinha has also urged Islamabad to work with relevant stakeholders to resolve connectivity issues that would be not only in the interest of Pakistan but also for other countries (TOLO News,

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2015). Thus, this point of convergence could bring forth certain cooperation between South Asian countries to reach the Eurasian energy market. ITI-DKD-Y trade and transit route can also be seen in this case which would provide India with huge transit route traversing from Myanmar, Bangladesh via India to Pakistan, Iran and Turkey, and finally connect SAARC countries to Eurasian market. It will not only change SAARC countries’ perception about India’s hegemonity but also help to improve their relations with India thereby strengthening New Delhi’s geopolitical stake in Eurasian energy market. In the face of failing this, Afghanistan has been capitalizing its friendly relations with India in context of Iran. Since India has good relations with Iran at economic and geopolitical levels, Afghanistan has been seeking the later as an alternate transit route to the Indian Ocean, thereby reducing its dependency over Pakistan. Iran is also interested to be a part of this as it would help strengthen country’s economic and social development. As a transit country, Iranian people would get employment for their social development and also help Afghanistan in state-building. Geoeconomically, the triad would benefit Iran and India to access Eurasian energy market via Afghanistan and would make INSTC a reality. Consequently, Iran will become a center for energy trade between Eurasia and India and beyond (Al Jazeera, 2016). Thus, the convergence could lead to historical development in the Eurasian region which would open up new opportunities for India to meet its energy needs. In the middle of these dynamics, India, Iran, and Afghanistan have signed a historic deal (May 24, 2016) to develop three-nations tradeand-transport corridor via Chabahar Port worth US$ 500 million as a complement to INSTC that would help in reducing time and cost of doing trade and business with Eurasia (PTI, 2016). Pakistani media counted this move as to be envisaged by Washington’s new policy towards Afghanistan and urged India to contribute to the development process of Afghanistan (News Desk, 2017). Calder (2012) has argued that Iran being a most important part of energy activities and central in the Eurasian geopolitics, its geopolitical relationship with India, China, and Russia and geostrategic interests in Af-Pak region will be imperative to refashion regional geopolitical dynamics. Pakistan remains an important factor in the picture being a traditional old geostrategic partner of China. Also, its newfound closeness to Russia (a traditional ally of India) cannot be overlooked in the present geopolitical space. Notwithstanding this factor, it seems highly improbable that

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Russia would give preference to Pakistan over India. India’s demand for Russian defence equipment has steadily increased over the years, reaching 68 percent in 2016, as reported by SIPRI. However, this figure has slightly decreased to 45 percent in 2022. Singh and Sharma (2017) have attempted to show the scope of integrating South Asia with the world trading system through the convergence of INSTC and OBOR. Some of INSTC members such as Kazakhstan, Kyrgyzstan, Turkmenistan, and Uzbekistan are also the part of China-led OBOR. They observed that the OBOR links the Almaty and Shanghai in Kazakhstan and the extension of INSTC provides a bridge link between Almaty and Bandar Abbas across the Central Asia. At the same time, the North-West route between Iran, Turkmenistan, and Kazakhstan could also have convergence with Beijing’s Shanghai-Almaty route. China also understands the centrality of India’s geopolitical positions being a major bridge link to its OBOR connectivity projects which could bring them together to reach the political negotiations. Nevertheless, the need for improving political relations to enhance the scope of trade and transit would be instrumental to determine the future new geopolitics. It would be the game changer in the Eurasia benefiting all the major stakeholders. It is doubtless that the convergence of interests between state and stakeholders would be game changer in the region by reducing the degree of conflicts, but it is subjected to constraints by the major power stakeholders, given their disconsolate political relations and geopolitical alignments against each other. Many scholars are of the view that OBOR itself has been designed to overcome the potential uncertainties being posed by INSTC in coming days. India’s decision to stay away from the China’s BRI, particularly from the CPEC (a connotation of Sino-Pak geopolitical axis) initiative due to sovereignty issues, would make difficult for them to reach at any consensus over trade and transit questions. In addition to this, Kazakhstan and Kyrgyzstan have also been following the CPEC corridor through Quadrilateral Traffic in Transit Agreement (QTTA) signed with China and Pakistan bypassing Afghanistan in 1995 (Bhutta, 2017). Despite its lack of success, there is a possibility that the proposal will be revisited following Afghanistan’s rejection of the APTTA (2010) trade-transit agreement with Pakistan (Omid, 2017). However, China’s pace of development and technological experience in infrastructure building has been more advanced than that of

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India. Moreover, if India involves Chinese companies in Eurasian energyrelated projects, the chances of reducing stake of Indian companies could be alarming bell for India. Consequently, important countries for India such as Iran and Russia would put more emphasis on China-led projects for energy trade. To tackle these potential problems, India needs to strengthen its energy diplomacy by increasing the brisk of development and strengthening domestic consensus. Also, India needs to revisit its neighborhood policy by taking neighboring countries into confidence because they are ultimately providing for economically viable transit points for India bringing energy from Central Asia, West Asia, and Southeast Asia. An infrastructural development and promoting the democratic values, peace, and stability in these countries should also be a part of Indian energy diplomacy that is required for meeting India’s energy security.

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Saran, P. (2017, December 19). The Celebration of the 70th Anniversary of the Establishment of Indo-Russo Diplomatic Relations. RIA Novosti/SPUTNIK News (interviewer). Retrieved December 19, 2017, from http://www.indian embassy.ru/index.php/en/home/ambassador-interviews/2136-interview-ofambassador-mr-pankaj-saran-with-ria-novosti-sputnik-news-russian SCO Secretariat. (2017). The Astana Declaration of the Heads of State of the Shanghai Cooperation Organization. Retrieved November 23, 2017, from http://eng.sectsco.org/ Silk Road Briefing. (2017, September 14). Chennai to Vladivostok as India Russia Maritime, Overland Routes Develop. Retrieved March 13, 2018, from https://www.silkroadbriefing.com/news/2017/09/14/chennai-vladiv ostok-india-russia-maritime-overland-routes-develop/ Singh, S., & Sharma, M. (2017). INSTC: India-Russia’s Trade to Get a Major Boost. Indian Engineering Exports, September. Sovacool, B. K. (2010). A Critical Stakeholder Analysis of the Trans-ASEAN Gas Pipeline (TAGP) Network. Land Use Policy, 27 (3), 788–797. Stobdan, P. (2015, June 08). India’s Stakes and Dilemma in SCO. IDSA. Retrieved 22.01.2018, from https://idsa.in/idsacomments/IndiasStakesand DilemmainSCO_pstobdan_080615 Suneja, K. (2018, January 29). The EAEU—India FTA Might Also Cover Transport, Services and Investments. Eurasian Studies. Retrieved March 13, 2018, from http://greater-europe.org/archives/4485 Syed, B. S. (2016, November 11). Ghani‘s Call for INDIA Joining Transit Trade Rejected. The Dawn. Retrieved December 22, 2017, from https://epaper. dawn.com/DetailImage.php?StoryImage=11_09_2016_001_007 Tanchum, M. (2015, March 20). A Breakthrough on the TAPI Pipeline? The Diplomat. Retrieved December 18, 2017, from https://thediplomat.com/ 2015/03/a-breakthrough-on-the-tapi-pipeline/ TASS. (2017, June 03). Eurasian Economic Union, India to Start Negotiations on Free Trade Zone. TASS, Russian New Agency. Retrieved March 13, 2018, from http://tass.com/economy/949635 The Economic Times. (2017). Look Forward to Deepening India’s Ties with SCO: Narendra Modi. Retrieved August 26, 2017, from http://economict imes.indiatimes.com/news/politics-and-nation/look-forward-to-deepeningindias-ties-with-sco-narendra-modi/articleshow/59038564.cms The Nation. (2017). Pakistan, India to Officially Join SCO at Astana Summit. Retrieved December 26, 2017, from http://nation.com.pk/national/06-Jun2017/pakistan-india-to-officially-join-sco-at-astana-summit TOLO News. (2015, April 13). APTTA Becomes Hostage to Political Issues: Indian Ambassador. Retrieved December 20, 2017, from https://www.tol onews.com/afghanistan/aptta-becomes-hostage-political-issues-indian-ambass ador

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UNESCAP. (2017, March 17). Regional Cooperation in Cross-Border Rail Connectivity Can Spur Trade and Support Sustainable Development in South and South-West Asia. Retrieved March 13, 2018, from http://www.unescap.org/news/regional-cooperation-cross-border-railconnectivity-can-spur-trade-and-support-sustainable Vaid, M. (2014, May 27). Cooperation with China Important for India’s Eurasian Energy Policy. Observer Research Foundation. Retrieved July 08, 2017, from http://www.orfonline.org/research/cooperation-with-china-imp ortant-for-indias-eurasian-energy-policy/ Vaid, M. & Kar, S. (2016, Feb 05). TAPI Pipeline Progresses, but Future Uncertain. Oil and Gas Journal. Retrieved December 19, 2017, from http://www.ogj.com/articles/print/volume-114/issue-5/transp ortation/tapi-pipeline-progresses-but-futureuncertain.html Volgin, Y. (2018, March 12). Iran’s FTA with the EAEU will set the Framework for the North-South Corridor. Eurasian Studies. Retrieved March 13, 2018, from http://greater-europe.org/archives/4487 Volkhonsky, B. (2017). How the Entry of India and Pakistan Transforms the SCO’s Agenda. Retrieved November 28, 2017, from https://www.rbth. com/international/2017/05/30/how-the-entry-of-india-and-pakistan-transf orms-the-scos-agenda_773172 Warikoo, K. (2016). Central Asia and South Asia: Opportunities and Challenges. India Quarterly, 72(1), 1–15. Wolf, S. O. (2016, May 31). Interview—Siegfried O. Wolf (S. Hamrah, Interviewer) E-International Relations. Retrieved December 23, 2017, from http://www.e-ir.info/2016/05/31/interview-siegfried-o-wolf/ Zafar, A. (2014, October 10). Connect Central Asia-India Dialogue III (Event Report). New Delhi: Indian Council of World Affairs. Zahid, W. (2017). India and Pakistan Membership: A Challenge for SCO. Retrieved October 19, 2017, from http://www.globaltimes.cn/content/105 2183.shtml

CHAPTER 5

India and Eurasia Economic Cooperation: Analyses of Trends and Potentials

Throughout the recorded history, it is evident that India and Eurasia have fostered a strong and enduring economic and commercial relationship. Nevertheless, it is imperative to acknowledge that these economic interconnections and exchanges had experienced a gradual weakening over the period of time. Following the end of colonialism, and in the wake of the Cold War’s conclusion, numerous efforts have been undertaken to strengthen and enhance various facets of bilateral and regional economic relations. The rise of regionalization and market-based economies in developing countries have made economic cooperation a crucial factor in determining the bilateral and regional partnerships. In light of the emerging geopolitical and geo-economic landscapes, India has to strategically realign its economic and foreign policy towards the Eurasian region. India has strategically adopted a number of policy frameworks, including the “Look East,” the “Connect Central Asia Policy,” and the “Extended Neighborhood Policy” (Jaffrelot, 2003, pp. 35–68; Pant & Passi, 2017; Roy, 2012, pp. 301–316). These policy frameworks meticulously devised and implemented, which at the moment have been serving as crucial pillars in India’s foreign policy architecture. By adopting these frameworks, India has demonstrated its incisive understanding of the geopolitical landscape and its commitment to fostering strong relationships with countries across the globe. These policies have been reflecting © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3_5

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India’s proactive approach in terms of enhancing economic engagements with neighboring regions/countries, promoting connectivity, and expanding its sphere of influence. Consequently, the prevailing circumstances have engendered a plethora of remarkable prospects in the realm of trade and investment initiatives, poised to invigorate various sectors including manufacturing, services, technological goods, and energy. Against this backdrop of prevailing circumstances, the ensuing section delves into the intricate dynamics of economic collaboration between India and the Eurasian region. Following the breakdown of the Soviet Union, the Eurasian region emerged as a new geopolitical and geo-economic entity. However, as a result of its disintegration, these regional countries have been experiencing a financial crisis due to the loss of its manufacturing network and subsidies from the former USSR. Concurrently, a lack of expertise in the private sector, inadequate infrastructure, and a lack of institutions for a market economy forced these newly independent countries to redesign their international trade policies with other countries. It has also transformed planned countries into market ones (Libman & Vinokurov, 2018). Following the implementation of economic reforms in the 1990s, India had re-oriented its foreign policy framework towards several regions including Eurasia (Horimoto, 2017, pp. 463–496). Concomitantly, the Eurasian region has responded very positively by reestablishing and strengthening its commercial interactions with India and vice versa.

Economic Institutionalization Between India and Eurasia Economic institutionalization between the two regions pertains to the procedural development of both explicit and implicit regulations, standards, and associations that facilitate and govern economic exchanges between various entities. Over the past few decades, India and Eurasia, two regions characterized by their diverse and dynamic economies, have actively pursued different forms of economic institutionalization. These institutional mechanisms comprise bilateral and multilateral trade agreements, projects aimed at enhancing connectivity, initiatives focused investment, and frameworks for regional cooperation. Both regions have been actively working towards strengthening economic cooperation by establishing various institutional mechanisms to facilitate increased

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engagements and promote trade development. The economic opportunities between India and the Eurasian region have been actively pursued through various means such as the exchange of goods and services, foreign investment and joint ventures, banking and insurance, agriculture, pharmaceutical products, and technical training. According to the Ministry of External Affairs, Government of India (2021), India and Russia have a “Special and Privileged Strategic Partnership” that encompasses diverse domains of collaboration, including trade and economy. Several mechanisms contribute to the facilitation of India-Russia economic bilateral relations. The India-Russia Forum on Trade and Investment is a prestigious platform co-led by India’s Commerce and Industry Minister and Russia’s Minister for Economic Development. The India-Russia CEOs’ Council is a forum that brings together prominent business executives from India and Russia to identify and actively pursue opportunities in trade, investment, technology, and innovation. Furthermore, it makes policy recommendations to governmental entities on matters of economic cooperation. The India-Russia Business Council is a joint initiative of the Federation of Indian Chambers of Commerce and Industry (FICCI) of India and the Russian Chamber of Commerce and Industry (CCI). The platform promotes dialogue and the exchange of ideas between the business communities of both countries. India and Russia have a “Special and Privileged Strategic Partnership” that encompasses diverse domains of collaboration, including trade and economy. Several mechanisms contribute to the facilitation of IndiaRussia economic bilateral relations. The India-Russia Forum on Trade and Investment is a prestigious platform co-led by India’s Commerce and Industry Minister and Russia’s Minister for Economic Development. The India-Russia CEOs’ Council is a forum that brings together prominent business executives from India and Russia to identify and actively pursue opportunities in trade, investment, technology, and innovation. Furthermore, it makes policy recommendations to governmental entities on matters of economic cooperation1. The India-Russia Business Council is a joint initiative of the Federation of Indian Chambers of Commerce and Industry (FICCI) of India and the Russian Chamber of Commerce and Industry (CCI). The platform promotes dialogue and the exchange of ideas between the business communities of both countries (IndiaRussia Relations, 2014). India-Russia Trade, Investment and Technology Promotion Council is a joint effort by CII in India and RUIE in Russia. India-Russia Business Dialogue is another mechanism wherein CII and

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Business Council for Cooperation with India of Russia collaborated. The goal is to improve collaboration between private sector entities from both nations. The India-Russia Chamber of Commerce has been supporting the SMEs in India and Russia. The organization helps SMEs interested in India and Russia markets with information, guidance, and support. India recognized Azerbaijan in December 1991. To improve bilateral trade and cooperation, India and Azerbaijan have established a number of economic institutional mechanisms. These include the India-Azerbaijan Inter-Governmental Commission on Trade and Economic, Scientific, and Technological Cooperation (IGC), the India-Azerbaijan Business Forum, the Memorandum of Understanding (MoU) on Tourism Cooperation, the Agriculture Cooperation Agreement, and the Information and Communication Technologies (ICT) Cooperation Agreement. The IGC meets on a regular basis to review bilateral relations and explore new areas of cooperation. The IGC also hosts the India-Azerbaijan Business Forum, a forum for business communities to dialogue and exchange ideas. The agreement aims to promote tourism, exchange information, train personnel, and facilitate travel. The Agreement on Cooperation in the Field of Information and Communication Technologies (ICT) aims to foster collaboration in areas such as e-governance, cyber security, telecommunication, software development, and digital media. India and Azerbaijan are also partners in the International North–South Transport Corridor (INSTC) project, which aims to connect India with Europe via Iran, Azerbaijan, Russia, and other countries (Ministry of Commerce and Industry, GOI, n.d.). In the given context, India has successfully established several institutional mechanisms with Kazakhstan. Mavlonov (2006, pp. 424–448) has put forth the argument that the reciprocal visits have significantly contributed to the advancement of bilateral cooperation and engagements. Malik and Mir (2012, p. 73) argued that India and Kazakhstan have initiated the establishment of the Indo-Kazakhstan Joint Business Council. The bilateral economic relationship between the two countries is characterized by the signing of trade agreements, a treaty to prevent double taxation, and the provision of technological assistance. During the recent meeting of the Indo-Kazakh Joint Business Council, the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Kazakhstan Chamber of Commerce & Industry successfully established a new collaborative program. Daly (2015) has argued that Kazakhstan has expressed its desire to enhance commercial engagement by pursuing

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a multilateral agreement for the establishment of a transport corridor linking Iran, Turkmenistan, and India with the region. In 2017, India and Kazakhstan entered into a Free Trade Agreement with the aim of bolstering their trade and investment ties.1 Over the past two and a half decades, India and Kyrgyzstan have engaged in numerous high-level visits as part of their efforts to foster economic cooperation. Consequently, it is noted that both countries have entered into various agreements encompassing trade, economic collaboration, science and technology cooperation, cultural exchange, educational initiatives, scientific pursuits, and mass media engagements. The two countries have recently entered into a significant agreement known as the Kyrgyzstan-India Inter-Governmental Covenant. This agreement focuses on the avoidance of double taxation between the two countries.2 Zafar (2015, p. 4) claims that Kyrgyzstan has assumed a significant role as a transit route for bilateral trade connecting Central Asia and Europe. During the course of this ongoing process, the GOI has successfully entered into agreements with Kyrgyzstan pertaining to defense and culture. To improve bilateral trade and cooperation, India and Tajikistan have established a number of economic institutional mechanisms. These include the India-Tajikistan Inter-Governmental Commission on Trade and Economic, Scientific, and Technological Cooperation (IGC), the India-Tajikistan Business Forum, the MoU on Tourism Cooperation, the Agriculture Cooperation Agreement, and the Information and Communication Technologies (ICT) Cooperation Agreement. The IGC meets on a regular basis to review bilateral relations and explore new areas of cooperation. The IGC also hosts the India-Tajikistan Business Forum, a forum for business communities to dialogue and exchange ideas. The agreement aims to promote tourism, exchange information, train personnel, and facilitate travel. The Agreement on Cooperation in the Field of Information and Communication Technologies (ICT) aims to foster collaboration in areas such as e-governance, cyber security, telecommunication, software 1 India EAEU FTA—FICCI Survey Report. Accessed from http://ficci.in/spdocu ment/20978/India-EAEU-FTA-Survey-Report-revised.pdf. Accessed on 3 September 2023. 2 Contemporary Kyrgyzstan-India Relations. Retrieved from http://shodhganga.inf libnet.ac.in/bitstream/10603/18326/10/10_chapter%204.pdf. Accessed on 2 October 2014.

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development, and digital media. India and Tajikistan are also partners in the International North–South Transport Corridor (INSTC) project, which aims to connect India with Europe via Iran, Azerbaijan, Russia, and other countries (India-Tajikistan Joint Statement during State Visit of President to Tajikistan, 2018, October 7–9). To improve bilateral trade and cooperation, India and Turkmenistan have established a number of economic institutional mechanisms. These include the India-Turkmenistan Inter-Governmental Commission on Trade and Economic, Scientific, and Technological Cooperation (IGC), the India-Turkmenistan Business Forum, the Memorandum of Understanding (MoU) on Tourism Cooperation, the Agriculture Cooperation Agreement, and the Information and Communication Technologies (ICT) Cooperation Agreement. The IGC meets on a regular basis to review bilateral relations and explore new areas of cooperation. The IndiaTurkmenistan Business Forum is also held at the IGC, with the goal of identifying and pursuing opportunities in trade, investment, technology, and innovation. Crop production, animal husbandry, veterinary medicine, food safety, and research and development are also covered in the MoU. The ICT agreement seeks to foster collaboration in areas such as e-governance, cyber security, telecommunications, software development, and digital media. India and Turkmenistan are also partners in the International North–South Transport Corridor (INSTC) project, which aims to connect India with Europe via Iran, Azerbaijan, Russia, and other countries (PTI, 2022 April 2). In 2010, the President of Turkmenistan, Gurbanguly Berdimuhamedov has visited India on a state visit. Michael (2015) has mentioned that both countries have entered into an Intergovernmental Agreement (IGA) and a Gas Pipeline Framework Agreement (GPFA) during the TAPI Summit in 2010. As per the aforementioned agreements, Turkmenistan has committed to supplying India with a substantial volume of 38 million cubic meters of natural gas per day (mm’s cmd) over a span of 30 years. Uzbekistan is also one of the significant partners of India in the Eurasian region. According to Indian Embassy in Tashkent (2013), in order to engage and enhance economic cooperation, institutional mechanisms have been put in place by signing many economic cooperation agreements which included Trade and Economic Cooperation (1993). Moreover, several important trade and commerce higher rank officials’ visits have been exchanged. During these visits, joint statements have been issued related to trade, investment, and agriculture. Along with economic

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cooperation, several other areas of cooperation have also been identified and committed to enhance cooperation in sectors such as education, civil aviation, science and technology, and telecommunications.

India and Eurasia: Status and Structure of Economies In order to conduct a comprehensive analysis of the trade trends and potential between India and Eurasia, this chapter has undertaken an examination of the current status and structure of their respective economies. This examination has specifically considered key indicators such as the GDP per capita and population. In assessing the growth prospects of bilateral trade between the two regions, it becomes evident that the size of their respective economies assumes paramount significance. The scale of economic output holds the key to unlocking the potential for enhanced trade relations between these regions. The boosting of trade between these two regions is crucial to underscore the pivotal role played by the growth of GDP and population. These factors have consistently emerged as key determinants in shaping the trajectory of economic cooperation. The robustness of the GDP highlights the immense promise for the proliferation of commodities and services within the market. In contrast, the population of the country/region presents a substantial market size, a factor of considerable importance. Population is the backbone of any economy in terms of human capital, which is the primary cause of the country’s prosperity. Table 5.1 shows the population of the Central Asian countries as follows: Table 5.1 Population and density (2022)

S. No.

Country

Population

Density

1 2 3 4 5 6 7

Russia Azerbaijan Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

141.9 million 10.3 19.61 6.74 10.14 6.52 35.16

8.4 124 7 34 71 13 7

Source Central Asia Population. (2022). Available at: https:// worldpopulationreview.com/continents/central-asia-population. Accessed on: 3 September 2023

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The table presents the population and density of seven Eurasia countries in 2022. Russia has the largest population with 141.9 million people, but it has the lowest population density at 8.4 people per km2 . This indicates that Russia’s large land area is underpopulated, with most of its population concentrated in the west and center. Azerbaijan has the second highest population density with 124 people per km2 , indicating a small land area but a large population. Kazakhstan has the second highest population density with 19.61 million people, but it also has the second lowest density at 7 people per km2 . Kazakhstan’s population is unevenly distributed, with 70% living in the southern and eastern regions and the central and western regions being mostly desert or steppe. Kyrgyzstan has been the fourth most populous country with 6.74 million people, with 34 people per km2 and the third highest density. Tajikistan has been the third most populous country with 10.14 million people and the highest population density at 71 people per km2 . Turkmenistan has the fifth most populous country with 6.52 million people and the third lowest density at 13 people per km2 . Its population is mostly urbanized, with cities housing around 53% of the population. Climate influences population density, with higher density in oases and lower density in the desert. Uzbekistan has the largest population with 35.16 million people but the lowest population density at seven people per km2 , indicating a large land area but a small population. Water resources determine population density, with higher density in irrigated areas and lower density in arid areas. As a comparative to population, the GDP per capita represents another measurement of the economic development. The GDP per capita is the quantification of a country’s economic productivity, obtained by dividing its total economic output by the number of individuals comprising its population. Gross Domestic Product (GDP) is frequently employed as a measurement for evaluating the level of prosperity and the economic advancement of a nation. The GDP annual growth rate denotes the proportional variation in the GDP between consecutive years. It serves as a reflection of a nation’s economic performance and its inherent potential. The population denotes the quantifiable magnitude of individuals residing within a nation-state during a specific temporal interval. The aforementioned factors have a profound impact on the labor force’s magnitude and composition, as well as on the consumption and demand patterns within a country. Moreover, they give rise to various social and environmental challenges that a country must confront.

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According to the above-mentioned data in Table 5.2, India has shown the lowest GDP per capita among the eight countries in the year 1990, amounting to a mere US$ 375. Nevertheless, it is worth noting that India displays the most substantial increase in GDP per capita growth rate compared to the other eight countries during the undertaken timeframe. This is evidenced by an average annual growth rate (AAGR) of 5.77%. From 1990 to 2022, India’s GDP per capita exhibited an average annual growth rate of 5.77%. As of 2022, India has achieved a GDP per capita of 2388 US dollars, surpassing several other countries listed in the table, including Kyrgyzstan, Tajikistan, and Uzbekistan. Russia displayed the most substantial GDP per capita among the eight countries under consideration during the year 1990, amounting to 3493 US dollars. Nevertheless, it is noteworthy to observe that Russia’s GDP per capita exhibits a fluctuating growth trajectory throughout the given time frame, characterized by intermittent periods of negative growth juxtaposed with periods of substantial expansion. The primary contributing factors to the observed phenomenon can be attributed to the economic shivering resulting from the dissolution of the Soviet Union, the financial crisis of 1998, the volatility in oil prices, and the implementation of sanctions by Western nations. The AAGR of Russia’s GDP per capita stands at 5.48%, a figure marginally below that of India. In 2022, Russia shows a notable achievement in terms of its gross domestic product (GDP) per capita, attaining a value of 15,345 US dollars, highlighting that this figure remains worth noting among the eight countries under consideration. Azerbaijan had a GDP per capita of 1237 US dollars in 1990, but it had the highest average annual growth rate (AAGR) of 7.32% from 1990 to 2022, owing primarily to the rapid development of its oil and gas sector. Azerbaijan’s GDP per capita is expected to reach 7736 US dollars by 2022, surpassing Kazakhstan and Turkmenistan. This expansion is largely due to the country’s oil and gas sector. Tajikistan had the third lowest GDP per capita in 1990, with an average annual growth rate of only 0.98% from 1990 to 2022. This was due to a lack of economic diversification, a reliance on remittances from migrant workers, and vulnerability to natural disasters and climate change. Tajikistan’s GDP per capita will be 1054 US dollars by 2022, the lowest among the eight countries. Kazakhstan had a high GDP per capita of 1647 US dollars in 1990, but experienced a moderate AAGR of 5.01% from 1990 to

India

375 324 353 408 422 452 481 641 817 992 1346 1447 1593 1729 1981 2010 1574 1900 2239 2388

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2015 2016 2017 2018 2019 2020 2021 2022

1647 1515 1320 1350 1469 1229 1658 2874 5292 8514 9071 12,387 10,510 7715 9248 9815 9731 9055 10,374 11,244

Kazakhstan 609 513 372 395 345 280 322 433 543 966 880 1178 1103 1121 1243 1280 1309 1173 1306 1606

Kyrgyzstan 870 346 236 178 220 139 191 311 407 712 744 962 926 803 806 827 871 859 916 1054

Tajikistan 496 824 625 558 593 645 970 1456 2140 3919 4479 6798 6672 6390 6587 6967 6966 7612 NA NA

Turkmenistan

GDP per capita of India and Eurasian countries (current US$)

Years

Table 5.2

651 603 576 601 623 558 383 465 654 1082 1377 1740 2132 2568 1827 1532 1725 1685 1993 2255

Uzbekistan 1237 676 436 409 562 655 763 1045 2443 5575 5843 7496 5500 3881 4147 4740 4794 4214 5408 7736

Azerbaijan

3493 3099 2662 2644 11,635 1772 2378 4102 6920 11,635 10,675 15,421 9313 8705 10,720 11,371 11,585 10,126 12,593 15,345

Russia

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India

%) 2.05 5.65 13 7.5 −5.4 7

Source World Bank Databank, 2023

GDP (annual growth 1990–2000 2000–2004 2006–2012 2015–2018 2018–2020 2020–2022 Population (million) 2015 1330 2018 1352 2019 1366 2020 1380 2021 1407 2022 1413

Years −5.4 4.96 19 4.1 −8.35 23 5.95 6.32 6.45 6.59 6.69 6.80

17.54 18.27 18.51 18.75 19 19.62

Kyrgyzstan

−2.5 10.4 22 2.6 −7.74 8

Kazakhstan

8.42 9.10 9.32 9.53 9.75 9.95

−8.4 10.12 23 6.9 3.86 15

Tajikistan

5.34 5.85 5.94 6.03 6.34 6.43

3 3.67 36 6.3 9.25 NA

Turkmenistan

31.30 32.96 33.58 34.23 34.15 35.64

−1.4 4.78 28 5.8 10 13

Uzbekistan

9.64 9.93 10 10.1 10.1 10.2

−4.7 9.79 34 −3.4 −11 43

Azerbaijan

143.81 144.47 144.37 144.01 143.44 143.55

−5.0 18.27 20 5.11 −11 21

Russia

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2022. This was largely due to its large oil and mineral reserves, which supported economic growth and development. However, challenges such as economic diversification, institutional reforms, and environmental issues also impacted its growth. By 2022, Kazakhstan’s GDP per capita reached 11,244 US dollars, lower than Russia’s but higher than most other countries. Kyrgyzstan’s GDP per capita increased by 3.76% annually from 1990 to 2022 due to its agricultural sector, but faced political instability, social unrest, and external shocks. By 2022, Kyrgyzstan’s GDP per capita reached 1606 US dollars, higher than Tajikistan’s but lower than most other countries. Uzbekistan’s GDP per capita increased by 4.64% annually from 1990 to 2022 due to economic reforms, improved business environment, and trade openness. However, it also faced challenges such as poverty reduction, human development, and regional cooperation. By 2022, Uzbekistan’s GDP per capita reached 2255 US dollars, higher than Kyrgyzstan’s and Tajikistan’s but lower than most other countries. The Eurasian region has unlike levels of economic development, influenced by their natural resources, political stability, etc. Since gaining independence after the collapse of the Soviet Union, many of these countries experienced initial economic declines but have since moved onto growth trajectories. The period from 2006 to 2012 was generally favorable for these countries, primarily due to high oil and energy prices. However, the global financial crisis had a relatively considerable impact on them. Most countries have shown a modest increase in their populations over the years, which could be a double-edged sword—indicating both potential labor force growth and increased social welfare demands. The economic landscapes of India and these Eurasian countries have been marked by both similarities and stark differences. Natural resources like oil and gas play a massive role in the Eurasian economies, while India’s growth is more diversified. Both regions have navigated through political changes, global crises, and internal reforms, exhibiting resilience and adaptability. While they all have their unique economic challenges and opportunities, the upward trends in GDP and growth rates for most countries are positive indicators for the future.

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India and Eurasia: FDI Inflows FDI plays a significant role as a crucial source of finance and technology for emerging countries, with a particular emphasis on Asian countries. In recent years, both India and Eurasia have emerged as regions that have garnered substantial FDI inflows. This may be attributed to many factors, including the presence of expansive markets, supportive regulations, and advantageous geographical positions (Akhmetov & Suleimenova, 2019, pp. 135–143; Bhat & Rahman, 2023; Kaushal, 2021). This chapter has conducted a comparative analysis of the FDI inflows in India and Eurasia, while also examining the many variables that exert effects on these inflows. Investment is significant area for economic cooperation among the countries. The more investment creates more infrastructure which results in more income or revenue as per investment multiplier effect. In addition, an analysis was conducted to assess the effects of FDI on the economic growth, development, and integration of the aforementioned areas. The arguments and results presented were substantiated by data obtained from many sources, including the Press Information Bureau of India, the United Nations Conference on Trade and Development, and the World Bank (Table 5.3). FDI is widely recognized as a crucial determinant of economic growth. India has been actively engaged in the pursuit of liberalization by strategically attracting a substantial influx of FDI across all sectors of its economy. Seetha (2012) asserts that the implementation of economic liberalization in India has resulted in significant advancements across several sectors of the economy, including industry, services, commerce, and agriculture. However, it is important to note that the area successfully rebounded from the economic downturn in the late 1990s and subsequently established itself as a prominent and thriving economic hub on a global scale. Amidst shifting geopolitical and geo-economic factors, the recently independent Eurasian countries have also implemented a degree of restricted liberalization. These countries had experienced a significant transformation in terms of FDI. Consequently, the region has been emerging as a growing destination for FDI. According to Paswan (2015, p. 13), despite being landlocked economies, the CARs have attracted a substantial inflow of FDI from their early stages of independence. The region’s vast energy resources contribute to the establishment of

Kazakhstan

1282 2835 2590 2092 4157 2546 7611 11,972 16,818 14,276 7456 13,760 13,785 9738 8406 4021 8511 4669 3817 3118 3670 3337 6108

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Tajikistan 24 10 36 32 272 54 339 360 376 95 8 70 233 108 263 227 340 277 317 213 107 84 174

Kyrgyzstan −2 5 5 46 176 43 182 208 377 190 437 693 293 757 248 404 616 −107 47 209 −402 226 291

131 170 276 226 354 418 740 856 1277 4553 3631 3399 3117 3061 4170 4259 2243 2086 1985 2166 1436 1284 936

Turkmenistan

FDI Inflows of India and Eurasian Republics (US$ millions)

Years

Inflows

Table 5.3

75 83 65 83 177 192 174 705 711 842 1628 1651 674 1077 626 1068 134 98 412 2286 1728 2276 2531

Uzbekistan 130 227 1392 3285 3556 1680 −584 −4749 14 473 563 1465 2005 2632 4430 4048 4500 2867 1403 1504 507 −1708 −4474

Azerbaijan

2808 2808 3425 7755 15,284 14,375 37,442 54,922 75,856 27,752 31,668 36,868 30,188 53,397 29,152 11,858 37,176 25,954 13,228 31,735 10,410 38,639 −18,681

Russia

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5 NA NA 44

4 −26 426 −121 −1279 −148 −411 3089 1207 3159 7885 5390 1481 2287 3815 795 −5235 913 −1095 −2620 −2206 1441 −1808

NA NA 1 1 0 0 0 0 0 0 0 0 −29 5 5 2 2 −458

Kyrgyzstan

Kazakhstan

Outflows

NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 35 159 82 23 70 48 12

Tajikistan NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Turkmenistan NA NA NA NA NA NA NA NA NA 3 4 3 4 3 4 5 6 9 2 3 11 3 4

Uzbekistan 1 NA 326 933 1205 1221 705 286 556 326 232 533 1192 1490 3230 3260 2574 2564 1761 2432 825 77 172

Azerbaijan

3152 2502 3484 9550 13,663 16,747 29,840 56,735 34,450 41,116 48,635 28,423 70,685 64,203 27,090 26,951 34,153 34,153 35,820 22,024 6778 64,072 101,440

Russia

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favorable conditions for international enterprises, resulting in the attraction of significant levels of FDI. According to a research by the Asian Development Bank Institute (2014), Kazakhstan and Turkmenistan, both energy-rich countries, have emerged as prominent investment destinations in Asia and beyond. Theodore and Polyxeni (2016, p. 63) argued that the countries have emerged as a significant destination FDI among rapidly developing economies such as Russia, India, and China. According to available data, Russia has recorded the highest cumulative Foreign Direct Investment (FDI) inflow from India, amounting to $433.6 million. Among the eight countries considered, Kazakhstan follows with an FDI inflow of $152.8 million, while Azerbaijan received $24.8 million. According to available data, there are three countries that possess significant natural resources, particularly oil and gas. These resources have proven to be attractive to investors from India. Tajikistan has recorded the lowest cumulative foreign direct investment (FDI) inflow from India, amounting to $2.7 million. Following Tajikistan, Kyrgyzstan has received a cumulative FDI inflow of $3.6 million from India, while Turkmenistan has recorded a higher cumulative FDI inflow of $36.1 million. It has been observed that the economic development, political stability, and market access in these three countries are relatively low. This situation has been found to discourage potential Indian investors from considering investment opportunities in these regions. The FDI inflows from India to these countries have experienced changes over time, influenced by factors including global economic conditions, bilateral relations, trade agreements, and investment opportunities. The FDI inflows from India to Russia experienced a notable increase in 2020 and 2021. This can be attributed to the establishment of various strategic partnerships and joint ventures in sectors like energy, defense, space, and pharmaceuticals. The FDI inflows from India to Russia experienced a significant decline in 2022. This decline can be attributed to the geopolitical tensions and economic sanctions imposed by the US and its allies. The FDI inflows from India to these countries are comparatively lower in magnitude when compared to the FDI inflows that India receives from other countries. Based on the most recent data, it has been observed that India attracted a total of $58.8 billion in Foreign Direct Investment (FDI) during the fiscal year 2021–2022. The primary contributors to this influx of FDI were Singapore, with an investment of $15.9 billion, followed

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by the United States with $10.5 billion, Mauritius with $9.4 billion, the Netherlands with $4.6 billion, and the United Kingdom with $1.7 billion. The FDI inflows from India to the eight countries in Central Asia and Eastern Europe during FY 2021–2022 were recorded at $0.3 billion. This amount represents less than 1% of India’s overall FDI received. Between 2000 and 2022, Russia has been the primary source of Foreign Direct Investment (FDI) outflows to India, with a total amount of $620.8 million. This trend has been consistent, reaching a peak of $101.4 million in 2022. The primary sectors targeted by Russian FDI outflows include energy, defense, pharmaceuticals, and information technology. Kazakhstan has also become a significant source of FDI outflows to India, with a total of $19.9 million. The patterns of FDI outflows from Kazakhstan to India have shown fluctuations over time, with a peak in 2010 at $7.9 million and a notable decrease in 2016 at − $5.2 million. These outflows are characterized by a concentration in sectors such as mining, agriculture, and infrastructure. The six other countries, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Azerbaijan, and Armenia, have had a comparatively limited impact on India’s FDI outflows. Their aggregate FDI outflows have consistently maintained relatively low levels, with Kyrgyzstan recording a negative value of − $0.5 million and Azerbaijan registering a positive value of $16.8 million. In 2022, a cumulative amount of $1.3 trillion in FDI outflows was documented, encompassing eight distinct nations. China was the most prominent recipient of FDI, with an influx of $180 billion. The eight countries mentioned earlier exhibited a modest outflow of FDI towards India, amounting to $0.1 billion, representing less than 0.01% of the cumulative FDI made by the aforementioned countries. Based on the preceding discussion, it is evident that both regions have been actively engaging in various forms of collaboration such as MoUs, protocols, agreements, bilateral visits, dialogues, and summits. These efforts are aimed at fostering economic and commercial cooperation between the two regions. The primary focus of these agreements lies in the realm of business and investment, specifically aimed at enhancing their commercial connections. Through this chapter, a sincere effort has been made to map the trade trends and future prospects between both the regions:

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Trade Between India and Eurasia Throughout recorded history, there has been a strong economic connections between both regions, characterized by the unrestricted exchange of and trade, culture, ideas, etc. In the recent past, India has implemented various policy frameworks, namely the “Look West,” “Look East,” “Extended Neighborhood,” and “Connect Central Asia” policies. These policies were designed to bolster economic engagements with various regions including the Eurasian region. According to Panagariya (2006), India adopted a strategic approach towards developed nations in the 1990s, implementing a “Look East” policy that emphasized economic engagements with countries such as Japan, China, Korea, the Association of Southeast Asian Nations (ASEAN), the European Union (EU), and the US. Sachdeva (2010) argued that India has effectively diversified its trade relations with major economies such as the US, the European Union, and various countries in Asia. India is demographically and geographically a giant country. It has a 1.4 billion population. It is the 6th largest economy in the world regarding nominal Gross Domestic Product (GDP) and placed 3rd by Purchasing Power Parity (PPP). Some scholars argued that India will become the 3rd largest economy in the world. On the other hand, India is characterized by its substantial size in terms of both population and land area. The economy in question is ranked as the sixth largest globally in terms of nominal Gross Domestic Product (GDP). Additionally, it holds the third position when considering Purchasing Power Parity (PPP), whereas on the other hand, it is important to note that Eurasia represents a significant market with a substantial population of approximately 228 million individuals. This region is very significant on account of its abundant mineral resources, which contribute to its economic development. Additionally, Eurasia holds a distinct advantage due to its favorable geographic and strategic position. Based on the available information, it can be inferred that both the regions, namely India and Eurasia, display significant prospects for fostering economic collaboration. The current chapter primarily centers on the Indo-Eurasian Economic Cooperation, specifically examining trade, investment, and other economic mechanisms. The authors have conducted an analysis on the trade trends, specifically focusing on the Indo-Eurasian trade. Additionally, they have computed

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the Trade Concentration Index as part of their evaluation. The identification of key challenges in Indo-Eurasian trade relations, as well as the exploration of potential areas for economic cooperation, has been undertaken. The trade trends between both the regions have been discussed as below.

India’s Trade Trends with Eurasian Countries India has significant historical and cultural connections with the Eurasian region. Currently, it is presenting a promising market for Indian commodities and services, alongside serving as a valuable reservoir of energy and raw resources. The commercial relationship between India and Eurasian countries has seen growth in recent years, although it has not reached to its full potential owing to many impediments including poor connectivity, non-tariff barriers, geopolitical concerns, and competition from other countries. Therefore, under its Connect Central Asian Policy (CCAP), India has undertaken a wide range of measures to strengthen its economic and investment ties with the nations in Eurasia. These measures include the establishment of Free Trade Agreements (FTAs), participation in multilateral forums like the Shanghai Cooperation Organization (SCO), the development of transportation corridors such as the International North–South Transport Corridor (INSTC), and engagement in bilateral discussions. India’s trade relations with the Eurasian countries, encompassing Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, and Uzbekistan have undergone a gradual transformation in line with the shifting political and economic landscape in the region. The Eurasian countries hold considerable importance for India owing to their strategic positioning, abundant natural resources, cultural affinities, and promising market prospects. Table 5.4 shows the trade between India and the Eurasian region (2000–2022) as follows. The analysis of trade patterns with Eurasian countries provides a comprehensive understanding of India’s trade direction. This information offers a logical explanation for the trade trends and patterns between India and Eurasia from 2000 to 2019, as shown in Table 5.5. Kazakhstan is the predominant country in the region. The value of Indian exports to Kazakhstan had a significant rise from US$ 38.64 million in 2000 to US$ 90.26 million in 2005, representing a growth rate of 133.59%. During the period from 2008 to 2013, there was a

38.64 54.45 45.60 55.53 90.69 90.26 86.62 93.74 131.59 133.93 146.22 236.12 262.96 275.73 237.9 168.37 125.03 118.50 138.59 202.59 225.96 235 436 12

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGR (%)

17.73 10.74 14.54 28.62 52.17 30.16 38.14 32.69 22.19 25.21 24.32 29.49 31.95 37.24 30.03 29.86 26.62 30.92 28.39 29.13 38.71 32.89 52.38 7

Kyrgyzstan 3.32 1.71 7.49 4.26 6.30 6.60 6.87 10.55 16.71 15.77 16.35 21.29 29.05 47.65 60.0 31.34 19.71 24.37 20.55 23.50 53.45 35.35 49.40 13

Tajikistan 5.43 4.15 7.59 16.42 17.45 20.36 26.52 37.95 40.25 35.88 28.85 39.36 70.60 63.00 100.73 80.46 57.24 59.63 42.20 33.90 60.34 104 90.29 13

Turkmenistan 8.83 7.12 4.91 14.00 16.60 26.54 27.74 36.89 44.34 50.86 56.59 87.82 110.16 119.82 168.28 107.82 90.74 130.70 194.90 180.21 280.07 271 283 17

Uzbekistan

Source UN COMTRADE Database 2023 Note Figures in parentheses show the percentage change in annual base and (CAGR): Compound Annual Growth Rate

Kazakhstan

Exports of India with Eurasian countries (US$ million)

Years

Table 5.4

11.67 10.68 8.64 12.28 30.79 28.81 24.57 25.78 33.80 29.91 38.65 71.62 87.16 123.89 110.42 33.38 40.27 33.68 43.46 53.21 50.81 36.62 101 10

Azerbaijan

889.01 798.18 704.00 713.75 631.26 733.15 903.69 940.61 1,096.34 980.69 1,689.43 1,778.27 2,295.68 2,121.26 2,097.01 1,587.81 1,937.06 2,113.39 2,389.47 3,017.58 2656.45 3254 3146 6

Russia

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Kazakhstan

14.57 11.154 11.16 10.8 13.96 23.48 76.11 70.5 142.99 146.6 157.49 122.56 163.99 441.84 924.99 337.54 320.36 1039.04 748.6 2256 804 325

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

4.56 0.56 0.48 0.47 0.46 0.77 1.72 0.84 0.94 0.62 1.03 0.73 2.29 0.65 0.48 1.58 1.48 30.83 2.59 1.33 5.16 1.79

Kyrgyzstan 1.45 1.38 0 3.1 4.2 5.12 9.57 6.93 14.6 18.03 22.41 6.74 15.87 0.56 3.61 9.87 14.69 47.47 14.84 0.29 1.06 10.74

Tajikistan 1.41 1.67 4.67 8.62 9.85 12.53 13.17 8.18 12.55 7.38 12.78 13.92 8.36 13.12 15.48 47.78 21.7 26.15 20.63 3.99 0.30 10.7

Turkmenistan

Imports of India with Eurasian countries (US$ million)

Years

Table 5.5

7.84 18.36 18.09 29.25 28.13 32.47 28.35 13.64 79.66 27.32 24.09 52.14 33.55 35.08 39.1 56.49 46.48 104.43 107.9 126.73 66.85 31.35

Uzbekistan 0.13 0.22 1.73 3.02 7.71 5.86 67.56 173.88 194.62 284.83 203.48 675 521.39 1,136.83 198.54 77.09 461.67 592.61 147.87 273.91 229 104

Azerbaijan

(continued)

517.66 535.51 592.61 959.63 1,322.74 2,022.19 2,409.05 2,478.16 4,328.28 3,566.79 3,600.02 4,764.31 4,231.56 3,894.40 4,249.22 4,584.98 5,552.30 5,552.30 5,840.44 7,093.01 5485.75 9869

Russia

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205 13

2022 CAGR (%)

4.19 −4

Kyrgyzstan 0.52 −5

Tajikistan 101.72 21

Turkmenistan 48.40 9

Uzbekistan 497 45

Azerbaijan

46,212 23

Russia

Source UNCTAD, FDI/TNC Database Note FDI flows with a negative sign indicate that at least one of the three components of FDI (equity capital, reinvested earnings, and intra-company loans) is negative (data for 2020 is not available yet on cite)

Kazakhstan

(continued)

Years

Table 5.5

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notable increase in Indian exports. The amount of US$ 131.59 million in 2008 increased to US$ 275.73 million in 2013. 2014 has seen a reversal of trends for a variety of reasons. The amount has decreased from US$ 237.90 million in 2014 to US$ 168.37 million in 2015. In a similar way, the exports from India to Kazakhstan had a dip in 2018, amounting to US$ 138.59 million. However, the number of exports has seen a growth, reaching a value of US$ 436 million in 2022. India’s second biggest export partner is Uzbekistan. The initiation of India’s exports to Uzbekistan began with a modest value of US$ 8.83 million in the year 2000. Over the course of the next five years, there was a significant growth of 200.56% in 2005, resulting in a total of US$ 26.54 million. Between the years 2008 and 2013, there was a significant rise in the amount, rising from US$ 44.34 million to US$ 119.82 million. This represents a growth of 170.23 percentage points. Nevertheless, there has been a notable decrease in Indian exports, with a reduction from US$ 168.28 million to US$ 107.82 million during the years 2014 and 2015. In the year 2018, the country had a significant increase in its exports, with a growth rate of 49.12%, resulting in a total value of US$ 194.90 million. Indian exports have had a no upward trend, reaching a substantial value of US$ 283 million in the year 2022. Turkmenistan experienced a notable growth in its export figures from US$ 5.43 million in 2000 to US$ 20.36 million in 2005, reflecting a substantial increase of 274.79%. India’s exports to Turkmenistan have shown a consistent upward trend, with a notable increase from US$ 40.25 million in 2008 to US$ 63.00 million in 2013, representing a growth rate of 56.52%. The country’s exports experienced a decline from US$ 100.73 million to 80.46 million during the period spanning 2014–2015. The data indicates a significant decrease in countries’ exports to Turkmenistan, specifically a decline of US$ 42.20 in 2018. The data indicates a notable surge of US$ 90.29 million in the year 2020. The bilateral trade relationship between India and Tajikistan has exhibited a persistent upward trend in terms of Indian exports to Tajikistan since the year 2000. The value of exports experienced a notable increase from US$ 3.32 million in 2000 to US$ 26.87 million in 2005, representing a growth rate of 106.92%. In the year 2008, the exports of the entity in question amounted to a total of US$ 16.71 million, which subsequently experienced a notable increase to US$ 47.65 million by the year 2013. The value of its exports experienced a decline from US$ 60.00 million in 2014 to US$ 31.34 million in 2015. Exports have experienced

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a notable decline of −37.10 percentage points since 2016, in comparison with the preceding year of 2015. Similarly, in 2018, there was a decline to the tune of US$ 20.55 million, whereas in 2022, there was an increase to the amount of US$ 49.40 million. In 2000, the total value of Kyrgyzstan’s exports amounted to US$ 17.73 million. However, by 2005, there was a notable increase in exports, reaching a total value of US$ 30.16 million, representing a growth rate of 41.21%. In 2006, India unveiled a noteworthy export partner, registering a value of US$ 38.14 million, which stands as the highest among the entire study period. The exports of the country experienced a slight decline, with a decrease from US$ 30.3 million in 2014 to US$ 29.86 million in 2015. From 2016 to 2018, there has been a decline in exports amounting to a value of US$ 28.39 million, representing a decrease of 8.18%. In contrast, there has been a marginal increase in exports, reaching the level of US$ 52.38 million in 2022. In 2000, the value of India’s exports to Russia amounted to US$ 889.01 million. However, by 2005, the value of exports had declined to US$ 733 million, representing a decrease of 17%. In 2008, India unveiled a noteworthy export partner, amounting to a substantial value of US$ 1096.34 million. In 2009, the country experienced a marginal decrease in its export figures, amounting to US$ 980.69 million. In contrast, the Indian export figures have exhibited a gradual upward trajectory, increasing from US$ 1689.43 million in 2010 to US$ 2295.68 million in 2012. Between the years 2013 and 2015, there was a notable decline in exports, amounting to a reduction of US$ 1587.81 million, representing a decrease of 25%. On the contrary, there has been a notable increase in exports, reaching a substantial amount of US$ 3017.58 million in the year 2019. In 2022, exports have rebounded to reach a total of US$ 3146 million, primarily influenced by the global economic deceleration and the COVID-19 pandemic. India’s export to Azerbaijan exports had experienced a notable increase from US$ 11.67 million in 2000 to US$ 28.81 million in 2005. In this trajectory, India’s exports have exhibited a consistent upward trend, surging from a value of US$ 33.8 million in 2008 to an impressive US$ 123.89 million in 2013, reflecting a remarkable growth rate of 266%. In line with prevailing patterns, the exports of various nations to Azerbaijan have experienced a significant downturn, amounting to a notable decrease of US$ 43.46 in the year 2018. Nevertheless, there has been an increase of US$ 101 million in 2012.

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Based on the analysis conducted, it has been observed that India’s exports to Uzbekistan exhibit the highest Compound Annual Growth Rate (CAGR) of 17%. Following closely behind are Tajikistan and Turkmenistan, both with a CAGR of 13%. Kazakhstan demonstrates a slightly lower CAGR of 12%, while Kyrgyzstan lags behind with a CAGR of 7%. In contrast, it is worth noting that Russia and Azerbaijan exhibit a Compound Annual Growth Rate (CAGR) of 6% and the values are distributed in a proportion of 10% each. Based on the most recent data, it can be observed that Uzbekistan holds the position of being the primary export partner for India within the Central Asian region. Following Uzbekistan, Kazakhstan emerges as the second largest export partner, succeeded by Turkmenistan, Tajikistan, and Kyrgyzstan. The analysis further indicates that Turkmenistan and Uzbekistan have demonstrated the most significant annual export growth rates throughout the entire duration of the study. Russia and Azerbaijan have both demonstrated notable export activity to India. India’s imports from the CARs are discussed in Table 5.5: The Indian imports from Kazakhstan registered US$ 14.57 million in 2000, which dramatically increased to US$ 76.11 million in 2006 by 422.37%. However, it has marginally decreased in 2007 to the value of US$ 70.5 million. Then, the same trends have been shown during 2008–2013, i.e. increased from US$ 142.99 million to US$ 441.84 million by 209%. After that, India’s imports have dipped from US$ 924.99 million to US$ 337.54 million from 2014 to 2015. In the meanwhile, imports of India from Kazakhstan dipped from 1039.04 (2017) to US$ 748.6 million (2018) with a difference of (224.33%), while, in 2022, imports slightly decreased by US$ 205 million. Though, at the beginning of 2000, the economic engagements between India and Uzbekistan were at the lowest level. The imports from Uzbekistan in 2000 stood at US$ 7.84 million. However, it has increased by the growth rate of 314.15% and reached the quantum of US$ 32.47 in 2005. The year of 2008 has witnessed the highest imports, i.e. US$ 79.66 million. In contrast, in the year of 2013, the imports have come down to the amount of US$ 35.08 million by (−55.96)%. The imports again have shown some positive trends during 2014–2015. It has increased from US$ 39.10 million in 2014 to US$ 56.49 million in 2015 by demonstrating 44.47% growth rate. Imports of India have continuously increased and reached a remarkable stage, i.e. US$ 107.90 million

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in 2018. However, in contrast, imports haves declined in 2022 by value of US$ 48.40 million. The value of Indian imports from Turkmenistan experienced a significant increase from US$ 1.41 million in 2000 to US$ 12.53 million in 2005, representing a growth rate of 788.65%. Between 2006 and 2007, there was a notable decrease in India’s imports, with the value dropping from US$ 13.13 million to US$ 8.18 million, representing a decline of approximately 37.88%. The figure has experienced a notable increase, reaching a value of US$ 13.92 million in the year 2011. The data indicates a significant increase in Indian imports from the Republic, with a growth rate of 208.65% points observed between the years 2014 and 2015. The value of imports rose from US$ 15.48 million to US$ 47.78 million during this period. The imports data from 2016 to 2018 exhibits fluctuations, with values of US$ 21.70 million in 2016, US$ 26.15 million in 2017, and US$ 20.63 million in 2018. The data indicates a significant increase in recorded imports, with a peak of 101 million units. The recorded value of India’s imports from Tajikistan in the year 2000 was US$ 1.45 million. In 2005, the aggregate worth of imports amounted to US$ 5.12 million, denoting a substantial growth of 71.67% as compared to the previous ones. The imports in India experienced a significant surge, resulting in a total value of US$ 14.8 million in the year 2008. The imports of India witnessed a notable deceleration, with a decline of US$ 0.56 million and US$ 3.61 million, during the fiscal year 2013–2014, primarily attributed to the impact of the civil war in Tajikistan. On the contrary, there has been a notable surge in Indian imports, with a recorded value of US$ 9.87 million in 2015, surpassing previous thresholds. Based on the empirical evidence, it can be inferred that there exists a persistent and coherent ascending pattern in the import levels of India throughout the recent years. In the year 2017, the recorded value of imports reached a noteworthy amount of US$ 47.47 million, showcasing a significant annual growth rate of 223.14%. The import value experienced a substantial decline of −68.73 percentage points in 2018. Based on the latest available data, there is a consistent downward trend observed in the ongoing year of 2022, with a specific value of US$ 0.52 million. The imports of India from Kyrgyzstan have been showing the lowest trends during the whole period of the study. During 2000, India received the lowest value of imports US$ 4.56 million. It showed a negligible record in 2001 with a value of US$ 0.56 million that is marginally increased to US$ 0.70 million in 2005 by 25%. Later on, during 2008,

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imports had risen from US$ 0.94 million to US$ 2.29 million by 143.6% in 2012. Also, it suffered in 2013 with a value of US$ 0.65 million. During 2014–2015, India’s imports from the country substantially enhanced from 0.48 to that of US$ 1.58 million by 229.16%. In 2017, India’s imports have risen at remarkable speed by 1613% points and reached at the level of US$ 30.83 million. However, the recent data shows declining trends during 2018–2019 from US$ 2.16 million to US$ 1.33 million whether imports data has shown some positive value, i.e. US$ 4.19 million in 2022. India’s imports from Russia have been accounted for US$ 517.66 million in 2000. During 2005, imports have been reached to the level of US$ 2022 million by 290% points. In these upward trends, the Indian imports have registered US$ 4328 million in 2008. During 2009–2010, imports of India have witnessed slow down, i.e. US$ 3566 million and US$ 3600 million. On the other hand, Indian imports have jumped to US$ 4584.98 million in 2015 which is higher than previously. The same increasing trend has shown in the year 2018, which registered a significant amount of India’s imports with a value of US $ 5840.44 million. But in the year 2019, it has increased by 21% (US $ 7093.01 million). However, the imports have declined with thevalue of US$46,212 million in the year 2022. The imports from Azerbaijan in 2000 stood at US$ 0.13 million. However, it has increased by remarkable growth and reached the quantum of US$ 7.71 million in 2005. The year of 2008 has witnessed the valuable imports, i.e. US$ 194.6 million. In contrast, in the year of 2013, there is highest amount of imports recorded, i.e. US$ 1136.83 million percent. However, imports have drastically declined during coming years. It has decreased from US$ 198.54 million in 2014 to US$ 77.09 million in 2015 by demonstrating 61% growth rate. Imports of India have increased during 2016–2017 with values of (US$ 461 million and US$ 592 million), respectively. However, in 2018, it has again slipped down and recorded US$ 147 million and reached a remarkable stage, i.e. US$ 107.90 million in 2018. Later on, Indian imports observed to be US$ 273.91 million in 2019, but it has increased by US$ 419 million in 2022. After analyzing India’s imports from the individual country, it has been found that the CAGR of India’s imports from Azerbaijan has measured significant growth rate 45% since study period and Russia 23% whereas, in terms of Central Asian countries, Kazakhstan (13%), Turkmenistan (21%),

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and Uzbekistan have accounted for a significant average share in Indian imports by 9%. But on the other hand, Kyrgyzstan and Tajikistan have recorded negative growth rate.

Trade Concentration Index After analyzing trade trends of India with Eurasian countries, the present study also finds the sectoral Hirschman Index which calculates the concentration of India in the products sector of Eurasia. “The said index estimates that if a country exports a large share of a few commodities or vice versa, if its exports are well distributed among many products. Therefore, it indicates a warning sign of low export diversification, by following economic vulnerabilities. Its evolution through different years calculates the changing productive structure of a country.”3 The sectoral Hirschman Index is defined as the square root of the sum of the squared shares of exports of each commodity in total exports for the region under the study. It takes a value between 0 and 1, wherein one indicates that only a single product is being exported. The higher values show that exports are more concentrated in fewer sectors or products. On the contrary, values closer to 0 reflect an equal distribution of market shares among the exporters. The lower is the HCI Index; the less concentrated are a country’s exports.  H j = sqr tsum

Xi Xt

2 

where X j = country j ’s exports of product i, X t = country’s total exports (at the two-digit SITC classification). If a value of H j = 1, t indicates that all exports of country j come from a single commodity, while a value of H j = 0 means that the country’s exports are homogeneously distributed among all products. Table 5.6 shows the country-wise measurement of India with Central Asian republics’ Trade Concentration Index. It has shown that India’s exports and imports of commodities have been more diversified (less concentrate) with Eurasia. The above analyses reached the conclusion that 3 Indicators Explained #3 Export Product Concentration Index. Retrieved from https://unctadstat.unctad.org/EN/IndicatorsExplained/statie2019d1_en.pdf. Accessed on 21 March 2020.

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India’s exports for commodities have incredibly concentrated towards Kazakhstan with the highest value of HCI in 2004, i.e. 0.22. On the other hand, during 2015, Kyrgyzstan holds the marginally significant value of HCI, i.e. 0.01 with India’s export commodities over the other countries except for Kazakhstan. The table also shows India’s Import Concentration Index for commodities with Eurasia by calculating individual countries data. It reflects that India’s imports are more diversified from the region with lowest values of the HCI Index. However, it is estimated that India is relatively more concentrated towards Russia followed by Uzbekistan and Turkmenistan during the whole study period. However, India’s HCI with Kazakhstan has been slowed down during the current period of 2022 for the given global economic crisis and heightening of the oil prices. Thus, the measurement of Trade Concentration Index found that India is less concentrated in the region’s export and import market. It has concentrated in a few sectors, and India is much diversified from the region which resulted from the HCI because its value always is less than one and close to zero.

India’s Investment in Eurasia With the given geostrategic advantages, rich energy resources and partially liberalized economy, the CARs have substantial scope for FDI inflow. In addition to this, there is great investment potential for establishing joint ventures in banking, construction, energy, IT, medicine, agriculture, education sector, etc. Realizing the FDI investment potential, India has been investing in several joint ventures in the above-mentioned sectors and has also signed many investments agreements and treaties. For instance, Kazakhstan’s Deputy Prime Minister Karibzhanov had visited India and signed an agreement on “Kazakhstan’s Investment Opportunities” in 2009. Also, Indian EXIM Bank creates line of credit by which Indian exports have been promoted. In Kazakhstan and Uzbekistan, EXIM Bank has also supported Indian industries and set up joint ventures in the pharmaceutical sector Department of Commerce (2006). In this ongoing process, both India and Kazakhstan finally concluded intergovernmental agreements of nuclear energy in 2009. Kapparov (2012) noted that India has been investing in Kazakhstan’s core sectors such as oil and gas machinery, agriculture, construction materials, food processing, textiles, tourism, transport, petrochemical industry, processing IT and

Kazakhstan

Kyrgyzstan

Source Calculated from UN COMTRADE 2023

2000 0.03 0.02 0.001 2004 0.03 0.02 0.001 2008 0.08 0.01 0.001 2013 0.03 0.01 0.01 2015 0.02 0.01 0.001 2019 0.02 0.03 0.01 2020 0.02 0.01 0.02 2021 0.01 0.01 0.01 2022 0.02 0.01 0.01 HCI of India’s Imports from Eurasian Countries 2000 0.02 0.009 0.003 2004 0.01 0.002 0.006 2008 0.02 0.001 0.007 2013 0.03 0.001 0.001 2015 0.03 0.002 0.005 2019 0.06 0.001 0.007 2020 0.04 0.003 0.002 2021 0.03 0.002 0.001 2022 0.03 0.001 0.001

Years

Tajikistan 0.01 0.01 0.01 0.01 0.01 0.02 0.07 0.06 0.06 0.01 0.02 0.01 0.001 0.01 0.01 0.006 0.001 0.001

0.004 0.009 0.006 0.005 0.01 0.003 0.001 0.001 0.01

Uzbekistan

0.001 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Turkmenistan

Trade concentration Index between India and Eurasian countries

HCI of India’s Export to Eurasia

Table 5.6

0.10 0.11 0.12 0.09 0.11 0.12 0.12 0.13 0.14

0.15 0.09 0.01 0.08 0.07 0.09 0.09 0.09 0.08

Russia

0.001 0.008 0.02 0.05 0.01 0.02 0.02 0.02 0.01

0.02 0.02 0.02 0.02 0.02 0.02 0.01 0.01 0.01

Azerbaijan

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biotech parks. Overall, these nations have great potential for Indian investment in the areas of, energy, IT, banking, construction, and food processing. Table 5.7 shows that Indian investment in joint ventures with CARs has been accounted for the period of 1996–2002; Uzbekistan has recorded US$ 25.73 million followed by Kyrgyzstan, Kazakhstan, and Tajikistan (US$ 7.98 million, US$ 4.44 million, and US$ 0.36 million). Turkmenistan did not find any place for Indian investment portfolio. During 2003–2004, India’s investment in joint ventures with Kyrgyzstan has been stood at highest level, i.e. US$ 74.96 million. On the other side, Uzbekistan stood at second place. However, it has remained at the limited value of US$ 0.16 million. It is worth mentioning that India has not pursued any joint ventures with Kazakhstan, while Tajikistan and Turkmenistan have received relatively low levels of investment during this time. However, improvement in the Indian economy has provided an opportunity to explore the investment opportunities. The Indian investment has increased consistently in Kazakhstan, reaching the level of US$ 44.00 million in 2004–2005, whereas on the other hand, Kyrgyzstan lost the previous position and the quantum of it had decreased. Tajikistan and Uzbekistan both have consistently received Indian investment in their joints, i.e. US$ 1.89 million in 2008–2009 and US$ 1.17 million in 2013–2014, respectively. From this analysis, it clearly indicates that Turkmenistan throughout the study period has remained at the lowest ebb of total quantum of the Indian direct investment with CARs joint ventures. Hence, Kazakhstan, Kyrgyzstan, and Uzbekistan are the important investment partners of India during the study period. However, significant data is not available for Russia and Azerbaijan except these years (2009–2010 and 2010–2011) for Russia. The investment relations between India and the Eurasian region have not painted a rosy picture when it is compared to the other regions/ countries for the given current geopolitical and geo-economic instability. The study also found the main sectors of regions’ states in which India is investing given below; Table 5.8 shows that the leading sectors are individual countries named Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia, and Azerbaijan.

4.44 0.1 74.96 44 9.6 10 NA 20.06 NA NA 2.49 0.85 0.05

1996–2002 2002–2003 2003–2004 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 2011–2012 2012–2013 2013–2014

7.98 0.15 NA 2.75 2 NA NA 0.97 0.3 NA 1.99 0.57 NA

Kyrgyzstan

Source Based on RBI Database Note NA, data not available for further years

Kazakhstan 0.36 NA NA 0.04 NA 3.96 NA 1.62 1.89 NA NA NA NA

Tajikistan

Indian investments in joint ventures in Eurasia

Years

Table 5.7

NA NA NA NA NA NA NA NA NA 0.6 NA NA NA

Turkmenistan 25.73 1.56 0.16 0.18 0.03 0.07 0.33 1.43 0.08 0.28 0.21 0.04 1.17

Uzbekistan

NA NA NA NA NA 25 1 306 NA 4 1 NA NA

Russia

NA NA NA NA NA NA NA NA NA 1,596 NA 814 NA

Azerbaijan

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Table 5.8 Sectors in which India invested in the Eurasian Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan

Russia

Azerbaijan

Manufacturing Manufacturing Wholesale Construction Manufacturing Manufacturing Retail Trade Financial, Construction Manufacturing Construction Construction Construction Insurance, Real Estate Business Financial, Restaurants Business Restaurants Business Services Insurance, and Hotels Services and Hotels Services Real Estate Source Based on RBI Database, 2022 Note Not available regarding Turkmenistan

Challenges of Economic Relations Between India and Eurasia From the above discussion and analysis, it is evident that India and Eurasian countries are emerging as economic partners. However, there are several challenges that hinder the progress of their economic partnership, particularly in terms of economic cooperation. Both regions have failed to fully exploit the potential, primarily due to issues such as connectivity, a lack of economic reforms, and insufficient reforms in the financial sector. According to Raiser and Dobronogov (2006), it was argued that there is no direct trade route between the two regions. In his work, Kishan (2009) emphasized the primary factors contributing to the delicate economic collaboration between two regions. These factors include political obstacles, limited connectivity, and conflicts with regional powers, particularly Pakistan and Afghanistan. In this context, Agrawal and Sangita (2013) have recognized additional political and strategic challenges in both scenarios. Afghanistan, situated in a geostrategic position between India and Eurasian region, finds itself plagued by the pervasive presence of terrorism and fundamentalism. India’s exchange of goods and services with the region were hindered due to the volatile situation in Afghanistan and tense relations with Pakistan. India’s economic engagements with the Eurasian region face certain challenges, primarily stemming from the presence of Russia and China in the region. The Eurasian region is currently under the influence of Russia and China, who hold significant power. However, it is important to note that these two nations have their own distinct strategic and economic

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objectives, which may not necessarily coincide with those of India. Russia displays caution towards India’s expanding alliance with the United States and its associates, whereas China stands as India’s primary competitor in both regional and global contexts. The potential perception of India’s engagement in the region by both nations could be interpreted as a challenge to their established authority and overall safety (Jiang, 2020, January 23; Bansal, 2021, February 9). The regional integration initiatives of Russia and China, namely the Eurasian Economic Union (EAEU) and the Belt and Road Initiative (BRI), have been implemented with the objective of strengthening economic connectivity and fostering cooperation among the Eurasian nations. The introduction of these initiatives could potentially present obstacles for India’s ability to tap into the markets and resources of the region. Additionally, they have the potential to generate competition and conflicts in terms of both geopolitics and geo-economics (Lakshminarayanan & Yepremyan, 2023, pp. 81–100). In light of these circumstances, it is imperative for India to embrace a well-rounded and practical strategy in order to establish connections with the Eurasian region. This approach must carefully consider the potential advantages and obstacles presented by both Russia and China. In order to bolster its economic and strategic influence in the region, India ought to consider broadening its alliances and collaborations with various regional players, including but not limited to the European Union, Iran, Turkey, and Afghanistan. This move towards diversification would enable India to expand its reach and impact in the region.

India and Eurasia: Economic Potential Areas The economic interactions between India and Eurasia have a rich history, although they have been negatively impacted by factors such as colonial rule and geopolitical shifts. Both regions have made efforts to strengthen their trade and investment connections using different approaches, including preferential trade agreements, collaborative commissions, and transportation routes. Nevertheless, there are several areas where cooperation could be explored to unlock the untapped potential of economic collaboration. These areas include addressing the challenges of land connectivity, enhancing security measures, reducing tariff and non-tariff barriers, and effectively managing competition from other actors, particularly China.

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Potential areas of cooperation between India and the Eurasian region include addressing energy security concerns, enhancing market access, promoting regional stability, and mitigating the influence of China. Nevertheless, India encounters various challenges in achieving its objectives, including the hindrance posed by Pakistan, the instability in Afghanistan, the impact of Iran’s sanctions, the ambivalence of Russia, and the limited capacity and diversification of Central Asian countries. In order to address these challenges, it is important for India to adopt a proactive and pragmatic approach that seeks to maintain a balanced relationship with all the parties involved in the region. The study has recognized several possible avenues to strengthen its economic involvement of India with the Eurasian region, including but not limited to energy, agriculture, pharmaceuticals, IT, tourism, and education. In addition to that, India could explore the possibility of utilizing its expertise in these sectors to provide technical support and enhance the capacity of the Eurasian partners. India may consider exploring potential areas of cooperation with the Eurasian Economic Union (EAEU) and its member states, such as the conclusion of Preferential Trade Agreements (PTAs) and Free Trade Agreements (FTAs). Potential areas of cooperation could involve the reduction of both tariff and non-tariff barriers, the promotion of smooth movement for goods and services, and the establishment of a favorable climate for trade and investment. The economic relationship between India and the broader Eurasian region encompasses a wide range of areas that present significant potential for growth, development, and mutual benefit. These areas include goods and commodities, pharmaceuticals, the automotive sector, infrastructure development such as transportation, energy, technology and innovation, IT and software, research and development, agriculture and food security, food processing, tourism and culture, cultural exchange, education and skill development, regional collaboration, and financial services. The successful realization of this potential would, however, necessitate the careful consideration of various challenges, including geopolitical concerns, infrastructural bottlenecks, and bureaucratic hurdles. However, it is important to acknowledge that there is significant potential for economic engagement between India and Eurasia, which could lead to a mutually advantageous partnership.

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Conclusion The trade relations between India and Eurasia have been discussed in the chapter. While both regions had experienced strong economic interactions, however, these engagements were weakened during the period of colonial rule and later on with the rapidly changing of global geoeconomic and geopolitical landscape. Efforts have been made to establish economic connections in light of the reemergence of the CARs as an independent countries. Nevertheless, these endeavors have been influenced within the diverse geopolitical and geo-economic landscapes of international politics. Both regions, India and Eurasia, have initiated the process of formalizing economic engagements through various mechanisms in order to enhance trade. Negotiations have been initiated at various levels. Numerous agreements and MoUs have been signed, and multiple joint programs have been initiated. In addition to these steps, leaders from both regions have been making reciprocal visits. Trade and investment have begun to experience growth, albeit at a slow and steady pace. The relationship between the two sides has been steady and as a result, various sectors including banking, investment, and construction projects have been identified as areas where FDI can be increased. India has been actively involved in offering technical support to the business and IT sectors in Eurasia. Upon careful examination of the trade volumes in both regions, it is evident that the data clearly illustrates that the bilateral trade between Indo-CARs during the specified period commenced with marginal amounts. Over time, there have been somewhat improvements in trade and investment between the two regions, although these improvements have not been substantial. The data revealed that fluctuations throughout the study period, with variations occurring at different points in time. Trade with India is currently experiencing a decline, with exports and imports both being affected. This suggests that India’s imports are surpassing its exports. The region has maintained a favorable balance of trade. The analysis of India’s country-wise relations reveals that Russia and Kazakhstan are the primary trading partners for India among the regional countries. After India’s primary trade partner, Uzbekistan holds the position of the second largest trade partner, with Turkmenistan, Azerbaijan, Tajikistan, and Kyrgyzstan following suit in terms of importance.

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The authors have used the Hirschman Trade Concentration Index (HTCI) to analyze the diversification of import and export goods. The findings of the study suggest that India’s exports and imports of commodities show a lower level of concentration or a higher degree of diversification when compared to CARs. Additionally, it has been demonstrated that India’s exports show a higher level of concentration with Kazakhstan, while their impact on other countries is deemed insignificant. Furthermore, India’s export has shown a concentration in select sectors of the automobile market. The level of investment relations between India and Eurasia is currently at its lowest point. India has maintained Kazakhstan, Kyrgyzstan, Uzbekistan, and Russia as significant investment partners during the study period. The study clearly indicates that India has placed significant emphasis on joint ventures as opposed to direct investment in the region. The study also identified certain sectors in which India began investing in the region. The sectors that encompass manufacturing, construction, real estate, business services, and wholesale retailers, among others, are the focus areas. The current study also provided an explanation for the limited trade and investment ties between the two regions, citing factors such as insufficient land connectivity and a lack of economic and financial sector reforms in the area. Furthermore, the relations between the two regions have been significantly influenced by geostrategic and geopolitical factors. China and the United States are the primary countries actively involved in the region. Many projects in various sectors such as commercial and business, security, and energy have already been developed by these countries. Hence, India has been fiercely competing with these nations in order to secure its participation in the region. However, it is worth noting that Iran, Afghanistan, and Pakistan hold significant influence in the region, although their relations with India have been tense. Therefore, these issues created a barrier in terms of maintaining strong economic and trade relationships with the region. However, the study identified certain regions that demonstrate their potential for fostering trade and economic collaboration. Opportunities for both nations can be identified, such as the Free Trade Agreement and various investment projects including industries, hotels, educational institutions, the IT sector, as well as new rail and link roads. These initiatives would enhance investment and trade relations between India and the mentioned nations. In addition to that, the prospects for Indo-Eurasian economic cooperation are

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also enhanced by the implementation of TAPI, IPI, and Chabahar Port, among other initiatives. After analyzing the chapter, several potential policy recommendations or suggestions emerge for improving the trade relations between India and Eurasia. India ought to consider exploring new possibilities for trade and investment with the Eurasian countries, particularly in sectors like energy, agriculture, pharmaceuticals, IT, tourism, and education. India should utilize its strengths in these sectors to provide technical assistance and capacity building to its Eurasian partners as well. India should actively seek to finalize Preferential Trade Agreements (PTAs) and Free Trade Agreements (FTAs) with the Eurasian Economic Union (EAEU) and its member states. These agreements aim to decrease both tariff and non-tariff barriers, streamline the flow of goods and services, and establish a favorable climate for trade and investment. India should consider strengthening its land connectivity with the Eurasian region through active involvement in the development of various transport corridors, including the International North–South Transport Corridor (INSTC), the Chabahar Port, and the Ashgabat agreement. The implementation of these corridors would result in a decrease in transit time and trade costs, while also enhancing access to untapped markets. India ought to enhance its economic and financial collaboration with the Eurasian nations through the establishment of various bilateral mechanisms, including joint commissions, intergovernmental committees, business councils, and chambers of commerce. These mechanisms aim to address and overcome the issues and challenges encountered by traders and investors, while also fostering mutual understanding and trust. To enhance its relationship with the Eurasian countries, India should consider bolstering its engagement in both the public and private sectors. This can be achieved through the organization of various events such as trade fairs, exhibitions, seminars, workshops, and cultural events on a regular basis. These events would serve as a platform to highlight the potential and possibilities of trade and investment, while also promoting interpersonal connections and cultural interactions.

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References Agrawal, P. & Sangita, S. (2013). India And Central Asia: Trade Routes And Trade Potential (Institute of Economic Growth No.334). Accessed at: https://ideas.repec.org/p/awe/wpaper/334.html Accessed 7th December, 2023. Akhmetov, A., & Suleimenova, A. (2019). Foreign Direct Investment in Eurasia: Trends and Prospects. Journal of Eurasian Studies, 10(2), 135–143. Asian Development Bank Institute. (2014). Connecting Central Asia with Economic Centres. Japan. https://www.adb.org/sites/default/files/public ation/159307/adbi-connecting-central-asiaeconomic-centers-final-report.pdf. Accessed 2 June 2016. Bhat, M. N., Ikram, F., & Rahman, M. N. (2023). Foreign Direct Investment and Imports in India: Exploring Institutional Dimensions. Journal of the Knowledge Economy, 1–32. Daly, J. C. K. (2015). Kazakhstan Looks to India, Iran for Access to the World’s Oceans. Eurasia Daily Monitor, 12(217). https://jamestown.org/program/ kazakhstan-looks-to-india-iran-for-access-to-the-worlds-oceans/ Horimoto, T. (2017). Explaining India’s Foreign Policy: From Dream to Realization of Major Power. International Relations of the Asia-Pacific, 17 (3), 463–496. Jaffrelot, C. (2003). India’s Look East Policy: An Asianist Strategy in Perspective. India Review, 2(2), 35–68. Kapparov, K. (2012). Kazakhstan’s Investments in Central Asia. Institute of Public Policy and Administration (Institute of Public Policy and Administration Working Paper No. 14). https://papers.ssrn.com/sol3/papers.cfm?abs tract_id=2943865. Accessed 18 Apr 2017. Kaushal, L. A. (2021). Impact of Institutional and Regulatory Quality on FDI Inflow: Case of a Developing Indian Economy. Cogent Economics & Finance, 9(1), 1985201. Lakshminarayanan, R., & Yepremyan, T. (2023). Armenia-India Partnership: Geopolitical and Geo-economic Implications in the Eurasian Context. Asia Europe Journal, 21(1), 81–100. Libman, A., & Vinokurov, E. (2018). Eurasian Integration: Challenges of Transcontinental Regionalism. Springer. Malik, I., & Mir, M. A. (2012). India’s Trade Relation with Kazakhstan: Challenges and Prospects. National Monthly Refereed Journal of Research in Commerce & Management, 1(12), 67–81 Mavlonov, I. R. (2006). Central Asia and South Asia: Potential of India’s Multilateral Economic Diplomacy in Inter- Regional Cooperation. Strategic Analysis, 30(2), 424–448.

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Michael, T. (2015). Turkmenistan Poised for TAPI Breakthrough. CACI Analyst. http://cacianalyst.org/publications/analyticalarticles/turkm-enistanpoised-for-tapi-breakthrough.html. Accessed 25 Dec 2015. Panagariya, A. (2006). India in the 1980s and 1990s: A Triumph of Reforms (IMF Working Paper (04/43)). http://ideas.repec.org/p/imf/imfwpa/0443.html. Accessed 23 Nov 2015. Pant, H. V., & Passi, R. (2017). India’s “Act East” Policy: From vision to action. In India’s Foreign Policy: Surviving in a Turbulent World (pp. 131–148). World Scientific Publishing Company. Paswan, N. (2015). India and Central Asia: Deepening Economic Cooperation. APH Publishing Corporation. Raiser, M., & Dobronogo, A. (2006). Economic Cooperation in the Wider Central Asia Region. World Bank Publications. Roy, M. S. (2012). India and Tajikistan: Building a long-term strategic partnership. IDSA. http://www.idsa.in/idsacomments/IndiaandTajikistanBuildinga longtermStrategicPartnership_MeenaSRoy_180912. Accessed 2 June 2014. Sachdeva, G. (2010). Regional Economic Linkages. In N. Joshi (Ed.), Reconnecting India and Central Asia Emerging Security and Economic Dimensions. Central Asia-Caucasus Institute and the Silk Road Studies Program. Seetha. (2012). An Audit from a Liberal Perspective. In K. Rao (Ed.), Preceding of the Indian Economic Liberalisation Story: An Audit from a Liberal Perspective in a Seminar. Shubham Print & Web. www.freedomfirst.in//pdf/the-ind ian-economic-libralisation-story.pdf. Accessed 27 Nov 2015. Zafar, A. (2015). India-Central Asia: Finding New Synergies for Greater Engagement (ICWA Policy Brief). www.icwa.in/pdfs/PB/2014/IndiaCentralAsiaPB 09072015.pdf. Accessed 19 Feb 2015.

CHAPTER 6

Indo-Eurasia Relations: Contextualizing the Energy Economics

The primary objective of this chapter is to analyze the energy collaboration between India and the Eurasian region from the perspective of energy economics. This study investigates the potential for India to diversify its energy portfolio through engagements with alternative markets. Moreover, the chapter explores the mutual advantages and difficulties that emerge from these energy collaborations. This chapter presents a thorough energy economic analysis that offers valuable insights into potential strategies for enhancing India’s energy security and promoting regional economic stability in the Eurasian context. Energy economics is a field within the jurisdiction of economics that focuses on examining the processes of energy production, consumption, and distribution on a global scale. Therefore, energy economics has emerged as a significant affair in today’s global geopolitical and geo-economic landscapes. Over the past three decades, energy consumption has doubled as a result of industrial and economic developments in various countries. Hence, there has been a significant increase in the demand for energy following the transition of economies from an agrarian to industrialized ones. Therefore, energy has had a significant impact on the global geopolitical and geo-economic landscape on account of energy geopolitics. In this particular context, Yumkella (2010, p. 7) made the argument that countries should strive to broaden their energy sources in order to bolster productivity, improve competitiveness, and foster © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3_6

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economic growth. According to World Economic Forum (2012, p. 2), the significance of energy cannot be underestimated. Voser emphasizes that energy serves as the “Oxygen of the Economy,” supplying lifelines to economies. Without energy, no system can thrive. Given this context, countries worldwide sought to obtain the energy resources in order to safeguard their energy security. According to Brenner (2012, p. 1), the current diplomatic foreign and energy policies are being shaped by the intersection of energy’s political geography, in light of the exponential increase in energy demand. Hence, it has impacted not only the economy but also international relations. In the present energy security landscape, India is also seeking to meet its demand for both conventional and non-conventional energies. Hence, it can be observed that India relies on importing a significant amount of crude oil and natural gas from energy-rich countries. In this context, the Eurasian region homes to a significant quantity of energy resources. Specifically, Kazakhstan, Turkmenistan, and Uzbekistan are the primary countries that possess these valuable energy products. Hence, India has the chance to expand its demand by entering alternative energy markets. In this context, the current chapter examines the energy cooperation between India and the CARs through the lens of energy economics. In order to achieve this objective, the researcher has examined the disparity between India’s consumption and production of energy, the energy profile of Eurasian region, and the collaboration in energy between these regions, as well as the energy economics and potential for cooperation. The chapter discusses the energy economics of India and Eurasian region, specifically focusing on India’s energy imports from the region. It also presents data on the oil prices of the CARs, the Organization of the Petroleum Exporting Countries (OPEC), and international oil prices in the global energy market. Since the oil crises in 1973, energy economics has emerged as a significant issue in international politics. Hence, it is crucial to comprehend and conceptualize the term Energy Economics. The field of energy economics primarily encompasses various aspects such as energy production, consumption, cost analysis, pricing mechanisms, investment strategies, market dynamics, and the transportation infrastructures. According to Sweeney (2002, p. 2), the research focuses on examining the functions of alternative markets and the monitoring systems associated with them, as well as analyzing their effects on economic distribution and the environment. Additionally, it analyzes the economically efficient

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supply and utilization of energy products, resources, and factors that deviate from achieving economic efficiency. Bhattacharya (2011, p. 2) has provided an explanation in this context, stating that the focus is on the crucial economic matter of allocating limited energy resources within the economy. Additionally, the author divides the description into two sections: a microeconomic analysis and a macroeconomic analysis of the energy resources. In microeconomic analyses, the focus is solely on the examination of the demand and supply of energy products. On the other hand, macroeconomic analyses focus on investment, financing, and the economic connections to the rest of the economy. Hence, this chapter focuses on analyzing the energy economics of India and Eurasia by examining the production, consumption, and prices of energy products.

Indo-Eurasia: Energy Complementarities and Cooperation Since the implementation of Liberalisation Privatisation Globalisation (LPG), India has undergone a significant economic transformation, transitioning from a stagnant growth rate known as the “Hindu growth rate” to becoming the world’s fastest-growing economy. India, a powerhouse in the global economy, has been making remarkable strides as one of the fastest-growing and largest economies on the planet. In 2023, its nominal GDP reached an impressive $3.75 trillion, solidifying its position as a major player in the economic landscape (Sharma, 2023, August 31). India, in recent times, has achieved the remarkable feat of becoming the fifth largest economy globally, surpassing both France and the United Kingdom. In 2023, India experienced a commendable GDP growth rate of 7.2%. This growth was primarily fueled by the impressive performance of the services sector and a resilient level of consumption (The Times of India, 2023, May 31). Consequently, overall demand of India for energy has been steadily increasing as a direct result of its expanding and growing economy. Based on the findings of Jain and Ummat (2015), it is stated that India holds the distinction of being the most populous country, accounting for 17% of the global population. However, in terms of natural resources, specifically oil, gas, and coal reserves, India possesses only 0.4% of the world’s total reserves for each of these resources. According to the International Energy Agency (2023), it is projected that India’s energy consumption will experience a greater increase compared to Europe and

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Organisation for Economic Co-operation and Development (OECD) countries by the year 2040. As a consequence, India is becoming one of the largest energy-dependent countries in the world. The Eurasian region possesses significant reserves of oil, natural gas, and uranium. These reserves are primarily located in the three former Soviet Republics, namely Kazakhstan, Turkmenistan, Uzbekistan, Russia as well as in Azerbaijan. As an example, it can be noted that Kazakhstan, being the ninth-largest country, the same possesses abundant natural resources. According to the International Energy Agency (2021), it was estimated that the Kazakh Republic had a petroleum production of 1.70 million barrels per day. It was anticipated that Kazakhstan’s production would experience a significant boost, reaching 1.80 million barrels per day by 2020. This growth was primarily attributed to the ongoing development of the massive Kashagan field. Turkmenistan possesses abundant natural gas resources and produce 2.91 trillion cubic feet (Tcf) of natural gas in 2023, which places it at the 13th position globally. Turkmenistan also possesses the world’s sixth-largest proven natural gas reserves, which are estimated to be approximately 617.3 trillion cubic feet (Tcf). Turkmenistan exports the majority of its natural gas to China, Russia, and Iran. Uzbekistan possesses a significant natural gas sector. According to the International Energy Agency (IEA), Uzbekistan ranked as the thirdlargest producer of natural gas in 2023, having produced 2 Tcf of natural gas. Uzbekistan also possesses significant reserves of hydrocarbons, which are estimated to be approximately 65.4 billion barrels of oil equivalent. Uzbekistan supplies natural gas to its domestic market as well as to neighboring countries, including Kazakhstan, Kyrgyzstan, Tajikistan, and Afghanistan. Kyrgyzstan and Tajikistan are two countries that possess a significant potential for hydroelectric generation. It is said that that Kyrgyzstan and Tajikistan possess the largest basins for hydroelectric generation in the region. These basins are capable of meeting 90% of the world’s demand. Kyrgyzstan possesses an installed hydropower capacity of 3.8 gigawatts (GW), representing 90% of its total electricity generation. Tajikistan has an installed hydropower capacity of 5.2 GW, accounting for 98% of its electricity generation (Mukhamedova & Wegerich, 2022, p. 7823). Both countries are developing new hydropower projects in order to enhance their energy security and export potential.

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With its available large quantity of crude oil and natural gas, Russia has established itself as a highly export-oriented economy in these sectors. Russia ranked as the third-largest producer of petroleum products, with a daily output of 11.2 million barrels (b/d). Additionally, it held the position of the second-largest producer of dry natural gas, with a production of 21 trillion cubic feet (Tcf). In 2023, Russia served as the primary exporter of oil and gas to Europe, accounting for one-third of the crude oil imports of EU countries and approximately 70% of the natural gas imported from Russia. Russia held the position of the fourth-largest nuclear power generator globally and had the fifth-largest installed nuclear capacity (Adolfsen et al., 2023). Sachdeva (2010, p. 266) has emphasized that Eurasia has played a crucial role in diversifying and expanding Indian imports, primarily because of its comparatively superior energy reserves. The region shows promising prospects for future energy collaboration with India. As a result of this, numerous Indian companies have been involved in the energy sector of Eurasia, specifically for the purpose of extracting oil and gas. According to Schaffer and Hate (2007, p. 1), it was observed that two prominent Indian industries, namely Indian Oil and Natural Gas Corporation Videsh Ltd (ONGC) and Bharat Heavy Electricals Limited (BHEL), currently hold a 15% ownership stake in the Alibekmola oil field in Kazakhstan. A joint investment of US$ 1.5 billion has been announced by these companies for the Kurmangazy oil field in the Caspian Sea, which is shared by Russia and Kazakhstan. Additionally, India has obtained a 25% interest in Kazakhstan’s Satpayev offshore exploration block, which is estimated to have been acquired for a sum of US$ 5 billion. However, India is also closely monitoring Turkmenistan for the purpose of importing natural gas through the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. In a similar way, it was observed by Pant (2015) that India has demonstrated its interest in Uzbekistan through the signing of an agreement pertaining to the import of over 2000 tonnes of uranium. Therefore, the ongoing energy projects between India and the Eurasian region will contribute significantly to meeting India’s energy demand effectively. However, due to the turbulence in the Middle East Asia region, which is the primary source of energy demand, the Eurasian region has emerged as a feasible alternative for meeting this demand. However, India has also been facing certain geostrategic, geopolitical, and geo-economic challenges.

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In this chapter, the authors have examined the global reserves and consumption to gain insight into the energy efficiency and gap. Energy is indeed becoming a pressing concern worldwide in the current scenario. Additionally, it provides an explanation regarding the world’s primary energy consumers, with India holding a significant position within this group. Therefore, the present chapter described energy (Crude oil and natural gas) profile of World, OPEC, and India. It has also analyzed the production and consumption pattern of such economies which may be showing some remarkable results regarding energy economics between India and Eurasia. However, a study on the prices of oil and gas has explored that Eurasia as an alternative option for India that can adequately meet its energy needs, specifically in terms of crude oil and natural gas.

World’s Energy Profile Energy plays a crucial role in driving the economic and infrastructural growth of the global economy, economic, social, and political development, especially in the face of dynamic industrial and technological changes. Consequently, it ensures an increase in the utilization of oil, natural gas, nuclear energy, and electricity (specifically hydro energy). Currently, the entire world is actively engaged in the production of both renewable and non-renewable energy resources. On the other hand, it is important to note that every country has not owned much minerals and natural resources to meet their demands. As a result, these countries imported energy from other countries that hold a significant amount of energy reserves. According to the U.S. Energy Information Administration (2021), it was estimated that there has been a significant increase in the demand for energy worldwide since 2012. According to projections, it is anticipated that by 2040, approximately 78% of the global energy demand will be met by liquid fuels, natural gas, and coal. In light of this situation, countries and regions abundant in energy have been the focus of global initiatives and efforts to establish connections. Table 6.1 depicts the oil production and consumption trends during the period of 2000–2022, with measurements expressed in thousands of barrels per day. The primary observation is that there has been a general upward trend in both oil production and consumption over the course of this 22-year period, although there have been intermittent fluctuations.

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Table 6.1 World’s oil and gas production and consumption Years

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Oil production

Oil consumption

(Thousand pb/d)

(Thousand pb/d)

74,922 75,162 74,922 77,605 80,916 81,896 82,487 82,277 82,818 81,182 83,283 84,097 86,218 86,591 88,834 91,670 91,989 92,568 94,852 94,961 88,391 89,877 93,848

76,988 77,863 78,763 80,569 83,368 84,726 85,728 87,087 86,578 85,700 88,765 89,790 90,663 92,049 93,109 95,008 94,381 96,099 97,265 97,598 88,477 94,088 97,309

Natural gas production (Billion Cubic Metric)

Natural gas consumption (Billion Cubic Metric)

2421 2487 2538 2632 2717 2791 2891 2965 3072 2983 3209 3300 3363 3411 3463 3539 3552 3676 3853 3976 3854 4037 4044

2422 2463 2533 2602 2696 2774 2858 2969 3051 2971 3201 3249 3333 3393 3410 3469 3559 3654 3838 3904 3823 4038 3941

Source BP Statistic Review of World Energy Workbook (2022)

The world oil production has been recorded 74,922 thousand pb/d since 2000, and it has been increased in 2004 with 80,916 thousand pb/d by 8% growth rate. Its production has been consistently increasing during the following years and recorded a significant amount of oil was 82,818 thousand pb/d in 2008. The era of stability was interrupted by the global financial crisis of 2008–2009 and its output has slightly decreased by (−1.97%). Although, there were some minor variations, the overall trends during the pre-2008 era appeared to be consistently upward. In contrast, production of world’s oil raised significantly in 2013 with 86,591 thousand pb/d to 91,670 thousand pb/d by 5.86% annual growth in 2015.

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However, during 2000–2008, the global oil market displayed a state of relative stability, characterized by gradual and consistent growth in production until around 2019, when the post-2009 era demonstrated a resilient recovery. Therefore, during 2011–2019, oil production has been significantly increased by 12% up to the level of 94,961 thousand pb/ d. However, with the effect of COVID-19, it has been slightly decreased since 2020, i.e. 88,391 thousand pb/d, but after that, the production of oil recorded a remarkable increase of 6% and reached the level of 93,848 thousand barrels per day in 2022. In terms of consumption of oil, the world’s consumption of oil stood at 76,988 thousand pb/d in 2000 which has been increased in 2004 with 80,569 thousand pb/d by 4.65%. Its consumption has been raised continuously from 2005 to 2007, i.e. (84,726 thousand pb/d to 87,087 thousand pb/d) respectively. However, its consumption has been declined during 2008–2009 from 86,578 thousand pb/d to 85,700 thousand pb/ d by (−1.02%) with the effect of the slowdown of economies due to the financial crisis or oil prices shock at that time. In contrast, the consumption of oil increased in 2013 from 92,109 thousand pb/d to 95,008 thousand pb/d, in 2015 by 3.14%. However, it declined in 2020 due to COVID-19, with a value of 88,477 thousand pb/d. But these trends are not continuously in process, as depicted by the figures given in the table. It shows that consumption has remarkably increased by 10% from 88,477 thousand pb/d to 97,309 thousand pb/d. Thus, the overall data shows that there was a major disruption occurred in 2020 as a result of the COVID-19 pandemic, which had significant impacts on global economic activity. The magnitude of the economic downturn was reflected in both production and consumption figures during the year. Surprisingly, the data for 2021 and 2022 show a strong recovery by 4% (production) and 3% (consumption). Not only the numbers improve, but production in 2022 even exceeded its peak in 2019, indicating a resilient oil market. During 2009–2022 production, the one notable feature is the shrinking gap between production and consumption over time. Initially, the data showed that consumption was outpacing production, but this gap has narrowed significantly in recent years. Table 6.1 shows the global trends in production and consumption of natural gas, which have been steadily increasing since 2000. Gas production was 2421 bcm in 2000 and increased to 2717 bcm in 2004, representing a 12.22% increase. The amount increased in subsequent

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years, rising from 2791 bcm in 2005 to 3072 bcm in 2008. It experienced a slowdown at the rate of −2.89% in 2009, owing primarily to global economic stagnation. The global gas production has been increasing, reaching a significant amount of 3411 bcm in 2013, and increasing by 3.75% in 2015. Global natural gas production was 3853 bcm in 2018, and this figure is expected to rise to 3854 bcm in 2020. In 2022, the annual manufacturing capacity has been increased to 4044 bcm. In terms of global gas consumption, it was 2422 bcm in 2000 and reached to 2696 bcm in 2004 at the rate of 11.31. Gas consumption has steadily increased over the years, rising from 2774 bcm in 2005 to 3051 bcm in 2008. However, due to the fragile growth of economies in 2008, its consumption decreased by −2.62% in 2009. Following that, the gas consumption increased to 3393 bcm in 2013, with a subsequent increase to 3469 bcm in 2015, representing a 2.22% growth rate. Gas consumption decreased from 2018 to 2020, with the volume falling from 3838 to 3823 bcm. Gas consumption increased in 2021, reaching 4038 bcm. On the other hand, its consumption is expected to fall in 2022, to 3941 bcm. The data pertaining to gas production and consumption reveals a negligible disparity between the observed trends. This implies that the annual growth rate of global gas production has been exceeded its consumption rate. Nevertheless, it is important to acknowledge that there has been no substantial growth in the worldwide production of oil and gas when compared to their consumption levels. Therefore, it is increasingly imperative for the global community to augment its oil and gas reserves in order to efficiently address the expanding discrepancy between the production and consumption of these crucial energy resources. The data presented in Table 6.2 illustrates the yearly. The provided tabular data illustrates the yearly output of crude oil in Saudi Arabia, Iran, Iraq, Kuwait, the UAE, and Qatar spanning the period from 2000 to 2022, denoted in thousands of barrels per day. The aggregate crude oil output of these six countries witnessed a rise from 22,925 thousand barrels per day in 2000 to 28,368 thousand barrels per day in 2022, revealing an average annual growth rate of 1.3%. On average, Saudi Arabia held the leading position with respect to crude oil production among the six countries, with its production accounting for 41.4% of the total output. The production levels of Saudi Arabia experienced fluctuations between 2002 and 2016, ranging from 8810 thousand barrels per day to 12,406 thousand barrels per day. On

2582 2409 2040 1318 2021 1889 2009 2097 2385 2399 2398 2624 2979 3051 3364 4031 3986 4423 4538 4632 4779 4102 4520

2201 2126 2030 2268 2515 2672 2672 2603 2728 2506 2449 2681 2784 2799 2767 3096 1933 1938 1882 1898 1863 2741 3028

2572 2500 2387 2661 2767 2845 2948 2948 3047 2795 2815 3216 3401 3444 3474 3902 3898 4038 3910 3912 3999 3668 4020

Source BP Statistic Review of World Energy Workbook (2022)

3765 3800 3524 3833 4104 4239 4149 4039 4178 4178 4243 4215 3520 3194 3377 3920 3853 4578 4854 4608 3399 3620 3822

879 880 871 1019 1162 1254 1284 1351 1484 1573 1788 1936 2032 2067 2055 1898 1933 1938 1882 1898 1863 1746 1768

Qatar 1537 1606 1676 1775 1884 1964 2020 2094 2237 2436 2580 2761 2882 2961 3732 3895 3865 3799 3617 3635 3544 3595 3876

1319 1397 1386 1426 1489 1613 1763 1826 1980 1959 1811 1782 1863 1885 2013 1947 1585 1644 1717 1841 1715 1690 1912

Iran

9476 9157 8810 10,077 10,796 11,496 11,098 10,749 11,429 10,315 10,908 11,470 11,841 11,702 11,624 12,014 12,406 11,892 12,261 11,832 11,039 10,954 12,136

UAE

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Kuwait

Saudi

Iraq

Crude oil consumption

Iran

Saudi

Years

Major Crude Oil Output of Middle East Countries (Thousand pb/d)

Crude oil production

Table 6.2

462 489 497 457 503 541 533 567 584 624 641 668 734 750 NA NA 757 723 704 716 628 722 772

Iraq 370 396 412 452 487 497 529 579 606 586 615 650 679 694 832 901 1034 1017 1015 969 798 952 1126

UAE 264 275 278 288 295 330 320 338 354 372 397 431 456 467 514 531 449 470 468 446 411 450 431

Kuwait

48 54 62 72 83 86 105 128 153 169 199 201 226 230 304 324 371 337 348 375 296 311 347

Qatar

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average, the country produced 10,983 thousand barrels per day during this period, with a yearly growth rate of 1.3%. Iran held the position of the second-largest producer of crude oil until 2012, at which point Iraq overtook it as a result of the international sanctions imposed on Iran’s oil industry. Iran experienced fluctuations in its oil production levels between 2013 and 2018, with a range of 3194 thousand barrels per day to 4854 thousand barrels per day. The average production during this period stood at 3920 thousand barrels per day, reflecting a modest annual growth rate of 0.1%. From 2012 onwards, Iraq experienced an important surge in crude oil production, propelling it from the position of the third-largest producer to the second-largest producer globally. This change occurred subsequent to the conclusion of the US-led invasion and occupation, which played a pivotal role in facilitating this substantial increase in output. The production levels in Iraq experienced fluctuations over the period from 2003 to 2020, ranging from 1318 thousand barrels per day to 4779 thousand barrels per day. On average, Iraq’s production stood at 2879 thousand barrels per day, with a steady growth rate of 5.7% per annum. Kuwait, previously holding the position of the fourth-largest crude oil producer, experienced a decline in its ranking in 2015 as the United Arab Emirates surpassed it. This shift can be attributed to Kuwait’s comparatively lower level of investment and production capacity. Kuwait’s oil production exhibited a fluctuating pattern, spanning from 1863 thousand barrels per day in 2020 to 2741 thousand barrels per day in 2021. The average daily production stood at 2437 thousand barrels, with a modest average growth rate of −0.3% annually. The United Arab Emirates (UAE) held the position of the fifth-largest producer of crude oil until the year 2015. However, due to a significant increase in output and the expansion of its infrastructure, the UAE managed to ascend to the fourth spot among global crude oil producers. The United Arab Emirates (UAE) witnessed a fluctuation in its production levels over the period from 2000 to 2017, with a range of 2572 thousand barrels per day to 4038 thousand barrels per day. The average daily production during this period stood at 3151 thousand barrels, reflecting an average annual growth rate of 2.4%. In each year, Qatar consistently maintained a relatively stable crude oil output, positioning itself as the smallest producer among the six countries. The production levels of Qatar’s oil industry experienced fluctuations between 2002 and 2013, ranging from 871 thousand barrels per day to

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2067 thousand barrels per day. On average, Qatar produced 1479 thousand barrels per day during this period, with an annual growth rate of 3.6%. Table 6.2 presents the yearly crude oil consumption data for Saudi Arabia, Iran, Iraq, UAE, Kuwait, and Qatar spanning the period from 2000 to 2022, measured in thousands of barrels per day. The aggregate crude oil consumption across these six countries witnessed a notable escalation from 6000 thousand barrels per day in 2000 to 9134 thousand barrels per day in 2022, exhibiting an average annual growth rate of 2.5%. On average, Saudi Arabia consistently held the position of being the leading consumer of crude oil among the six countries, with its consumption accounting for approximately 52.1% of the total. The consumption of Saudi Arabia has shown a fluctuating pattern over the period from 2000 to 2015, with a range of 1537 thousand barrels per day to 3895 thousand barrels per day. The average daily consumption during this period was estimated to be around 2873 thousand barrels, with a calculated average growth rate of 4.9% per annum. Until 2014, Iran held the position of the second-largest consumer of crude oil among the six countries. However, it was subsequently overtaken by the UAE as a result of Iran’s reduced domestic demand and export capabilities. The consumption of Iran shown a fluctuation between 1319 thousand barrels per day in 2000 and 1980 thousand barrels per day in 2008. The average daily consumption during this period was recorded at 1698 thousand barrels, with a consistent annual growth rate of 1.9%. Until 2014, the UAE held the position of the third-most significant consumer of crude oil within the cohort of six countries. However, subsequent to that year, the UAE experienced a shift, elevating its status to become the second-largest consumer. This transformation was primarily driven by an augmentation in domestic demand and an expansion of refining capacity. The UAE witnessed a fluctuation in its daily oil consumption over the period from 2000 to 2016. The consumption levels varied between 370 thousand barrels per day in 2000 and 1034 thousand barrels per day in 2016. On average, the UAE consumed approximately 680 thousand barrels per day during this period. Furthermore, the consumption exhibited an average annual growth rate of 6.3%. Until 2016, Iraq held the position of the fourth-largest consumer of crude oil among the six countries. Kuwait surpassed Iraq in this ranking due to Iraq’s comparatively lower production levels and security concerns. The consumption of Iraq’s oil varied between 457 thousand barrels per

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day in 2003 and 757 thousand barrels per day in 2016. On average, Iraq consumed approximately 605 thousand barrels per day during this period, exhibiting an average annual growth rate of 3.1%. Until 2016, Kuwait held the position of the fifth-largest consumer of crude oil within a group of six countries. Due to a surge in its domestic demand and an expansion in refining capacity, Kuwait ascended to the fourth-largest consumer. The consumption of Kuwait experienced a fluctuation between 264 thousand barrels per day in 2000 and 531 thousand barrels per day in 2015. On average, Kuwait consumed approximately 375 thousand barrels per day during this period. Furthermore, the consumption exhibited an average annual growth rate of 3.8%. In each year, Qatar consistently displayed the lowest crude oil consumption among the six countries, demonstrating a notable level of stability in its output. The consumption of Qatar exhibited a fluctuation between 48 thousand barrels per day in 2000 and 375 thousand barrels per day in 2019. Over this period, the average daily consumption was recorded at 189 thousand barrels, with a notable average annual growth rate of 10.9%. Table 6.3 shows the natural gas production and consumption in the Middle Eastern countries which signifies that during 2000, Iran was produced 60 bcm natural gas, in 2000. Its production has been increasing during the study period, as it accounted 96 bcm in 2004 which has raised to the level of 131 bcm in 2008 by 36%. In this direction during (2009– 2015), Iran has been producing a significant amount of natural gas by 15% from 144 to 192 bcm. In the same increasing trends, Iran shows consistent growth in the production of natural gas. As the data depicts that during (2016–2022), it has been continuously raised by 30% which is almost doubled than earlier period. Iran leads the gas production and consumption AAGR of the five countries, with 7.4% and 6.9% respectively. Qatar, the second-largest gas producer and consumer, has a 12.5% and 9.3% AAGR, while Saudi Arabia has a 4.7% AAGR. The UAE, being the fourth-largest gas producer and consumer, has a 1.9% and 4.3% AAGR, with production growing slowly and consumption increasing faster. Kuwait, the smallest gas producer and consumer, has a 1.3% and 4.1% AAGR. Saudi Arabia is a significant producer of gas which produced 50 bcm in 2000. Its production has been increased from 66 bcm in 2004 to 80 bcm in 2008 by 21%. The same upward trends have been remained perceptible during (2009–2022), i.e. 78 bcm to 120 bcm. The UAE was recorded 38

38 45 43 45 46 48 49 50 50 49 51 52 54 55 54 56 59 59 58 57 55 69 58 1.9

25 27 30 31 39 46 51 63 77 89 131 145 157 178 174 181 174 170 169 177 171 177 178 12.5

Source BP Statistic Review of World Energy Workbook (2023)

50 54 57 60 66 71 73 74 80 78 88 92 99 100 102 106 99 105 109 112 111 117 120 4.7

10 11 9 11 12 12 13 12 13 11 12 14 16 16 15 15 16 16 17 17 15 25 13 1.3

63 70 83 85 99 103 112 126 133 143 153 162 162 163 180 191 196 205 220 223 233 241 228 6.9

50 54 57 60 66 71 73 74 80 78 88 92 99 100 102 106 105 109 112 111 112 117 120 4.7

Saudi Arabia

60 66 79 83 96 102 111 125 131 144 152 160 166 167 182 192 199 213 232 241 250 256 259 7.4

Kuwait

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 AAGRs

Qatar

Iran

UAE

Iran

Years

Saudi Arabia

Gas consumption

Major Gulf countries gas production/consumption (Billion Cubic Metric)

Gas production

Table 6.3

31 38 36 38 40 42 43 49 59 59 61 63 66 67 66 69 72 72 71 71 70 69 70 4.3

UAE 11 10 11 12 15 19 20 24 19 20 32 21 26 43 40 45 41 41 34 37 35 40 37 9.3

Qatar

10 11 9 11 12 12 13 12 13 12 15 17 18 19 19 19 21 21 21 23 21 25 22 4.1

Kuwait

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bcm natural gas production in 2000; it has been consistently increasing over the study period. During (2004–2008), its output has been increased from 46 to 50 bcm by 9%. However, it has been increasing by 2.04% in 2009 with 49 bcm but slightly raises in 2022 by 58 bcm. Qatar is also an important natural gas container and registered 25 bcm in 2000. During 2004, the gas production of the country is 39 bcm which has been remarkably increased to the level of 77 bcm by 97%. During 2009– 2015, Qatar has produced 89 bcm to 181 bcm by 103% points, showing significant upward trends. But its production has been declining since 2016 by 7%, however, increased in 2022 up to the level of 178 bcm. Kuwait is a main producer of gas with 10 bcm in 2000, however, its output has been declined in 2002 by 9 bcm. Although in 2004, production of gas was 12 bcm, which has been increased marginally to 13 bcm in 2008 by 8%. Importantly, its output is being fluctuating during the study period; during (2013–2015), the country’s production has been reducing by (−6.5%). The country has recorded consistent gas production over the period (2016–2021); however, there has been a noteworthy increase of 56% in the output, i.e. 25 bcm. Thus, the aggregate gas production of the five nations experienced a notable rise by 377%, ascending from 183 bcm in 2000 to 874 bcm in 2022. In terms of gas production across the five countries, Iran reveals the highest levels, succeeded by Qatar, Saudi Arabia, the United Arab Emirates, and Kuwait. The reason behind such an extraordinary supply of natural gas is the worldwide rising demand for such products as well as the price, which also pulls these countries to invest in energy resources to gain profit in the world market. In terms of consumption of gas, Iran has consumed 63 bcm in 2000 which has been increasing in subsequent years. Its consumption has been arisen from 99 bcm in 2004 to 133 bcm by 34% in 2008. In such positive trends, during (2009–2015), the country has used 143 bcm of gas to 191 bcm. Iran also experienced a significant increase, escalating from 196 bcm in 2016 to 228 bcm in 2022. Qatar’s consumption recorded 11 bcm of gas in 2000, which has been growing during the study period. During the period 2004–2008, its consumption increased from 15 to 19 bcm by 27%. In the same trends, it was 12 bcm in 2009, which has increased to 45 bcm in 2015. The country has witnessed a significant rise from 41 bcm in 2016 to 178 bcm in 2022.

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As Saudi Arabia also experienced a parallel increase in consumption from 50 bcm in 2000 to 120 bcm in 2022. The UAE is also one of the big oil consumers; it had registered 370 thousand pb/d in 2000. Notably, its consumption has been growing persistently. During 2004, the UAE has consumed 487 thousand pb/d which is increased to the level of 606 thousand pb/d in 2008. In this direction, the country has been using a significant amount of oil in the next following years, i.e. increased from 694 thousand pb/d (2013) to 901 thousand pb/d (2015) by 30%. However, gas consumption in the UAE has been declining since 2016, from 72 bcm to 70 bcm in 2022. Kuwait had used 264 thousand pb/d in 2000 which has been rising over the years. In this regard, its oil consumption has been increased from 295 thousand pb/d (2004) to 354 thousand pb/d (2008). Similarly, the same increasing trends have been showing in the following years, i.e. 372 thousand pb/d in 2009 to 531 thousand pb/d in 2015 by 42.7%. The gas consumption of Kuwait also experienced marginal increase from 21 bcm in 2000 to 22 bcm in 2022. Hence, the data also unveils trends in the gas production and consumption of the five countries. The gas production and consumption in Iran have shown a consistent upward trend over the years, with the exception of a minor decline in consumption in 2012 and a marginal increase in production in 2017. The production and consumption of gas in Qatar have shown variability over time, characterized by periods of both increased and decreased levels. As an illustration, the gas production of Qatar experienced a peak of 181 bcm in 2015, followed by a decline to 169 bcm in 2018. In a similar vein, the gas consumption in Qatar experienced a notable decline, reaching a nadir of 10 bcm in 2001, followed by a substantial increase to 45 bcm in 2015. Iran leads the gas production and consumption AAGR of the five countries, with 7.4% and 6.9%, respectively. Qatar, the second-largest gas producer and consumer, has a 12.5% and 9.3% AAGR, while Saudi Arabia has a 4.7% AAGR. The UAE, the fourth-largest gas producer and consumer, has a 1.9% and 4.3% AAGR, with production growing slowly and consumption increasing faster. Kuwait, the smallest gas producer and consumer, has a 1.3% and 4.1% AAGR, indicating slow growth. These figures highlight the significant growth in gas production and consumption in the region. These disparities in AAGRs among these countries could be due to a variety of factors, including the availability of natural

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gas reserves, technological advancements, domestic energy needs, and geopolitical considerations. Iran’s and Qatar’s rapid growth rates may have ramifications for their roles in the global gas market. Overall, the sector’s sustained growth reflects its critical importance to the region’s economic development and, potentially, to the global energy landscape. The data presented in Table 6.4 highlights the major countries that have been importing crude oil globally from 2000 to 2022. It reveals that Europe has consistently been recognized as a significant region for oil imports, with a volume of 12,450 thousand per pb/d in 2000. In addition, it is worth noting that the US has played a substantial role as a crude oil importer, with a volume of 9109 thousand barrels per day. Similarly, Japan has imported 4245 thousand pb/d, while India’s imports stand at 1495 thousand barrels per day. In 2005, there was a notable increase in the imports of crude oil for several countries. The US experienced an increase of 11,209 thousand pb/d, while Europe experienced a rise of 13,602 thousand pb/d. Japan’s imports also grew, reaching 4339 thousand pb/d, and India saw an increase of 1943 thousand pb/d. During the financial crisis, there has been a decline in the oil imports of the US since 2008. This downward trend has continued over the years, with the value reaching 9753 thousand pb/d. Europe’s oil imports experienced a decline of 13,885 thousand pb/d within the same year. Contrary to that, we observed a similar pattern of growth in 2008 for countries like China (4925 thousand pb/d), Japan (4494 thousand pb/ d), and India (2397 thousand pb/d). In 2018, there has been significant growth in the imports of all these countries. For instance, Europe’s volume of imports reached an impressive 12,159 thousand pb/d, securing the top spot. In 2018, the US had a production level of 7757 thousand pb/d, while Japan, China, and India followed with production levels of 9261 thousand pb/d, 3056 thousand pb/d, and 4544 pb/d, respectively. China emerged as the leading importer among the mentioned countries in 2022, with a substantial volume of 10,206 thousand pb/d. Following closely behind is Europe, importing 10,068 thousand pb/d, while the US imports 6278 thousand pb/d. India and Japan round out the list with imports of 4642 thousand pb/d and 2661 thousand pb/d, respectively. Based on the examination of the table provided, it can be inferred that the selected countries have experienced a consistent rise in their imports of crude oil starting from the year 2000. The financial crisis of 2008 had a significant impact on both the US and Europe. Europe and the US have played a significant role in importing crude oil, accounting for 24%

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Table 6.4 World’s leading countries crude oil imports (Thousand pb/d) Years

US

Europe

Japan

China

India

Total World

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 AAGR % share (2022)

9109 9929 9715 10,349 10,771 11,209 10,118 10,017 9753 9062 9184 8914 NA 7730 7344 7363 7850 7967 7757 6801 5877 6164 6278 −2.1 15

12,450 12,486 12,253 12,632 13,048 13,602 12,988 12,888 12,765 12,732 11,719 12,388 NA 2927 11,490 12,315 11,989 12,526 12,159 14,003 12,234 9001 10,068 −1.3 24

4245 4179 3954 4163 4250 4339 4063 3986 3966 3445 3470 3558 NA 3409 3245 3234 3158 3235 3056 3022 2472 2451 2661 −2.6 6

NA NA NA NA NA NA NA 3294 3612 4112 4806 5074 NA 5658 6178 6731 7625 8426 9261 10,180 10,853 10,562 10,206 10.3 24

806 974 954 1574 1942 2397 2214 2414 2553 2598 2598 3360 NA 3793 3791 3936 4308 4341 4544 4506 4033 4293 4642 9.5 11

38,490 38,849 38,106 40,494 42,790 45,609 42,916 43,142 43,003 42,336 41,951 44,696 NA 41,572 41,238 42,846 44,714 46,485 46,816 46,745 42,900 41,132 42,756

Source Annual Bulletin of OPEC Library of various issues

and 15%, respectively. This is particularly noteworthy considering their highly industrialized development. There has been a significant increase in the United States’ crude oil imports during the subsequent time period, eventually reaching a level of 6278 thousand pb/d in 2022. Throughout the study period, it is worth noting that Asian countries such as Japan, China, and India experienced notable upward trends. In contrast, China holds the position of being the primary oil importing country in Asia, with a share of 24%. Following closely behind is India, whose oil imports make up 11% of the significant oil market in the region. Lastly, Japan’s share, which has been consistently increasing, stands at 6%. The evidence

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suggests that India is becoming a significant player in the global oil import market. According to the data in this table, China and India have increased their reliance on imported crude oil over the years, with the highest AAGRs of 10.3% and 9.5%, respectively. The US, Europe, and Japan, on the other hand, have reduced their reliance on imported crude oil over the years, with negative AAGRs of −2.1%, −1.3%, and −2.6%, respectively. Table 6.4 has highlighted the trends and patterns of crude oil import of the five countries and the world as a whole. Crude oil imports into the United States was peaked in 2005 and fell precipitously after 2006, reaching their lowest level in 2020. This could be due to the increased domestic shale oil and gas production, as well as increased energy efficiency and conservation. The import of the Europe after 2014 started declining and reached to its lowest level in 2021. The COVID-19 pandemic, as well as the shift to renewable energy and electric vehicles, may have reduced demand for oil. Japan has imported less crude oil over time, reaching a low in 2020. This could be attributed to population decline, economic growth, nuclear power generation, and improved energy efficiency. On the contrary, China’s crude oil imports has been increased rapidly, reaching a peak in 2020. This could be explained by population growth, economic growth, and industrial and transportation expansion. Concomitantly, India’s crude oil imports increased steadily, reaching a peak in 2022 might be on account of population growth, economic growth, and the expansion of the automotive and petrochemical industries. The data presented in Table 6.5 depicts natural gas imports of five major countries (the United States, Europe, Japan, China, and India), as well as the entire world, during 2000–2022. Total world natural gas imports rose from 530 bcm in 2000 to 1312 bcm in 2022, with some fluctuations in between. Total global natural gas imports peaked at 1434 bcm in 2021, with the lowest level at 530 bcm in 2000. Over the years, China has increased its reliance on imported natural gas, while the United States has decreased its reliance on imported natural gas. Natural gas imports into the United States peaked in 2007, then fell precipitously after 2008, reaching their lowest level in 2013. This could be due to an increase in domestic shale gas and LNG production, as well as improvements in energy efficiency and conservation measures. Until 2019, Europe’s natural gas imports showed an upward trend, peaking in that year. This could be due to an increase in natural gas demand as a

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Table 6.5 World’s leading countries natural gas imports (Billion Cubic Metric) Year

US

Europe

Japan

China

India

Total World

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 % share (2022)

107 113 114 113 120 122 117 130 114 9 106 98 88 81 76 77 85 87 82 77 72 79 77 6

306 306 327 354 387 410 119 429 449 533 581 576 556 544 523 533 547 602 610 702 661 673 611 47

72 74 72 79 76 78 81 88 92 86 93 104 122 122 124 122 120 121 119 111 107 98 87 7

NA NA NA NA NA NA 1 4 4 7 16 30 39 52 56 59 73 92 123 129 136 162 145 11

NA 1 1 1 2 6 8 10 10 12 12 16 18 17 17 18 26 27 31 31 33 31 29 2

530 553 585 631 687 720 752 931 971 959 892 1039 1042 1052 1023 1044 1079 1158 1210 1424 1372 1434 1312

Source Annual Bulletin of OPEC Library of various issues Note NA (data not available)

result of the COVID-19 pandemic, as well as a diversification of supply sources from Russia, Norway, Algeria, and LNG exporters. Japan’s natural gas imports increased steadily until 2014, when they reached their peak. This could be due to an increase in natural gas demand following the Fukushima nuclear disaster in 2011, as well as the reliance on LNG as a major source of energy. Natural gas imports into China have increased rapidly over the years, reaching a peak in 2021. This could be attributed to population growth, economic growth, and the expansion of the industrial and residential sectors. Natural gas imports into India have steadily increased over the years, reaching a peak in 2020. The above-mentioned data clearly indicated that Europe is the leading importer of natural gas, accounting for 47% of the total share. Following

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closely behind are China with 11%, Japan with 7%, and the US with 6%. Although India’s share of natural gas imports is currently marginal at 2%, it is worth noting that its import volume has been steadily rising over the course of the study period. As a result, India has emerged as a major player in the global gas import market.

India’s Energy Profile In terms of energy consumption and demand, India ranks as the thirdlargest country globally, following the United States and China. Despite the abundance of energy resources in India, meeting its energy demands remains a significant challenge. The production and consumption of it have experienced a significant disparity. Relying on other countries or regions is necessary for meeting its energy needs. The introduction of structural reforms has further contributed to the increase in demand. The growth rate of India has undergone a remarkable transformation, shifting from what was once known as the “Hindu growth rate” to a truly splendid growth rate. Consistent availability of energy is crucial for the functioning of the economy, as it serves as its lifeline. To gain a comprehensive understanding of different facets of energy, it becomes imperative to create a detailed energy profile for the country. The International Energy Agency (2015) predicts that the India’s energy demand will more than double by 2040. India has been utilizing both renewable and non-renewable energy resources in response to the emergence of new global trends. In India, the demand for renewable energy sources such as solar, wind, biomass, and small hydro has been increasing. On the other hand, non-renewable energy sources like fossil fuels are also being utilized. According to Energy Statistics (2016), India’s coal reserves were estimated to be 306.60 billion tonnes, with a consumption of 827.57 tonnes in 2015. Additionally, it may be noted that India has a potential capacity for renewable energy generation of 896,603 MW. The available wind power potential is 102,772 MW, which accounts for 11.46% of the total potential. Additionally, there is a small-hydro power (SHP) potential of 19,749 MW, which makes up 2.20% of the total potential. The generation and consumption of electricity have been recorded at 316,379 MW and 1075.64 kWh per person, respectively (IEA, 2021). Regarding the production of non-renewable energy, it is worth noting that crude oil production reached 37.46 million metric tonnes (MMT) in the year 2015–2016, while natural gas production reached 32.78

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billion cubic meters (bcm) during the same period. The consumption of crude oil and natural gas has been recorded at 223.24 MMT and 51.13 BCM, respectively.1 In the period of 2021–2022, the production of coal reached a total of 778 tonnes, whereas its consumption amounted to 1028 tonnes (Ministry of Coal, Government of India, 2021). Therefore, it can be said that India’s oil and gas reserves are not very sufficient to meet its demand. Despite this, the country’s consumption of these resources is steadily rising, leading to its position as the fourth-largest energy consumer globally. The aggregate oil production in India has shown an upward trend, rising from 726 thousand barrels per day (pb/d) in 2000 to 916 thousand pb/d in 2011. However, it experienced a subsequent decline, reaching 737 thousand pb/d in 2022. India’s oil consumption experienced a significant growth trajectory over the past two decades. Specifically, the total oil consumption in India surged from 2259 thousand pb/d in 2000 to 5185 thousand pb/d in 2022. The data suggested that there is an increasing disparity between the supply and demand of oil in India, resulting in a growing reliance on oil imports. India’s natural gas production experienced a growth trajectory between 2000 and 2010, with an increase from 26.4 billion cubic meters (bcm) to 49.3 bcm. In more recent years, specifically in 2022, there has been a decline in production, resulting in a decrease to 28 bcm. India’s natural gas consumption experienced a growth trajectory over the past two decades. Specifically, the total consumption of natural gas in India escalated from 26.4 billion cubic meters (bcm) in the year 2000 to 62 bcm in 2021. However, there was a slight decline in consumption observed in 2022, with the figure dropping to 58 bcm. The data suggests that India experiences a variable disparity between the supply and demand of natural gas, resulting in a reliance on imports for meeting its natural gas needs. During the period of 2000–2005, the Compound Annual Growth Rate (CAGR) of crude oil production in India was recorded at a modest 0.30%. However, in the subsequent five-year period of 2005–2010, there was no increase of 3% in crude oil production. Furthermore, during the period from 2010 to 2015, there was a consistent decrease in the rate, 1 Energy Statistics. (2016). Central Statistics Office Ministry of Statistics and Programme Implementation Government of India New Delhi. Retrieved from http://www.mospi.gov.in/sites/default/files/publication_reports/energy_statistics_ 2016.pdf. Accessed on 1 Feb 2016.

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with a decline of −0.89%. In contrast, the compound annual growth rate (CAGR) of crude oil consumption in India was 2.90% between 2000 and 2005. Subsequently, it experienced an increase of 3.58% from 2005 to 2010, and a further growth of 4.53% from 2010 to 2015. During the period from 2018 to 2020, the production and consumption of [the subject] have been documented to have experienced a 1% to 5% change. In Table 6.6, the production and consumption of natural gas in India from 2000 to 2015 are depicted. The data indicates that the production of this particular item was recorded at 26.4 bcm in 2000. Over the course of five years, there was an increase in production to 29.6 bcm, which represents a growth rate of 21.3%. Between 2006 and 2010, there was a notable increase in the range of 29.3 bcm to 49.3 bcm, indicating a growth rate of 68.2%. In 2011, the production of same experienced a depreciation of −9.7%, resulting in a decrease to 44.5 bcm. The production of natural gas has been documented at its lowest levels, reaching 38.8 bcm in 2012 and 29.2 bcm in 2015. Similarly, the patterns observed from 2018 to 2022 have remained consistent. The declining trends of crude oil, as reported in the Indian Petroleum and Natural Gas Statistics (2014– 2015), can be attributed to various factors. One of the main reasons is the decrease in production generation in fields such as Bassein & Satellite, KG-D6, and M&S Tapti. Additionally, the closing of non-associated gas wells of Ravva and the GAIL incident have also contributed to this decline.2 India’s natural gas production has experienced a compound annual growth rate (CAGR) of 2.31% between 2000 and 2005. However, this growth rate has seen a significant boost, reaching 10.97%, during the period of 2005 to 2010. On the other hand, there has been a decrease in production, specifically a decline of (−8.08%) between 2010 and 2015. The compound annual growth rate (CAGR) for natural gas consumption between 2000 and 2005 was recorded at 6.02%. However, there was a slight decrease of 0.11% in consumption between 2005 and 2010. From 2010 to 2015, the compound annual growth rate (CAGR) experienced a decline of −3.85%, indicating a significant decrease in natural gas consumption. During the period of 2015–2020, there was a consistent fluctuation in the registered figures, with a decrease of 1.4% followed by an increase of 4%. 2 Performance of petroleum and natural gas sector in India. Retrieved from http://ijc rme.rdmodern/wp-content/uploads/2015/06/10.pdf. Accessedon 1 Feb 2016.

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Table 6.6 India’s oil and natural gas production/consumption Years

Oil production (thousand pb/d)

Oil consumption (thousand pb/d)

Natural gas production (bcm)

Natural gas consumption (bcm)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGR 2000–2005 2005–2010 2010–2015 2015–2020 % Share (2022)

726 727 753 756 773 737 760 768 803 816 882 916 906 906 887 876 874 885 869 830 771 776 737

2259 2285 2413 2485 2556 2606 2737 2941 3077 3237 3319 3488 3685 3727 3849 4159 4544 4724 4974 5148 4669 4798 5185

26.4 26.4 27.6 29.5 29.2 29.6 29.3 30.1 30.5 37.6 49.3 44.5 38.8 32.2 30.4 29.2 28 27 28 27 27 23 28

26.4 26.4 27.6 29.5 31.9 35.7 37.3 40.3 41.5 50.7 61.5 61.9 57.5 50.4 50.6 50.6 51 54 58 59 60 62 58

0.3 3 −0.9 −2.5 0.7

2.9 3.93 3.4% 2.34 5.3

2.3 10.97 −8.1 −1.4 0.7

6 0.11 −4 4 1.4

Source BP Statistical Review of World Energy (2022)

The alignment between India’s crude oil production and consumption has not been in sync. While its contribution to global oil production stands at a mere 1%, it holds a more significant 5% share in terms of total consumption. The disparity between India’s natural gas production and consumption was not as pronounced prior to 2008. However, since then, the gap has been expanding exponentially due to the rising consumption levels. This trend is expected to continue until at least 2022. This

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analysis suggested that India’s production of crude oil and natural gas, surpasses its consumption. India relies heavily on imported fuels from various countries and regions in order to fulfill its substantial demand and consumption requirements. In this particular context, the country relies on countries/regions that possess substantial capacity in terms of crude oil and natural gas, as major energy reservoirs. As a result, the company has been sourcing these products from countries with abundant energy resources.

Eurasia’s Energy Profile Eurasia is endowed with extensive energy reserves and displays considerable promise for the prospective energy market. The considerable reserves it possesses hold the capacity to propel additional industrial and economic expansion within the Eurasian economy. India has undertaken several initiatives to establish engagements with these countries in the field of energy with the aim of fulfilling its energy demands. According to the recent report by the International Monetary Fund (IMF), India has emerged as the frontrunner in global economic growth. The country’s gross domestic product (GDP) has shown a consistent expansion at a rate of 7.3%. Furthermore, it is noteworthy to acknowledge that India displays a substantial demographic advantage, as it has a population of approximately 1.4 billion people. India possesses the inherent capacity to emerge as the global market, given the prevailing circumstances. Given the current circumstances, it is evident that India has been actively engaging with the Eurasian region with the aim of meeting its energy demands. Kazakhstan possesses a highly energy-intensive economy, ranking as the second-largest oil producer and reservoir among the former Soviet republics, following Russia. The world’s mineral energy resources are comprised of approximately 0.5%, with coal accounting for 70%, oil for 22%, and gas for 8%. Therefore, the majority of its energy requirements are met by fossil fuels.3 According to Kazakh energy minister (2023), it was estimated that Kazakhstan has produced a total of 84.2 million tonnes of oil and

3 Kazakhstan Energy Situation. Retrieved from https://energypedia.info/wiki/kazakh stanenergy#energysituation. Accessed on 2 Feb 2016.

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exported 64.3 million tonnes in 2022.4 The country has two massive onshore fields, Tengiz and Karachaganak, which play a dominant role in crude oil production. Together, they contribute approximately half of the total output of petroleum liquids. In contrast, according to the US Energy Administration (2022), approximately 3% of the world’s total oil reserves and a significant 70% of the hydrocarbon reserves are estimated to be held by Kazakhstan and also estimates indicate that Kazakhstan’s wind energy potential is more than ten times the necessary power generation capacity until 2030. In contrast, Kazakhstan possesses a substantial amount of proven natural gas reserves, totaling 1.3 trillion cubic meters. According to the World Nuclear Association’s estimation in 2023, it was determined that Kazakhstan possesses natural gas reserves totaling 85 trillion m3 . In 2010, the Karachaganak oil and gas field played a significant role in Kazakhstan’s gas production, accounting for around half of the country’s total gross gas production. Specifically, it produced approximately 650 billion cubic feet (Bcf) of gas. The following year, in 2011, the field’s production experienced a notable increase, reaching 784 Bcf. In contrast, the amount of gas it produced increased from 775 Bcf in 2015 to 1.3 Tcf in 2020. In addition to its significant oil and gas reserves, Kazakhstan also has a substantial share of the world’s uranium resources, accounting for approximately 12%. In 2015 alone, the country managed to produce around 23,800 tonnes of this valuable mineral. In 2020, Kazakhstan’s crude oil production amounted to 87.2 million metric tonnes, which translates to an average daily output of approximately 1.8 million barrels. A significant portion of the growth can be attributed to the rise in production at the offshore Kashagan field. In the Caspian region, Turkmenistan stands out as a significant holder of gas resources. It has the fourth-largest reserves of both offshore and onshore gas globally, trailing only behind Iran, Russia, and Qatar. Turkmenistan’s economy relies heavily on the production and export of gas, oil, and petrochemicals. Based on the IEA’s report from 2015, it is stated that a significant portion, specifically 85%, of Turkmenistan’s total exports consist of gas and oil. The report also predicts a substantial increase in the production of these products, with a fourfold rise expected to reach 250 billion cubic meters (bcm) and 110 million tonnes (Mt) by the year 2030. 4 Kazakhstan plans to boost oil production to over 90mln tons in 2023: 1 February 2023, 17:15—news on inform.kz (https://www.inform.kz/en/kazakhstan-plans-to-boostoil-production-to-over-90mln-tons-in-2023_a4030438).

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In 2015, it was also approximated that there were 600 million barrels of crude oil reserves and 1.3 trillion cubic meters of natural gas reserves. In 2016, the CIA World Factbook reported that Turkmenistan’s natural gas exports amounted to 45.79 billion cubic feet, in comparison to global statistics. The estimated reserves of crude oil are approximately 600 million barrels as of 2021. The estimated production of gas reached a staggering 265 trillion cubic feet. It is the sixth-largest natural gas reserve holder in the world and Turkmenistan exports 49% of its natural gas production. Additionally, while the potential for harnessing wind, solar, and electric energy is significant, the current situation is such that power generation from these renewable sources has not yet been realized.5 Uzbekistan possesses abundant natural gas resources, making it the third-largest gas producer in the region, following Russia and Turkmenistan. In Uzbekistan, there are a total of 211 hydrocarbon reservoirs, with 108 dedicated to gas and 103 serving both oil and gas. Uzbekistan is the second-largest natural gas producer in Central Asia. In 2021, it produced 53.6 billion cubic meters of natural gas and envisioned increasing production to 66.1 billion cubic meters by 2030.6 By 2020, Uzbekistan has set ambitious goals to boost its gas reserves by 25%, oil reserves by 1.63 times, and gas reserves by 1.33 times, according to estimates. In the region, Kyrgyzstan’s petroleum and natural gas reserves are relatively small, and the majority of its natural gas is sourced from Uzbekistan. Approximately, 90% of the area is covered by mountains. This feature shows immense potential for the production of hydroelectricity. Looking at the total proven reserves, as of 2021, they stand at approximately 5.663 bcm. On the other hand, when it comes to oil and natural gas reserves, Kyrgyzstan has reported lower quantities compared to Kazakhstan, Turkmenistan, and Uzbekistan.7 Although Tajikistan is ranked eighth in the world for hydropower potential with an estimate of 527 terawatt-hours (TWh), the country’s

5 International—U.S. Energy Information Administration (EIA) (https://www.eia.gov/ international/analysis/country/TKM). 6 Uzbekistan—Oil and Gas (trade.gov) (https://www.trade.gov/country-commercialguides/uzbekistan-oil-and-gas). 7 https://www.cia.gov/the-world-factbook/countries/kyrgyzstan/#energy.

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current hydro potential is only exploited at approximately 4%.8 However, it is deficient in respect of natural gas and oil production/reservoir. The production of crude oil and natural gas stood at 181.6 pb/d and 12 million m3 respectively during 2014. The explored deposits of oil, gas, and condensates constitute less than 1% of its total energy resources. As in 2021, the crude oil proven reserves: 5.663 bcm. The Table 6.7 shows six Eurasian countries’ 2000–2022 oil reserves. In 2022, these countries have 113,263 Thousand Million pb/d in oil reserves, 2.33 times more than in 2000. Russia has the most oil reserves in 2022, with 80,000 Thousand Million pb/d, 70.6% of the six countries. Russia had the highest average annual oil reserve growth rate from 2000 to 2022, 3.4%. Tajikistan has the lowest oil reserves in 2022, with 12 Thousand Million pb/d, 0.01% of the six countries. Tajikistan has the lowest average annual oil reserve growth rate from 2000 to 2022, 0%. Kazakhstan had the largest oil reserve increase from 2000 to 2022, rising from 5417 M pb/d in 2000 to 30,000 M in 2010 and maintaining this level until 2022. This is a 5.54-fold increase in oil reserves, or 11.9% annually. Uzbekistan had the most stable oil reserves from 2000 to 2022, at 594 Thousand Million pb/d. Oil reserves in Uzbekistan have not changed or grown at 0% annually. The tabular representation shows natural gas reserves in six Eurasian countries from 2000 to 2022, measured in bcm. The cumulative gas reserves of these nations are 83,031 BCM in 2022, a 1.85-fold increase from 2005’s 44,852 BCM. Russia has the most gas reserves, 47,759 BCM, in 2022. Comparing this to the six countries’ combined gas reserves, 57.5% is significant. Russia had the highest average annual gas reserve growth rate from 2005 to 2022, 0.4%. Tajikistan has the very less gas reserves in 2022. Tajikistan had the lowest average annual gas reserve growth rate from 2005 to 2022, −100%. Turkmenistan’s gas reserves increased dramatically between 2005 and 2022. From 2005 to 2021, the country’s gas reserves increased from 2680 BCM to 13,950 BCM. Interestingly, this high level has persisted until 2022. Multiplying gas reserves by 5.21 yields an average annual expansion rate of 9.8%. Kyrgyzstan, known for its gas reserves, maintained 1 billion cubic meters (BCM) from 2005 to 2022. Note that 2014–2016 data is slightly incomplete. This implies that Kyrgyzstan has static gas reserves with 0% annual growth. 8 Executive summary—Tajikistan 2022—Analysis—IEA (https://www.iea.org/reports/ tajikistan-2022/executive-summary).

30,000 40 12 600 594 7000 60,000 1 1 9967 1632 1317 48,676

1 1 10,000 1661 1310 46,000

2011

30,000 40 12 600 594 7000 60,000

Source Oil and Gas Review (2021), ENI Note Data for 2015 is not available

Kazakhstan 5417 9000 Kyrgyzstan 40 40 Tajikistan 12 12 Turkmenistan 546 546 Uzbekistan 594 594 Azerbaijan 7000 7000 Russia 48,573 60,000 Gas (Billion Cubic Meters) Kyrgyzstan 1 1 Tajikistan 1 1 Turkmenistan 2680 2680 Uzbekistan 1735 1735 Azerbaijan NA 1275 Russia NA 44,860

2010

1 1 9934 1632 1308 48,810

30,000 40 12 600 594 7000 80,000

2012

1 1 9904 1608 1292 49,896

30,000 40 12 600 594 7000 80,000

2013

NA NA 9870 1585 1284 50,205

30,000 40 12 600 594 7000 80,000

2014

NA NA 9838 1564 1277 50,617

30,000 40 12 600 594 7000 80,000

2015

2000

Countries

2005

Eurasian oil and gas reserves (Thousand Million pb/d)

Table 6.7

NA NA 9805 1542 1269 50,508

30,000 40 12 600 594 7000 80,000

2016

1 NA 9838 1564 1277 50,617

30,000 40 12 600 594 7000 80,000

2017

1 NA 9838 1564 1277 50,617

30,000 40 12 600 594 7000 80,000

2018

NA NA 9805 1542 1269 50,508

30,000 40 12 600 594 7000 80,000

2019

NA NA NA NA NA NA

30,000 40 12 600 594 7000 80,000

2020

NA NA 13,950 1846 1917 47,759

30,000 40 12 600 594 7000 80,000

2021

NA NA 13,950 1846 1917 47,759

30,000 40 12 600 594 7000 80,000

2022

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Thus, from the above data, it is clear that Kazakhstan is the largest crude oil reservoir followed by Turkmenistan and Uzbekistan among the Central Asian countries. While Kyrgyzstan and Tajikistan have marginalized energy reserves, Turkmenistan possesses the largest natural gas reserves, holding a significant amount. Uzbekistan is also one of the important energy producers among CARs. Instead of that, Kyrgyzstan and Turkmenistan have negligible natural gas assets. Hence, in terms of crude oil, Kazakhstan has a significant oil market. On the other hand, Turkmenistan has added a substantial amount of energy products in the region.

Indian and Eurasian Republics: Energy Economics After analyzing the energy profile of India and Central Asia, the chapter examines the energy economics of both which studies India’s imports of oil and petroleum products from Central Asia (Table 6.8). The presented table depicts the India’s energy imports pertaining to crude oil and petroleum products sourced from seven Eurasian nations, spanning the time frame of 2004 to 2022, measured in millions of US$. In 2022, the cumulative worth of India’s imports from the aforementioned nations amounts to $6449.68 million, signifying a substantial increase of 5.33 times in comparison to the total import value of $1209.29 million recorded in 2004. In 2022, it is noteworthy that Russia emerges as a country with the most substantial export value to India. Specifically, the exports from Russia to India amount to a staggering $4062 million, constituting an impressive 62.9% of the overall value of exports originating from the seven countries under consideration. From the years 2004 to 2022, the same has indicated that Russia has consistently shown higher average annual growth rate in terms of exports to India, standing at an impressive 13.3%. Tajikistan, with a nominal export value of $4 million in 2022, stands as the country with the most modest contribution to India’s import market. This figure represents a mere 0.06% proportion of the aggregate export value originating from the seven countries under consideration. Tajikistan, in the period spanning from 2004 to 2022, shows the most modest average annual growth rate of exports to India, standing at a diminutive −1.9%. Kazakhstan has experienced a remarkable surge in its export activities to India between the years 2004 and 2022. Notably, the value of its exports has undergone a substantial transformation during this

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Table 6.8 India’s crude oil and petroleum products imports from EURASIA (US$ million) Years Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Russia Azerbaijan 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

NA NA NA NA 9.5 24.48 0.72 0.581 1.889 334.78 793.05 234.32 320 1039 749 15,097 1283 436 118

0.287 0.275 NA 0.003 0.026 0.27 0.081 0.152 0.028 0.453 0.416 0.483 2 31 2 2 5 1.49 3.68

0.005 NA NA NA NA 0.01 NA 0.039 0.157 0 NA NA 15 47 15 0 0 7.75 4

NA NA 0.11 0.29 NA NA NA NA NA NA NA 39.5 22 15 33 4 1 0.17 90

NA NA 0.11 0.59 1.68 0.3 NA 11.699 3.356 0.299 1.687 NA 46 104 108 92 16 8 93

1215 2037 1901 2684 4451 3438 3592 4051 4602 3814 4208 643 281 545 303 342 58 4668 4062

8 8 68 75 234 103 327 479 1757 977 422 31 4782 7981 6801 6226 5938 180 585

Source UNCOMTRADE Database (2016) Note Data from 2000 to 2003 not available

period. Commencing from a modest figure of $0 million in 2004, Kazakhstan’s export value to India soared to an impressive $15,097 million in 2019. However, it is worth mentioning that this upward trajectory experienced a subsequent decline, resulting in a reduced export value of $118 million in 2022. The aforementioned figure denotes a substantial surge in exports, amounting to a multiplication of 118 times. Alternatively, one may interpret this as an average yearly expansion rate of 38.8%. Kyrgyzstan, a nation that has consistently maintained its export stability to India from 2004 to 2022, emerges as the country with the most unwavering export performance. Throughout this duration, Kyrgyzstan has managed to sustain its exports at approximately $0.3 million, with only a few exceptional instances in 2016, 2017, and 2022 where deviations from this trend were observed. This implies that Kyrgyzstan shows a lack of substantial fluctuations in its export figures, instead demonstrating a consistent average annual growth rate of 15.8%.

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In Table 6.9, it is observed that the price fluctuations of crude oil in different exporting countries, such as Kazakhstan and Turkmenistan, started in 2000. It is worth noting that the international average price of crude oil was recorded at US$ 37.54 per barrel in that year. In the post2000 era, it is worth noting that the international prices of crude oil have often demonstrated a significant degree of volatility. In 2005, the price of crude oil was recorded at US$ 60.44 per barrel. Eventually, it soared to its highest level of US$ 100 per barrel in 2008. The fluctuating prices were a direct result of the ever-shifting dynamics of the international market. In 2002, the price of oil reached its lowest point, hitting a rock-bottom of US$ 29.92 per barrel. In 2015, the prices of crude oil reached a significant low, with a value of US$ 36.57 per barrel. This marked a notable decrease compared to the prices observed in previous years. The prices for crude oil in the OPEC countries were recorded at US$ 27.6 per barrel in 2000, and the same shown a consistent increase throughout the entire study period. The period from 2005 to 2011 has indeed been characterized by significant volatility. In 2011, we witnessed a significant increase in the price of oil, as it surged from US$ 50.29 per barrel to a staggering US$ 107.46 per barrel. Since 2011, it is experienced a consistent upward trend in prices, with an increase of US$107 per barrel in 2011–2012, followed by a further increase of US$109 per barrel in 2012. However, it is noted that the same tempo has not been maintained during the years 2014 and 2015. In fact, the prices experienced a significant decline, dropping from US$ 96.29 per barrel to US$ 49.49 per barrel. In contrast, it is observed that Kazakhstan experienced a significant rise in its crude oil price from US$ 24.63 per barrel in 2004 to an impressive US$ 88.72 per barrel in 2008. It is noticed that the price of the same has been steadily decreasing in the subsequent years. In this particular direction, it is noted that Kazakhstan had posed a price of US$ 56.84 per barrel back in 2011. On the other hand, it is seen that the oil price of the country experienced a subsequent increase, reaching the level of US$ 65.54 per barrel in 2014. In 2015, the price of oil experienced a significant decrease of $50 per barrel due to fluctuations in the market. In 2012, the prices of Turkmenistan stood at US$ 51.2 per barrel. In 2013, we observed a slight decrease in prices, as they dipped to the level of US$ 50.4 per barrel. However, the following year, in 2014, prices rebounded and rose to US$ 57.5 per barrel.

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In the current scenario, it is observed that the current oil prices of Kazakhstan and Turkmenistan are higher in comparison to the prices established by OPEC and the international crude oil market. The oil prices of the CARs are as not viable as those of the OPEC countries, which demonstrated that it is difficult for India to turn towards the CARs region’s energy market. On the other hand, if India moves towards the region, it will be beneficial. For example, if it can give the Middle East countries hard competition, then the monopoly of the region over the oil market will be balanced. Therefore, it is advantageous for India to shift towards the region. Moreover, the diversification would be economical for price stability. Thus, from the above analyses, it was recommended that India expand its oil and petroleum import sources. Kazakhstan and Turkmenistan have the potential to become important oil and gas markets in the future, as they can meet India’s growing energy needs. Given this context, it would be ideal for Central Asia to be considered as the top choice, as long as both regions acknowledge and appreciate each other’s strengths in terms of reservoirs, prices, and market potentials (Table 6.9).

India’s Energy Quest: Regional Geopolitical Challenges The pursuit of energy by India in the Eurasian region is met with various geopolitical challenges, which serve to restrict its potential and choices. There are a number of challenges that we face, both from external factors and internal dynamics. On the external front, we encounter obstacles like the absence of direct connectivity, security risks in neighboring countries, geopolitical rivalries and opposition from other powers, as well as the complexities of dealing with sanctions and diplomatic matters. There are a variety of challenges to consider, both internal and external. Internally, one has to navigate the complexities of domestic politics and economics, as well as the unique circumstances of each Eurasian country, including their resource nationalism and diverse needs. Additionally, we must also contend with the unpredictable nature of global energy markets, which can greatly impact our efforts. Hence, it is crucial for India to embrace a practical and forwardthinking strategy in order to successfully tackle these obstacles and attain its energy objectives in the Eurasian region. In order to effectively address the challenges in the region, it is important to consider a comprehensive

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Table 6.9 Crude oil prices of various oil exporting countries/regions (US$ p/ b) Years

International

OPEC

Kazakhstan

Turkmenistan

Russia

Azerbaijan

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

37.54 30.68 29.92 35.55 47.04 60.44 68.27 72.98 100 58.75 77.1 91.37 88.93 92.4 85.34 36.57 43.49 50.8 65.23 56.99 39.68 65.84 76.64

27.6 23.12 24.36 28.1 36.05 50.59 61 69.04 94.1 60.86 77.38 107.46 109.45 105.87 96.29 49.49 40.76 52.51 69.78 64.04 41.47 69 100

NA NA NA NA 24.63 24.31 18.72 35.82 88.72 71.1 68.89 56.84 67.17 63.25 65.54 50 NA 105.2 37.9 68.4 112.8 101 103

NA NA NA NA NA NA NA NA NA NA NA NA 51.2 50.4 57.5 NA NA 55.9 60.9 54.4 45.4 NA NA

25.2 18.52 27.89 29.97 39.04 56.43 60.99 89.52 41.34 74.88 90.01 104.23 101.19 105.48 60.7 36.57 52.62 61.19 53.96 63.35 48.73 69 78

38.74 20.74 27.78 7.31 8.67 36.03 62.63 61.45 52.18 49.83 34.74 69.51 97.59 103.96 89.43 68.4 74.47 60.9 56.5 44.49 44.74 NA NA

Sources IEA, Energy Balances of OECD countries, IMF database & World Bank, 2022 Note NA data is not available

approach. This approach should focus on improving connectivity, both in terms of physical infrastructure and digital networks. Additionally, it should prioritize strengthening diplomatic relations with the region, as well as other influential global and regional powers. Diversifying energy partnerships is also crucial, not only in terms of sources but also across different sectors. Another key aspect is promoting stability and security in conflict-affected areas. Lastly, it is essential to strike a balance between the region’s interests and values, while considering domestic needs, global aspirations, and international obligations. The Belt and Road Initiative (BRI) and China’s strong economic connections with various Eurasian nations present a significant challenge for India. One potential outcome is the presence of competition for

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resources, which may result in increased prices and added complexity to collaborative endeavors. India’s pursuit of energy resources in the region may face complications due to Russia’s historical alignment with China and its own energy interests. India faces logistical challenges due to the absence of convenient land routes to the Eurasian region, which can be attributed to geographical barriers. The security situation in neighboring countries such as Pakistan and Afghanistan only serves to worsen the situation. In the Eurasian region, there are historical tensions that exist between countries, like the Nagorno-Karabakh dispute between Azerbaijan and Armenia. These conflicts have the potential to impact the stability needed for long-term energy projects. The imposition of Western sanctions on countries such as Russia and Iran can potentially hinder India’s capacity to freely participate in energy agreements with these nations, thereby impacting its diplomatic efforts. When it comes to pipeline politics, one key aspect to consider is the route that proposed or existing pipelines take. For instance, pipelines such as the Turkmenistan–Afghanistan–Pakistan– India (TAPI) or the North–South Transport Corridor often have to navigate through regions that are politically unstable or marked by conflicts. This factor significantly increases the level of risk associated with these pipeline projects. The financial feasibility of long-term projects in Eurasia can be affected by the fluctuations in global energy markets, which are influenced by events in the Middle East or decisions made by OPEC. When it comes to the intersection of technology and environmental concerns, one key aspect to consider is the adoption of new technologies aimed at promoting cleaner energy sources. However, it is important to acknowledge that implementing these technologies often necessitates substantial financial investments. Additionally, the potential environmental impact of energy projects can sometimes become a contentious issue, particularly when different countries are involved.

Way Forward One possible approach for India to consider moving forward is to focus on multilateral diplomacy. By actively participating in multilateral forums and agreements, India can create a more stable and reliable platform for energy cooperation. Enhancing bilateral ties with specific countries can frequently lay the groundwork for stronger energy relationships. One way

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to address the capital and technology requirements in the Eurasian energy sector is by encouraging the participation of Indian private enterprises. Diversification is a strategy that involves investing in a range of options, including both fossil fuels and renewables, in order to mitigate geopolitical risks. To achieve energy security, India will need to adopt a sophisticated and diverse diplomatic approach in its engagement with the Eurasian region. Significant potential rewards in terms of energy security, economic growth, and geopolitical influence exist, despite the challenges that may be faced. In this chapter, India’s pursuit of energy has been analyzed through the lens of energy economics taking various factors into account with respect to the Eurasian region. It has emphasized the significant role of energy in driving economic growth and development, underscoring the necessity for India to safeguard its energy security and regional interests. The diverse sources, sectors, actors, and initiatives that play a role in India’s energy quest and cooperation with Eurasian countries have been taken into account. These include oil, gas, nuclear, hydro, electricity, and renewable energy, as well as partnerships with Russia, Kazakhstan, Turkmenistan, Uzbekistan, Azerbaijan, etc. The geopolitical actors, factors, and infrastructure cooperation such as Iran, Turkey, Afghanistan, Pakistan, China, the US, the EU, INSTC, TAPI, Chabahar port, and various bilateral agreements have been taken into account. It has been found that during the study, it is evident that there exists a substantial disparity between the worldwide production and consumption of crude oil and natural gas, underscoring the pressing need and limited availability of these vital energy resources. It can be observed that the Gulf countries, particularly Saudi Arabia, hold the top position as both the largest producers and consumers of crude oil and natural gas globally, with Russia and the US following closely behind. On the contrary, Europe, China, the US, and Japan stand as the leading importers of crude oil and natural gas globally, with India also making significant strides as a prominent oil market in Asia. India’s increasing consumption of crude oil and natural gas has led to a reliance on external sources, as its domestic production falls short. India encounters a range of geopolitical and geostrategic obstacles in its pursuit of energy, including the volatility and insecurity in Eurasian region, the opposition and rivalry from regional and global players, and the unpredictability and fluctuations in global energy markets.

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Although India has shown keen interest in the pursuit of energy security and cooperation with the Eurasian region, it has not been able to capture the potential. Its immense potential lie in strengthening its energy collaboration with the Eurasian region, a resource-rich area abundant in oil and gas. India has undertaken multiple efforts and measures to enhance its connectivity and reach to the Eurasian region, including the implementation of projects like the INSTC, TAPI gas pipeline, Chabahar port, and bilateral agreements on energy exploration and trade. However, on account of limited resources and political will, the region’s internal and external geopolitical, geo-economic, and geostrategic dynamics have left indelible imprints on these efforts to realize their full potential. In conclusion, the discussion has shed light on India’s energy pursuit in the Eurasian region, highlighting its complexity and relevance, involving various factors and actors. In conclusion, the discussion has put forward several policy recommendations that can effectively enhance India’s engagement and cooperation with the region. These include strengthening diplomacy, diversifying partnerships, promoting regional stability, and balancing interests. In conclusion, the discussion has shed light on the limitations and implications of this approach, including the feasibility, effectiveness, sustainability, and compatibility of India’s energy strategy in the region. In conclusion, the discussion has enhanced our comprehension of the geopolitical challenges India faces in its energy pursuit in the Eurasian region.

References Adolfsen, J. F., Gerinovics, R., Manu, A.-S. and Schmith, A. (2023). Oil Price Developments And Russian Oil Flows Since The EU Embargo And G7 Price Cap. Available at: https://www.ecb.europa.eu/pub/economicbulletin/ focus/2023/html/ecb.ebbox202302_02~59c965249a.en.html Accessed on 7 September, 2023. Bhattacharya, S. C. (2011). Energy Economics: Concepts, Issues, Markets and Governance. Springer-Verlag, London Limited. BP Statistical Review of World Energy. (2022). Retrieved from bp Energy Outlook 2023 (https://www.bp.com/content/dam/bp/business-sites/en/ global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-out look-2023.pdf). Accessed on 31 Jul 2023. Brenner, M. (2012). The Geo-Politics of Energy. Energy Institute. Retrieved from https://energy.utexas.edu/the-geo-politics-of-energy. Accessed on 2 Apr 2016.

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IEA. (2015). World Energy Outlook Special Report: India Energy Outlook. International Energy Agency. IEA. (2021). Energy in India Today – India Energy Outlook 2021 – Analysis. IEA. Accessed from https://www.iea.org/reports/india-energy-outlook2021/energy-in-india-today. Accessed on 7 September, 2023 IEA. (2023). World Energy Investment 2023. International Energy Agency. Jain, A., & Ummat, A. (2015). NITI’s Energy Sector Planning Tool—IESS, 2047 . NITI AYOG. Retrieved From http://niti.gov.in/content/niti%E2%80%99senergy-sector-planning-tool-iess-2047. Accessed from 5 Apr 2016. Ministry of Coal, Government of India. (2021). Provisional coal statistics 2020-21. Available at: https://coal.gov.in/sites/default/files/2021-06/Pro visional-Coal-Statistics-2020-21_0.pdf Accessed on 7 December, 2023. Mukhamedova, N., & Wegerich, K. (2022). Energy Security of Hydropower Producing Countries—The Cases of Kyrgyzstan and Tajikistan. Energies, 15(21), 7822. Pant, G. (2015). Introduction: India’s Emerging Energy Relations: Issues and Challenges. In India’s Emerging Energy Relations (pp. 1–15). New Delhi: Springer India. Sachdeva, G. (2010). Regional Economic Linkages. In Joshi, N. (2010). Reconnecting India and Central Asia: Emerging Security and Economic Dimensions. Singapore: Central Asian-Caucasus Institute Silk Road Studies Program. Sweeney, J. L. (2002). Economics of Energy. Retrieved from https://web. stanford.edu/~jsweeney/paper/Energy%20Economics.PDF Accessed on 2 March 2016. U.S. Energy Information Administration. (2022). Country Analysis Briefs: Turkmenistan. Available at: https://turkmenistan.un.org/en/213125-commoncountry-analysis-2022-update Accessed on 07 December, 2023. US Information Administration. (2015). China International Energy Data and Analysis. Retrieved from https://www.eia.gov/beta/international/analysis. cfm?iso=CHN. Accessed on 13 Mar 2023. World Economic Forum. (2012). Energy for Economic Growth Energy Vision Update 2012. IHS CERA, USA. https://www3.weforum.org/docs/ WEF_EN_EnergyEconomicGrowth_IndustryAgenda_2012.pdf. Accessed on 7 December 2023. Yumkella, K. K. (2010). Energy for a Sustainable Future. Retrieved from https:// www.un.org/millenniumgoals/pdf/AGECCsummaryreport[1].pdf. Accessed on 7 December, 2023.

CHAPTER 7

Energy Geopolitics of Eurasia: Challenges and Options for India’s Energy Diplomacy

Spheres of influence we have never admitted, Spheres of interest we have never denied. —Lord Balfour (1898)1

There is a strong correlation between energy and geopolitics because of the political angularity of energy in the Eurasian age, which has made global politics more complicated and characterized by the “battle for oil and gas.” The rivalry between regional and international powers for control over the energy markets has been fueled by the contemporary geopolitics of energy. By employing coal and oil for strategic objectives, the British Empire (which included Germany) gained strategic dominance over the world in the eighteenth and nineteenth centuries. The US had dominated the world in the twentieth century by dominating oil fields in places rich in energy, such as Africa and the Middle East, during the post-war era. New energy users like China and India emerged as a result of the post-Cold War era and the political and economic changes of the twenty-first century, which put an end to the 1990s debate about the “shift from oil to sustainable energy resources.” Furthermore, 1 Quoted in Sweijs, T., Oosterveld, W. T., Knowles, E., and Schellekens, M. (2014). Why Are Pivot States So Pivotal?: The Role of Pivot States in Regional and Global Security (Vol. 4). The Hague Centre for Strategic Studies.

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the growing geo-economic importance of natural gas in the twenty-first century has signaled the end of the era in which oil and gas dominate the international energy basket by becoming essential to developing nations. This transitional period has been dubbed the New Energy Order Politics (NEOP) by Aribo˘gan and Bilgin (2009, p. 123), wherein protecting energy access and controlling energy resources have taken precedence over security ideas that are heavily imbued with ideology. Geopolitical elements that give domestic powers a strategic advantage over foreign powers are a country or region’s size, location, and plenty of natural resources. For millennia, the Eurasian region has been thinking about these salients (Zabortseva, 2012, p. 170). While many see Eurasia as the large landmass that includes both Asia and Europe, it actually refers to two continents with distinct political and socio-economic civilizations that are situated in disparate geographic regions. The Caucasus and Caspian regions, which are geographically adjacent and feature a mix of European and Asian civilizations, maintain a separate region where both European and Asian cultures have influence over this region, which many refer to as a landlocked island. Large nations including China, India, Iran, ˙ seri, 2009, p. 34). It has Turkey, the EU, and Russia have landlocked it (I¸ become a focal point of today’s global energy geopolitics due to these nations’ competing goals in gaining geopolitical influence, which both attracts and disrupts the power dynamics between major powers. The energy policy of India has been influenced by prevailing geopolitical considerations within the emerging “energeopolitical order.” In preceding chapters, the study has examined the perception of energy security in India, as well as the energy policies and diplomatic measures implemented by the Indian government to attain energy security on a global scale, with a specific focus on the Eurasian region. The role of India in the energy dynamics of the Eurasian region has emerged as a subject of energy geopolitics, necessitating a thorough comprehension. India seeks to obtain access to Eurasian energy resources, with the potential to assume the role of a security and stability supplier within the area. Understanding the requirements of the Caspian countries that have not been fulfilled by Russia, China, and other influential actors in the region is of significant importance for India. The primary factor that compelled India to shift its focus towards Eurasia was the identification of significant natural gas reserves, predominantly located in Russia, Turkmenistan, Uzbekistan, Iran, Qatar, and Iraq. These reserves are strategically positioned along the routes encompassed by the International North–South

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Transport Corridor (INSTC). The transportation of natural gas requires a more extensive infrastructure compared to that of oil. The Eurasian region holds significant relevance within India’s broader Eurasian security framework, as it is conceptualized as an extension of India’s neighboring countries. India seeks to enhance its energy security by geopolitical expansion in this region. The acquisition of energy resources from the Caspian region poses a significant and intricate challenge for India, particularly due to the complex geopolitical factors associated with this endeavor. The primary contention of the study posits that energy security continues to be a prominent factor influencing Eurasian foreign relations, as it becomes entangled within the intricate dynamics of geopolitics. The primary aims of this chapter are to examine India’s geopolitical influence in the region and to assess the obstacles and potential strategies for achieving energy security in the context of current energy geopolitics. This analysis will consider both the competitive and cooperative dimensions of India’s energy goals.

Existing Uncertainties: How Energy Is Inducing Geopolitical Antagonism? Energy has become the spatial aspect of the contemporary geopolitics. Before understanding the current energy geopolitics in the region, it would essentially be helpful to be acquainted precisely with the geopolitical clashes over energy resources. However, the energy-induced clashes are not new, even were also existed during the World War II and witnessed the bitter legacy of the colonialism. The old energy system didn’t remain the same. The struggle for energy resources has been critical component in recent geopolitical upheavals such as the Iran–Iraq War (1980–1988), the Gulf War (1990–1991), the US-led Iraq War (2003–2011), Georgia’s five days War (2008), and the Ukraine crisis (2014), etc. These conflicts are the recent examples which are undergoing geopolitical clashes over oil and gas supplies. Klare (2014) has argued that oil and gas have been triggering geopolitical conflicts across the world. He acknowledged that the control of these commodities have become a geopolitical component of maximizing national powers. oil and gas account for generating huge revenues for the governments of energy-producing Russia, Syria, Iran, Iraq and even for some Central Asian countries. Their strategic stateowned companies have also been exercising colossal power in their energy equities. The ideational conception of “controlling oil and gas producing

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areas of these countries (including Caspian Sea)……also increase control over consequent allocation and collection of energy revenues” has become a critical moot point in the emerging geopolitical clouts. In such a backdrop, the world’s balance of power has been shifting along with changing sources, consumers, and suppliers. The global energy landscape has changed given the 2000s geopolitical conflicts in energy-producing and transit countries, emergence of Russia as revanchist state in Eurasia (Sussex, 2015) and the new oil and gas discoveries in the region, etc. Moreover, with the advent of OPEC, the swift nationalization of oil reserves has brought down the dominating role of Seven Sisters (energy companies of Western projecting powers, discussed in Chapter 3) of the twentieth century by replacing them with new state-owned giants such as National Iranian Oil Company, Saudi Aramco, China’s CNPC, Russia’s Gazprom, Venezuela’s PDVSA, and Petronas of Malaysia (Al Jazeera, 2013). The persistent paradoxes over the legal status of the Caspian Sea Basin and its misleading conception—“whether it is sea or lake,” has made Caspian Sea a crush zone between the littoral states—Azerbaijan, Russia, Kazakhstan, Turkmenistan, and Iran. Their claims over the ownership of hydrocarbon reserves in Caspian Sea Basin has become an unresolved issue thereby hindering the resources’ exploration activities including trans-Caspian pipelines for transporting oil and gas. Against the United Nations Convention on the Law of the Sea, Russia and Iran have concluded many bilateral treaties2 ascertaining Caspian Sea as a Lake for equal division of resources between them (Zimnitskaya et al., 2011, p. 2). It is important to mention that the majority of Caspian oil and gas reserves are in Russia, Iran, Kazakhstan, and Turkmenistan. All littoral states have been trying to resolve their differences over the coherent division of the Sea for the delimitation of surface water and the seabed bottom since the Soviet Union disintegration, but remained unresolved due to diverse interests and motives (Karbuz, 2016, pp. 62–63). This is also one of the important reasons of being a geopolitical landscape for great powers (the US, EU, and China) because the oil and gas reserves in the region are not controlled by OPEC and Russian Federations. It 2 For more details, see the Treaty of Friendship (1922, 405–407) (Articles 7 and 11); and the Soviet-Iranian Trade and Navigation Agreement (1940, 419); Butler (1971, 101– 103) expounds the legal regime governing the Caspian Sea exploitations before the Soviet Union disintegration (Zimnitskaya & Von Geldern, 2011, p. 2).

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has given a chance to all Caspian Sea managers to diversify their energy supply and great powers to play geopolitical role (Heinrich et al., 2015, p. 107). The growing gap between demand and supply in energy-consuming countries like India, China, and Japan has been resulted into high energy prices. It is adding new assertiveness in energy-producing countries as well as in transit countries’ policies. Producing countries have been shifting their priorities from West to East and controlling the energy prices. Transit countries like Turkey, Pakistan, Iran, and Ukraine have been developing the feelings of their geopolitical roles as energy hubs. Russia’s annexation of Crimea has told the story of doubling its offshore territory falling in the Black Sea which is estimated to have vast reserves of oil and natural gas (Klare, 2014). It happened in this background that Crimea’s vast reserves could make Ukraine energy sufficient against the interests of Russia. In the recent decade, Russia’s involvement in the Syrian crisis appears to have been driven by Europe’s shift to Middle Eastern energy, given the energy cut from the Kremlin and deep strategic interests in the Naval Base Tartus, situated on the mouth of the Mediterranean Sea (Temerko, 2015). The Baku, Tbilisi, Yerevan, and Ceyhan have been acknowledging their geopolitical position as the controlling points of oil and gas transportation from the Caspian and the Middle East region (O’Hara, 2004, pp. 148–149). The America and Russia’s aspirations of controlling the region have been haunted with the collapse of Soviet Union; new competitors (China and India) joined the game with limitless oil and gas appetite. The US and EU have more common interests in the region than that of divergences. Therefore, it is no longer a game of the US vs. Russia, now a part of multiple geopolitical players’ grand Eurasian strategy (Al Jazeera, 2013), each having “skin in the game.” China and India have emerged as new players in the energy geopolitics not only in the Eurasian region but also in the other parts of energyrich regions like the Middle East, African, and South American regions/ continents. China’s growing conflict over protecting energy-producing bed in South China Sea and its pipeline and connectivity strategies (e.g. OBOR and CPEC) in Central Asia and the Greater Middle East have been driving factors of its greater engagement in global energy geopolitics (Pickford, 2017). In this energy geopolitical order, India also has its own geopolitical and strategic contemplations, which are accustomed

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to reviving the Silk Route through outlining its multi-aligned policy for Eurasian states (Sikri, 2008). In the current multi-centered energy geopolitical scenario, the US, EU, Russia, China, and India have been creating atmosphere of “New Great Game.” Additionally, the transit actors like Pakistan, Iran, Turkey, Ukraine, and Georgia have been finding their central position at energy transportation networks as they are seeking geopolitical leverage in their favors. Caspian countries (Azerbaijan, Kazakhstan, and Turkmenistan) and Uzbekistan, however, have been extensively interweaving the Eurasian region into cross-national and cross-regional connective cobwebs involving extra-regional cooperation, given their landlocked geography and sovereign interests. Categorically, Eurasia deserves a significant attention in the current energy order as a major addition to global energy market (Kubicek, 2013, p. 172). It becomes imperative for policymakers to go with strong energy diplomacy at par with changing dynamics shaping the state behavior in current global order.

Energy Geopolitics: “Geopolitical Uncertainty Determines Interests?” Geopolitics defines the political and economic power of particular state in relation to natural resources and geographic space. The geopolitical uncertainty emanates from various associated geopolitical risks and turbulence created/emerged by/in the state and non-state actors uncertain relations contributing to the international political environment. The geopolitical uncertainties include globalization, energy price volatility, terrorism disruptions, territorial disputes, changing international structure, emergence of new global actors, financial crisis, etc. These dynamics determine the mutual interests of states as how to maintain their relations in changing geopolitical environment. And today’s geopolitics cannot be understood without the concept of energy security. Amineh and Houweling (2005a, 2005b, p. 82) have rightly concluded that “oil and gas are not just commodities traded to international markets, control over territory and its resources are strategic assets.” The statement holds a strong relevance particularly in the case of Eurasian region, wherein the various major actors have been seeking to increase their control over the potential or exiting energy resources. It has become geopolitical playing field for their diplomacy which draws significant attention than that of any other place in the world (Kinzer, 1998). It would continue to draw

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attention even in the twenty-first century, given its geo-economic and geopolitical salience. A lot of literature is available on the major power struggle for Eurasian energy resources and balance of power with different scholarly (Amineh & ˙ seri, 2009; Klare, Houweling, 2005a, 2005b; Atal, 2005; Blank, 2012; I¸ 2004; Kubicek, 2013; Laruelle et al., 2010; Olcott, 2011a; Sussex & Kanet, 2015) observations about the New Great Game. Some scholars (Molchanov & Yevdokimov, 2004; Huda & Ali, 2017) have also included non-state actors for multi-stakeholder analysis providing advanced views over geopolitical struggle for energy. However, it is argued that with the growing stake of potential transit countries as the pivotal zones of great powers in the Eurasian energeopolitics is somewhat overlooked in the existing literature. A change in their associational position with great powers could change the game in favor of other ones. It would impact on the great powers’ decision-making. Moreover, emergence of Caspian onshore and offshore energy-rich states as geopolitical pillars have been deciding the fate of advantageous and disadvantageous position of the great powers. All actors in this game appear to be struggling for misleading opportunity/difficult choice in which gains for some will be loss for others in both political as well as economic terms. In this uncertain geopolitical tussle, how does India get the most out of this, would be challenging question if it really considers itself a geopolitical and strategic actor in the region. The current energy geopolitics needs a different critical understanding as shown in Fig. 7.1. The region remained a turf for geopolitical struggle between major powers (global or regional hegemons) for defining/exerting their sphere of influence/interests. They have been expanding their sphere of influence in the region by establishing close political and economic links with countries of their potential energy complex zone through pivotal zones (Fig. 7.1). Russia, China, the US-EU, and India have been playing geopolitical role seeking access to energy resources. The United States and EU have been promoting liberal-democratic values in the Eurasia which assume human right above the sovereignty. In contrast, Moscow has given its own Russian-style idea of Sovereign Democracy to post-Soviet nations which believe in democratic governance with substantial level of governmental control. China, on the other hand, has designed a noninterventionist approach which posits it as a responsible state in the region

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Global Hegemons Major Powers' Eurasian Turf Regional Hegemons

Eurasian Energy Geopolitics

Pivotal Zones

Transit States

Energy Complex Zones

Heartland States

Fig. 7.1 Energy geopolitics of Eurasia in a critical perspective (Source Prepared by the Researcher)

(Shen, 2011). India as a new player but old ally of Russia has been proffering its image as regional security stabilizer which assumes cooperation and inclusivity as a mantra of regional integrity. Eurasian Pivotal Zones refer to transit countries; and geopolitical powers have been trying to get them under their sphere of influence through political, economic, and diplomatic means. Turkey, Pakistan, and Iran are falling significantly in the major pivotal zone of geopolitical powers. Given the changing role of Pivotal states, on the other hand, they use their geographic location for geopolitical purposes by carving out a niche while pursuing a different range of politics (Sweijs et al., 2014). A change in their association with great powers can have significant ramifications for regional security paradigms. Energy Complex Zones refer to heartland states (energy-rich states) or a collection of energy-rich countries in Eurasia for geopolitical powers (seeking stability in access to energy assets) as well as for pivotal zone (seeking energy security as well as geopolitical leverage) in today’s energy geopolitics. It includes Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan [Afghanistan, Kyrgyzstan, and Tajikistan] as energy hubs.

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Heinrich and Pleines (2015) in their empirical study of Azerbaijan, Kazakhstan, and Turkmenistan, have shown that these countries have been perceiving themselves as actors in the geopolitical struggle given their significant role in the various regional energy projects not merely as the vassal states in the hands of great powers. Though, Kyrgyzstan, Tajikistan, and Afghanistan are not intentionally covered in the focus of study but have been playing an important role as gateway-hinges (for India, the US, and China) by using geopolitical pluralism of competing powers for Eurasian energy. Stability in these states would remain significant concern for major powers pursuing energy security objectives. Extrapolated from China’s OBOR concept and India’s INSTC, Energy Complex Zone has been facilitating a geopolitical juncture between the Asian and Western powers. The energy complex states either go for multiple/bilateral alignments or wide-ranging transitions from one sphere of influence to another sphere of influence for great powers. Their landlocked geography extensively made them to interweave the Eurasian region into cross-national and cross-regional connective cobwebs in order to transmute the region from “conflicting zone” to “zone for accommodation.” Every member state has its cross-border outreach to stimulate sustainable socio-economic development, reinforce international and regional security, and promote humanitarian and cultural relations. In line with contemporary global and regional security architecture, these states have been striving for multilateral expansion for mapping a far-reaching coalition with global and regional partners to defend their common position on a broad range of issues (energy supply and security) that are, directly/indirectly linked with their geopolitical position at the heart of Eurasia. The substantial oil and gas reserves in the region only provide a ground to Eurasia’s geopolitical story. The other existing competitive, conflicting, and cooperative aspects of energy resources and changing geopolitical map of energy routes have become a critical part of the New Great Game

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for accessing the Eurasian landmass.3 To understand the current geopolitical game for energy access and the discovery of new export routes in Eurasia, the study intends to briefly analyze the complexity of the interests of major powers (global and regional) involved in the Eurasian energy resources in relation to their pivots of interest.

Multi-Vector Approach of Energy Complex Zone Countries towards Major Powers Eurasian heartland economies—Kazakhstan, Turkmenistan, Uzbekistan, and Azerbaijan (non-OPEC countries) have started adopting multi-vector approach to balance their interests with major powers. The struggle between major powers has made easy for them to search for new energy transit routes and thus become an attractive location of foreign investments (Romanowski, 2014). In other words, in line with contemporary global and regional security architecture, they have been striving for multilateral expansion for mapping a far-reaching coalition with global and regional partners to defend their common position on a broad range of issues that are, directly/indirectly, associated with security and stability of the region. Kazakhstan Kazakhstan has been leading country in oil production in the region, with substantial annual output of 79.3 million tonnes in 2017, out of which approximately 85% is exported. It elucidates geopolitical juncture joining two continents—Asia and Europe. Russia, as a regional hegemon, has been maintaining its monopoly since the Soviet times and occupying large proportion of export routes for Kazakh oil. It has also been using Kazakhstan as transit country for importing natural gas from Turkmenistan and Uzbekistan, through the Central Asia-Center Gas

3 It is already clear in the study that instead of using term Central Asia, the Eurasian geopolitics has been determined as a focus of analysis from the perspectives of energy resources (oil and gas) scattered around the Caucasus and Caspian Sea region which also include the major energy producers such as Azerbaijan, Russia, northern Iran; and Turkey, Iran, Ukraine, and Pakistan as major transit routes. Though, Afghanistan, Tajikistan, Kyrgyzstan are not oil and gas producers but are significant aspects of stable energy supply.

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Pipeline (CAC) system and Caspian Pipeline Consortium (CPC-TengizNovorossiysk oil pipeline). The CAC gas pipeline system was built during the Soviet times (1969) which is being controlled by Moscow’s largest natural gas unit—Gazprom (Mamedov, 2001; Stegen & Kusznir, 2015, p. 95). In the recent year, Russia’s largest oil company—Lukoil has been sharing a substantial stake (13.5%) in Karachaganak Project, located in the West-Kazakhstan region. However, following its multi-vector approach Kazakhstan has started supporting the supply of a significant amount of oil to China and the EU as an attempt to avoid Russian monopoly. The Atyrau-Alashankou pipeline to China and participation in the China-led One Belt, One Road forum (May 14–15, 2017) (Orazgaliyeva, 2017) are some of the key examples that underscore its multi-vector and impartial approach to foreign policy. For this, it has come up with important agreements with China and the EU to lay out pipeline network such as BTC, Kazakhstan–China Oil Pipeline and Turkmenistan-China Gas Pipeline. In addition to this, Kazakhstan is also in a deal with Azerbaijan to develop oil transportation infrastructure between Kashagan oil field and Baku, through Trans-Caspian Oil Transportation System (TCOTS). The project includes a 739 km overland pipeline from Eskene to Kuryk (Kazakhstan). It is called a Kazakhstan-Caspian Transportation System (KCTS). From Kyryk, close to Aqtau Port, it will travel underneath the Caspian Sea to Baku, to be called Trans-Caspian Oil Pipeline (TCOP) and make its way to Georgia, Turkey, and beyond (Aliyeva, 2017; Cutler, 2016). In this way, it not only strengthens its relationship with China in the East and Caucasus countries to its West, but also reduces the influence of Russia over its exports. On its part, the EU has already continued to expand its cooperation through multilateral partnership agreement with Central Asian nations. Firstly, Kazakhstan signed the Enhanced Partnership and Cooperation Agreement (EPCA) in 1994 with the EU and got consent of European Parliament. Till date, Kazakhstan has received a ratification of 21 out of 28 EU members on EPCA (Satubaldina, 2018). Apart from this, the US companies (Exxon Mobil and Chevron Corporation) and Indian companies (OVL and GAIL) are also having significant stakes in Kazakhstan oilfields, which have been covered in ensuing sections. After the announcement of OBOR by China, the total trade value between Russia and Kazakhstan dropped to about 50%, from $21 billion in 2014 to $13 billion. On the other hand, the trade between Kazakhstan and the EU has seen a steady rise from 29 to 38% (Norling, 2014). Besides,

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it has also started developing good relations with India. Thus, these activities highlight the geopolitical flashpoints of Kazakhstan towards Russia’s monopoly and shore up its geo-economics cooperation with several actors. Turkmenistan Turkmenistan has been possessing huge amount of gas deposits in its onshore and offshore territory and the main exporter of gas in the region. It has produced annually 60.1 Million Tonnes of Oil Equivalents (Mtoe) in 2017 out of which about 60% it has exported. Its “positive neutrality” approach has left the geopolitical competition between Kazakhstan and Uzbekistan for global recognition and regional dominance (Olcott, 2011a, pp. 23–24). Ashgabat politically like to remain reclusive and neutral from Russian-led organizations like CIS, SCO, and Eurasian Economic Community (EAEC) but economically it could not stop itself from diversifying its energy supplies, due to consequent breakup with Russia. Kremlin’s monopolistic and blackmailing approach to close down Turkmen pipelines to Ukraine over gas price disagreement have elevated tensions between the both (Perovic, 2005). In this way, Turkmenistan’s discontentment over its gas export arrangements with Moscow and tensions over bordering the Caspian Sea have pushed it to go for multi-vectorism. First, it shocked Russia by concluding a landmark deal with Iran for 200 km Korpeje–Kordkuy gas pipeline in October 1995 which became operational in 1997 (Milani, 2016, p. 23). Second, Turkmenistan and Iran had reached the agreement in July 2009 to build Dauletabad–Sarakhs–Khangiran pipeline, is also to be called Dauletabad– Salyp Yar pipeline. It became operational in January 2010 which is directly connected to Iran Gas Trunkline (IGAT) system through Khangiran gas refinery of Iran (BBC News, 2010). Besides, the recent venture was US$7.3 billion Central Asia-China gas pipeline after Kazakhstan–China oil pipeline. It allows the export of around 55 bcm gas annually to China (Eurasianet, 2017). It was signed between China and Turkmenistan on April 2006 (Kimmage, 2006) and in 2007, Uzbekistan also inked the agreement to construct pipeline of Uzbek section (UzDaily, 2007). It was completed in December 2009 and other offshoot lines (B and C) of this have also been completed by 2014. It allows Turkmen gas to reach directly to China without any obstruction.

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From regional perspectives, it offers a connectivity and energy cooperation between Ashgabat, Tashkent, and Astana (Romanowski, 2014). However, plans are there to include Kyrgyzstan and Tajikistan as a Dline of this mega project, but due to some local and technical problems, it has become a start-and-stop affair (Eurasianet, 2017). Romanowski (2014) has attempted to show that China is already a largest importer of Turkmen gas which is likely to increase by threefold by the end of this decade. Russia, on the other hand, has been seeing dramatic fall in trade with Ashgabat since its 2009-pipeline blast and Gazprom’s decision to absolute cut import of Turkmen gas. Though it is trying to resume its relations with Moscow to sell gas to CIS and Eastern European countries but the chances of returning to the previous levels are seemingly unlikely (EAsia Daily, 2017). Besides, Turkmenistan has also preferred westwards EU supported 3300 km Nabucco gas pipelines as an alternative to Russian proposed South Steam project (Barysch, 2010). To the Southwards, Turkmenistan has been planning to feed its natural gas to war-torn Afghanistan, Pakistan, and India. It remains extremely uncertain and likely to be finalized in the coming decade. If it successfully functions, it would play a remarkable role in stability and peace of the region (Caspian Policy Center, 2018). Undoubtedly, both Turkmenistan and Kazakhstan have divulged their initiatives towards long-go story of complex geopolitical/economic binary. Uzbekistan Uzbekistan, a double landlocked country, is not a major energy exporter in Eurasia but playing an important role in Central Asian energy theater. It has been sharing border with three gateway-hinge states— Tajikistan, Kyrgyzstan, and Afghanistan—vulnerable to Islamic/ethnic fundamentalism. The managing editor of The Diplomat think-tank has described Uzbekistan as “energy-diverse” rather than being “energyrich.” However, it exports nominal amount of natural gas to the market (Putz, 2017a). Natural gas makes up 97% of Tashkent’s energy balance due to a shortage of other energy-producing sources such as hydro, coal, etc.4 As per BP Petroleum Statistical (2017), the export of Uzbekistan 4 Global Legal Insights—Website. Energy 2018 I Uzbekistan. Retrieved 27.04.2018, from https://www.globallegalinsights.com/practice-areas/energy-laws-and-regulations/ uzbekistan.

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was equal to 10 Mtoe in 2017, which is equivalent to approximately 19% of produced gas in the country. Nevertheless, its natural gas exports are more balanced than that of Turkmenistan. It exports 1.35 Mtoe natural gas to Kazakhstan, 4.5 Mtoe to Russia, and 3.87 Mtoe to China (Putz, 2017a). Nevertheless, internal consumption remains significant factor in the determination of its gas exports volume. It is noteworthy to mention that Tashkent constitutes substantial integrates in Central Asian energy grid and more stable than its neighbors such as Tajikistan, Kyrgyzstan, and Afghanistan. The Gazprom controlled pipeline system—CAC, crisscrosses Uzbekistan. It supplies the Turkmen gas via its western territory to Kazakhstan and further to Russia. Uzbekistan also supplies gas to Southern Kazakhstan, Tajikistan, and Kyrgyzstan for generating electricity in these countries (Olcott, 2011a, p. 21). To export 10 bcm gas annually to China, Tashkent’s Uzbekneftegaz signed a deal with Beijing’s CNPC in 2011, which became operational in 2014 (Azer News, 2011). After assuming the office of Uzbek President in 2016, Shavkat Mirziyoyev5 has started working towards relaxing the economic and trade regulations, particularly in export procedures and transport links to improve its relations with neighboring countries. It is manifested in his recent visit to Turkmenistan in March 2017. During this meeting, Turkmenistan’s state energy company Turkmennebit (Turkmen Oil) and OzbekNeftGaz signed a MoU on joint exploration and development of deposits in the Caspian Sea under Turkmen sector. It is the first time in Ozbek’s history to start exploration work abroad. Additionally, Uzbekistan also expressed its will to join the TAPI project (Egamov, & Sattarov, 2018) which would not only strengthen its outreach to southward Asia but also facilitate connectivity to Indo-Russia-led INSTC connectivity project, which is still a missing link. However, India’s Ashgabat agreement Turkmenistan has already marked this connectivity that also includes Uzbekistan. Moreover, it is also seeking its relations with the EU. Recently, it has renewed a MoU with the EU on cooperation in the energy field in February 2017 (EEAS, 2017). Lastly, its 5 President Shavkat Mirziyoyev become the elected President after the death of Former President Islam Karimov on September 2016. Prez. Karimov ruled the Uzbekistan for over twenty-five years. His tight regulatory system on investment flow caused the lack of modern energy infrastructure that resulted in less energy production. In contrast to his predecessor’s legacy, the newly elected President Mirziyoyev has brought dramatic economic reforms in Uzbekistan towards its regional as well as global recognition (Qadiry, 2013).

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relations with Russia remained zigzag and it would balance these relations with China. But, in Russian perspectives, Tashkent’s location has been facilitating a transit route to South Asia for its geopolitical and strategic maneuverability. Azerbaijan Azerbaijan has been an important energy player in the Caspian region and holds a major proximity between Russia and the EU in Caspian energy space. Against the interests of Russia and Iran’s agreements to consider Caspian a Lake, Baku along with Astana and Ashgabat have been claiming it as a Sea. This controversy forces these countries to go for multivictorism approach (Durso, 2018). The global financial crisis (2008) and the resultant reduction in natural gas consumption in the EU gas market due to price increases and further fueled by Ukraine crisis (2013–2014), has given Azerbaijan a front seat in Caucasus energy supplies. While, in 2009, natural gas consumption in all EU countries was 462.8 bcm, it was around 494.9 in the year of 2008, a reduction of around 7%. Similarly, Ukraine crisis occurred in 2013, consequently Russian gas supplies were cut to the EU. It impacted the EU gas consumption by around 12%, from 431 bcm in 2013 to 383 bcm in 2014.6 All these geo-economic and political uncertainties have prepared a geopolitical ground for Azerbaijan to become central to decision-making in the Eurasian energy space created by Russia. However, Azerbaijan is latecomer in the Eurasian energy landscape as it becomes a net exporter of gas after 2006–2007, with the start of production and exploration activities in the Shah Deniz field,7 situated in Azerbaijan’s claimed area of South Caspian Sea deep waters (Pritchin, 2010, p. 127). With the discovery of two new offshore gas fields— Umid gas field (2010) and Absheron (2011) in Baku (Caspian Sea), it is purportedly to hit approx. 350 bcm natural gas and 45 million tonnes of gas condensate. Consequently, as SOCAR’s (The State Oil Company of Azerbaijan Republic) Vice-President Khoshbakht Yusifzade avowed that 6 Satista—The Statistics Portal Website Data Base. Retrieved 28.04.2018, from https:// www.statista.com/statistics/265406/natural-gas-consumption-in-the-eu-in-cubic-meters/. 7 The Shah Deniz field is primarily operated by BP Azerbaijan with larger share 28.8%. Other partners include SOCAR (10%), Petronas (15.5%), Türkiye Petrolleri Anonim Ortaklı˘gı—TPAO (19%), LUKoil (10%), National Iranian Oil Company—NIOC (10%), and SGC Upstream (6.7%†). See the Website—BP Azerbaijan.

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Azerbaijan’s proven gas reserves will approximately hit the potential of 2.6 tcm. It will enhance its potential of export more natural gas in the near future. Azerbaijan’s SOCAR (40%), France’s Total (40%) and Engie (Gaz De France Suez) (20%) have been sharing the development and exploration activities of these fields (Ismayilov, 2011). Russia’s Rosneft has also been seeking a stake in the gas field but has not succeeded yet (Evgrashina, 2013). In the post-Soviet era, after having good relations with the US and EU members and many negotiations and lobbying by the US government for several years, Azerbaijan succeeded in building its oil export pipeline through Georgia to Turkey, bypassing Russian pipeline export routes. In addition, the European Union initiated a lobbying effort to transport Caspian gas via Turkey pipeline system (discussed above) to Central Europe. These pipeline projects have given Turkey an opportunity to make a geopolitical leveraged position between East and West swaths (Heinrich & Pleines, 2015, p. 109). It is noteworthy that Azerbaijan’s leadership has been ideologically apprehensive about Western-oriented approaches against non-Western states and human rights violations in Azerbaijan. Yet, the Baku authority underscores the EU–US companies’ cooperation with the country to develop energy sector, which it sees lossmaking with Kremlin. The ongoing and recent rupture between the EU-US and Russia relations over Ukraine crisis pushed the European stakeholders lobbying for the Southern Gas Corridor (SGR)8 —linking Caspian Sea with European countries (Ismayilov et al., 2015, p. 2). Clearly, Azerbaijan has been involved with European countries in energy transport infrastructure through major gas pipelines projects bypassing Russia, including BTC, South Caucasus Pipeline (SCP),9 Trans Anatolian

8 The SGC is one of the most complex gas value chains being developed throughout South and Central Europe. It is estimated to be stretching over 3500 kms, crossing about seven countries and also involve a number of major energy companies. It involves various energy projects with total investment of approximately US$40 billion. For more details, visit the Website—Trans Adriatic Pipeline. 9 For more details, see the “South Caspian Pipeline.” Website—BP Azerbaijan. Retrieved 29.04.2018, from https://www.bp.com/en_az/caspian/operationsprojects/pip elines/SCP.html.

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Pipeline (TANAP),10 and Trans-Adriatic Pipeline (TAP).11 These developments also impacted the Moscow-led South Stream project and forced it to abandon the same. In addition, Azerbaijan’s NATO and EPCA membership vis-à-vis refusal to join Russia-led CSTO and dichotomy over Moscow’s questionable intervention in the matter of Nagorno-Karabakh disputed enclave between Baku and Yerevan, have stymied the energy relations between both. It is also noteworthy that Azerbaijan is a member of major organizations including Georgia-Ukraine-Azerbaijan-Moldova (GUAM) and the Organization for Security and Co-operation in Europe (OSCE), seen as instrumental to counterbalance any Russian unwanted intervention in its conflicting territorial areas (Kuchins et al., 2016). Nevertheless, Russia remains only a complicated partner of Azerbaijan and both are not involved in any serious conflict. Due to heavy engagement with its Western regional countries, Azerbaijan has been slightly passive towards its East and Southeast stretches. But, the possibilities are growing with the changing dynamics. Its recent inclinations towards China and India have been manifested in its involvement in India-led INSTC and China attractive investments and BRI initiatives. Chinese competitive engagement in Central Asian energy business and Silk Roads expansion has gradually drawn its attention towards Azerbaijan’s oil and gas sector. Azerbaijan allow Chinese companies to make more than $250 million investment in its two onshore oil field—Kursangi and Karabagli (K&K) and Gobustan. It also signed an agreement in 2010 to export Azeri oil to China (Babayan, 2014). Azerbaijan has also welcomed India’s ONGC Videsh Ltd. (OVL) to have 2.31% stake in Azeri-Chirag-Gunashli (ACG) oilfield through Public Sharing Agreement (PSA) in 2017. Through Indian participation in BTC pipeline, it is likely to enhance the customer periphery towards South Asia as well (Chatterjee, 2017; Business Line, 2017). Thus, for developing its energy relations away from Russian dominance over its exports, it has been diversifying its relations not only with Europe and Turkey but also gradually moving towards East and South East Asian peripheries. This is how these republics have been accommodating the geopolitical interests of major powers. Their multi-vector approach manifests their 10 For more details, see the “TANAP; A Project to Add Strength to Turkey.” Website— TANAP.COM. Retrieved 29.04.2018, from http://www.tanap.com/. 11 For more details, see “TAP at A Glance.” Website—Trans Adriatic Pipeline. Retrieved 29.04.2018, from https://www.tap-ag.com/the-pipeline.

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emerging geopolitical role in Eurasian energy affairs. Geo-economically their strategy is to balance with major power; geopolitically they have been counterbalancing the single power influence; regionally they set their behavior in a cooperation/neutral (in case of Turkmenistan) binary. In this entire conglomeration, energy remains the fundamental/ultimate concern for all their geopolitical affairs. In this background, the Caspian littoral post-Soviet countries including Uzbekistan will be diversifying their relations with the US and EU for financial assistance including their membership in institutional formworks—EAEU, CSTO, GUAM, SCO, etc. as well as their geopolitical and geo-economic partnerships with Moscow and Beijing and growing ties with India. All these vectors could play a significant role in integrating Eurasia. China has emerged with influential scale in the Eurasian energy market. Russia is still maintaining the geopolitical influence in the region through integrated energy network of the region but its geo-economic clout has been halted by China’s dramatic economic presence. The US and EU have common vision for Eurasian countries but they could not make much influence on account of their democratic and human rights values. Yet, they have been heavily influencing the energy dynamics in the region through designing alternative transit routes and hindering Russia-floated pipeline projects. India, on the other hand, has also been staggering energy diplomacy with Eurasian countries through INSTC and Chabahar projects but did not get expected success. Stobdan (2015) makes a point that performance-wise, India has played a tiny role region as compared to what China has performed. Nevertheless, Central Asian states assume India as a promising and critical partner, but have a negative perception of its performance in the region on the grounds of lack of investment experience and geographical constraints (Mirchandani, 2017). Geopolitically and strategically, however Russia along with the CARs wanted India to counterbalance China’s dominance.

Major Powers to Pivot Eurasia: Deconstructing Energy Geopolitics The growing role of energy players in the regional geopolitics should not be taken as the “game is over.” Geopolitical equations keep on changing with the change in the power status of the regional and global actors and the same holds the baton to reset the button. The geopolitical struggle between major powers for energy resources has been engendering mutual

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interdependencies between energy producers and transit countries. In turn, it made the energy geopolitics complex in the Eurasian space by giving transit counties more leverage edge. A closer look at the changing equations draw the main crux of current geopolitics that the major powers have been striving hard to re-establish relations with transit countries to access energy resources. It has signified the role of transit countries in power-play of great powers. The fear has been generated after the Ukraine crisis indicating that changes in the association of transit country with major power could change the whole game. It contemplates the need to deconstruct the undercurrents of energy geopolitics prevailing in Eurasia over the emerging phenomenon. Russia’s Pivot to Eurasia The Russian school of thought “Neo-Eurasianism” believes that the concept of “Altantism” represents Western civilizational dispositions, comprising European and American cultures. They have refuted the models of dividing world into East–West, North–South, or CenterPeriphery. For some Neo-Eurasianists, a union-based Eurasianism such as the SCO, can be utilized for Eurasian integration. It would be consisting of major powers in Asia like Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. India, Iran, and Mongolia would also be joining with the strong future potential. This Eurasian integration of Strategic Eurasian Union can be a center of global development. Some scholars anticipated that Eurasian Union should be replaced by the CIS. The same urged Kremlin to enhance connectivity and cooperation with Muslim countries such as Pakistan, Iran, and Afghanistan to expand strategic outreach of the same up to the Indian Ocean (Mostafa, 2013, pp. 162– 163). Russian Neo-Eurasianists have been supporting the policies of Vladimir Putin since he came into power. His strategic policy towards Ukraine and Georgia and other Caspian and South Caucasus Republics has been seen as a “Policy of Eurasianism in action.” It can be further substantiated by the President Putin at the Asia–Pacific Economic Cooperation (APEC) Summit (2001), “Russia always felt itself a Eurasian country.” It can be taken as official line of the Kremlin’s Eurasian Policy (Mostafa, 2013, p. 163). Thus, Putin has been trying to revive Russia to bounce back on the international front with different strategic approach which built upon the concept of its sphere of “Privileged Interests” not influence in the region.

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Russia has been playing a dominating role in the Eurasian region being a largest trading partner of post-Soviet states and occupying a key oil and gas export routes. Even after their independence, the postSoviet “Caspianistans ” have been retaining significant political, security, economic, and cultural relations with Russia (Kubicek, 2013, p. 173). Therefore, energy policies of the Eurasian producers have largely been influenced by the Russian policy overtures. It not only seeks to maintain regional stability but also to preserve its regional hegemony. Putin’s intentions to demonstrate the Kremlin as the regional hegemon by developing/strengthening regional structures including the Shanghai Cooperation Organization (SCO), Collective Security Organization, the Eurasian Economic Union (Wilson, 2017, pp. 7–8) have substantiated this argument. The endeavors have also been made to maintain geopolitical hegemony over the energy exports of the region by giving strategic edge to its oil and gas companies—Gazprom, Rosneft, and Transneft. Russia’s relations with the US, EU, and China on the one hand and its relations with the post-Soviet states pertaining to its domestic energy policy concerns on the other have been determining its current position in the Eurasian energy geopolitical space. With the assumption of power by President Putin, Russia has been experiencing a rapid rise since its decline and breakdown (1990s). The same views have been expressed by Sussex (2015), who has painted its rising power posture as “Revanchist.” It seeks to reconstruct its own regional architecture rather than integrating into the existing ones. Russia has been holding a central position in the Soviet period pipeline network and now wants the Caspian states to be dependent on the same for making the two-pronged benefits through transit fees and reselling of oil and gas to the third parties for getting price markup. The pipeline conspiracy remains the capstone of Eurasian energy geopolitics as it has world’s largest oil and gas pipeline network. Escobar (2014, p. 200) called the Eurasian region as a “Pipelineistan.” The “Energy Complex Zone” is geopolitically, economically, and strategically important for Russia in pipelineistan terms. It is evident when it succeeded to convince Kazakhstan for building the first post-Soviet oil pipeline (Caspian Pipeline Consortium) via Russian territory in 1992 (Heinrich et al., 2015, p. 109). Moreover, with the aftereffects of global financial crisis, Russia’s Gazprom changed its previous stand over European-level prices of gas exports from Kazakhstan, Uzbekistan, and Turkmenistan. Rather it offered higher price for the same to retain its sphere of influence

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in the region and reduced the possibilities of alternative exports routes like Nabucco pipeline (Yenikeyeff, 2011, p. 65). As per the World Energy Outlook, 2009, IEA projection, Russia will continue to dominate the Caspian gas market even beyond 2030. Even though the gas production of the four states (Kazakhstan, Turkmenistan, Azerbaijan, and Uzbekistan) would show the substantial increase together from 217 bcm in 2015 to 306 bcm by 2030. Russia’s gas production is projected to jump from 655 to 760 bcm in the same period (World Energy Outlook, 2009, p. 471), showing less growth in proportion to Caspian states. The enduring dominance over European energy market, Russia’s monopolistic position on the supply chain was challenged by transit country Ukraine’s drifts towards the West and changing association with the former. Ukraine has been remained crucial for Kremlin’s oil and gas exports to the EU. Against the background of external European powers’ attempts to checkmate Russia in Eurasian energy chess-game, the annexation of Crimea has given substantial impetus to Kremlin’s alternative energy plans (Delanoe, 2014, p. 370). It not only largely impacted the energy supply and consumption in the EU but also reaffirmed Russia’s assertive behavior in the region. Consequently, it clinched more predominance over Crimean transit routes to the EU and potential energy assets in the Black Sea shore (Brooks, 2017). Some Eurasian analysts (Rapoza, 2017; Stern et al., 2015) have described that Russia has to face the aftereffects of the Ukraine crisis which resulted in the EU and US-backed extra-territorial sanctions against it. It also led Russia to abandon its dream project, the South Stream Pipeline (annual capacity of 2.2 tcm) aiming at connecting gas supply with the Europe. Though, the European Commission officials endorse that the technical problems with the project were the reasons of its cancellation (Gotev, 2017). However, it has invoked Russia’s intentions to choose alternative route through the Turkish Stream, however, later on it was halted for some time given the Russo-Turkish dispute over airspace near the border of Syria and Turkey (BBC News, 2015). Pierini (2016), Wang (2016), and EADaily (2018) have demonstrated that the speedy restoration of Istanbul-Moscow relations after the clash and optimistic scenario of Turkish Stream project completion has generated dubious speculations among the EU members about losing Turkey to Russia. As a principal partner of this project, Gazprom has speeded

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up the construction phase of this project to avoid any Western sanctions. It recognizes Turkey as the largest transit country with major possible expansion options to reach European market and the Middle East stretches because European Market still constitutes more than 60% of its crude oil exports (see the Fig. 7.2). Thus, in this scenario Turkey is likely to gain the geopolitical prominence across the Eurasian energy space. Putin’s idea of establishing rapprochement between Turkey and the SCO to include Ankara as a partner can also be seen in this case. Diplomatically, Russia has not overlooked Turkey’s long-term relations with the EU and its adherence to the Western democratic values which make its geopolitical dynamicity more complex. Also the US’s lobbying for the East–West energy corridor strategy has been perceived by Russia as a move to keep away Moscow from the European energy market. Accepting this vulnerability, Russia has been removed its reluctance for embracing Chinese and Far-East energy partnerships as a sensible geopolitical move (Roseth, 2017, p. 23). Even during his meeting with the international analysts and journalists at Sochi (September 2010), Putin indicated to further concretization of its strong relations with China. He retorted that “foreign experts always been trying to frighten us with

Fig. 7.2 Russia’s oil export by region (2015) (Source Roseth [ 2017, p. 47])

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China…we are not frightened. China does not worry us……Russia and China will cooperate on many questions” (Lo & Hil, 2013). A major breakthrough in Sino-Russia energy relations can be traced back to Moscow’s deal with China’s state-owned company CNPC in 2005. The CNPC by forming joint venture, agreed to give loan of $6 billion to Russia’s state-owned oil company Rosneft for upstream project in East Siberia. In addition, Russia Transneft and CNPC agreed to build Chinese branch of East Siberia-Pacific Ocean (ESPO) oil pipeline project. It was funded by China. Thus, Russia has made series of plan to transport its energy towards Northeast Asia which makes energy as a critical component of its foreign policy (Roseth, 2017; Takeda, 2008, p. 5). In Sino-Russia geopolitical equations, Kazakhstan plays a significant role as it is a major transit country not only between both the energy aspirant powers but also provide connectivity via Uzbekistan and South Asia. It has previously been discussed that Kazakhstan’s multi-vector policy approach have been maintaining balancing relations with major powers either bilaterally, multilaterally or even through joining regional organizations (EAEU, SCO, etc.). Though, it has abridged Russian influence over Kazakh energy exports with entry of China’s huge economic weight, yet Russia will continue to have upper-edge over Kazakh’s European energy market except the case of its new potential link with BTC. Russian has also been taking Iran into account in its Eurasian policy orbit particularly through energy pipelines and India-led INSTC project. Russian President’s Iran visit to hold troika-talks with Baku and Tehran (November 2017) can be seen in this direction. This visit was followed by Russia’s Rosneft’s announcement of $30 billion in investment in the Iranian energy sector. Apart from this, they have agreed to extend support to the two Southwards pipelines—Trans Azeri Pipeline (TAP) consisting of Tehran, Baku, and Moscow; and Iran–Pakistan–India (IPI) pipelines. The support to IPI by Moscow is considered as pacifying relations between India and Pakistan in general and South-Central Asia in particular. One can see it as Putin’s energy diplomacy masterstroke drawn out of the US President Trump’s behavior towards Tehran (ZeroHedge, 2017). Trump’s withdrawal of Iran’s nuclear deal has not only scared Western investors but also pushed Iran closer to Russia. Besides, Putin assured Iran about Saudi-Russia Rapprochement as meant only to balance Middle East relations. Indirectly, it manifests Russia-constructed “Ummah Pivot” approach of (ZeroHedge, 2017) structuring Eurasian Union.

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In addition to this, Moscow’s embrace of Islamabad (Pakistan) has come in the backdrop of Trump’s shattering relations with Pakistan over Afghanistan war. Russia has been negotiating its deal with Pakistan for $2 billion North–South Pipeline since 2015. Pakistan also allowed Russia to join its CPEC project which would provide Moscow with access to Indian Ocean (Jorgic, 2018). But at the same time, it is worth to mention here that Russia has not been undermining its relations with India. Rather ties between Moscow and Islamabad have indeed been cozying up since 2011, are still embryonic and in no way as close as the deep and longstanding cooperation that India enjoys with Moscow. Russia has its own “Privileged Security Interests” in Afghanistan to bring stability in Central Asian neighbors. However, Russia has been securing its sphere of interests, on the contrary, many Western analysts see it as a “Sphere of Influence.” Russia’s interests are very clear in the region where each country have its own pattern of relationships/interactions with inner/outside powers. Nevertheless, it would be a misleading assumption that Russia’s actions are entirely driven by its national interests; rather, considering Russia’s influence is declining, this may be an intended mistake that it just manages to adjust with defining interests in the region. The inherent feelings of ultimate sphere of influence of a great power cannot be overlooked which made Western political elites apprehensive about Russian behavior. The US-EU’s Pivot to Eurasia Following the outcomes of Russia-Georgian conflicts and Ukrainian crisis, the Western world (used for the US and the EU for convenience) has been sharing the common interests of energy diversification bypassing Russia. Interestingly, Russia still accounts for 28% oil and 30% gas in the EU’s total oil and gas imports.12 EU’s total oil imports from Caspian Sea littoral states (Russia, Kazakhstan, Azerbaijan, Iran, and Turkmenistan) were stood at approx. 240 million tonnes (Mt) in 2016 which accounts for around 44% of total oil imported (546 Mt).13 This share is even more telling in some European countries like Finland, Germany, Poland, 12 See the detail of Energy Production and Imports. Available at the Website: Eurostat Statistics Explained. Retrieved 13.04.2018, from http://ec.europa.eu/eurostat/statisticsexplained/index.php/Energy_production_and_imports. 13 Data has been collected from the website of—Eurostat—Data Explorer. Retrieved 13.04.2018.

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Hungry, and Austria, etc. Some analysts (Bugajski, 2010; Hazakis & Proedrou, 2012) from the Western world have been constructing their perceptions about Russia’s imperialistic resurgence which could blackmail the EU for political reasons by its energy diplomacy. Therefore, it should indeed be replaced by finding way to the diversification of energy sources. The cancellation of Russia’s South Stream project has the reason to be concerned about Russia–Turkey rapprochement. Nevertheless, oil and gas imports from Russia are still continuing without raising any point of concern about import dependency over Moscow. It shows that Russia and Caspian Sea remain critical options for the EU’s energy dependency due to already well-established transporting infrastructure. With hindsight, bypassing Russia will give political and economic leverage to the US in dealing with more assertive and aggressive behavior ˙ seri (2009, pp. 34–35) has of Russia (Dobrev, 2015). On the flip side, I¸ reviewed the National Security Strategy (1998)14 document of the US that Washington’s interest in Caspian region is not actually driven by Caspian oil as it already, to a great extent, has political control over the Gulf oil. Even it has now become self-dependent in oil market in recent years. Indirectly, it intends to pursue its strategic interests in Caspian region to “prevent energy transport unification among the industrialzones of China, Japan, the EU, Korea and Russia in Eurasian region. It ensures the flow of regional energy resources to US-led global oil markets without any interludes.” It manifests the Western approach towards Eurasia being driven by three objectives—to reduce Russia’s influence; access to alternative energy supply routes and destinations by putting trade and transit infrastructure development in place; and transmitting democratic and human rights values in the region. These were the Western sponsored-democratic reforms which reinforced many color revolutions that took place in many parts of Eurasia such as Ukraine (Orange), Georgia (Rose), Kyrgyzstan (Tulip), etc. The replacements of regimes in these countries were the results of proWestern proxies in the region. The strategic motives were to foreclose the Sino-Russia influence in the region. Kyrgyzstan’s Tulip Revolution has been seen as significant move to hit a nerve of ruling regimes in the region. Beyond energy cooperation, other diplomatic moves include intelligence and military cooperation particularly with Uzbekistan and 14 For more details, see A National Security Strategy for a New Century (October 1998). Washington, DC: The White House.

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Kazakhstan in war-torn Afghanistan, Western education and promoting NGOs, financial aid and signing PCAs and MoUs, etc. (Olcott, 2005, p. 131; Weitz, 2006, p. 158). Nevertheless, energy remains the critical strategy of Western powers in the region as to “kill two birds with one stone.” It not only gravitates the Central Asian and Caspian countries towards energy diversification but also reduces the Russia factor, because energy is a lifeline of Russian economy. Conclusively, European strategy can be seen in three perspectives—from alternative energy perspective, Kazakhstan, Azerbaijan, and Turkmenistan; from strategic perspective, Kazakhstan, Uzbekistan, Tajikistan, and Afghanistan; from geopolitical perspective, Georgia and Turkey, will be figuring prominently in the Eurasian policy-framework of Western countries. It is noteworthy that the EU has already been importing oil and gas through three corridors including Norway, Russia, and North Africa/the Middle East. Since the last two decades, it has been establishing “fourthcorridor” (SGC) to fetch energy supply from Caspian and Central Asian region. The corridor involves TAP, Nabucco, and Interconnector Turkey– Greece–Italy gas pipelines (ITGI). The construction and implementation of the BTC oil pipeline, Baku–Tbilisi–Erzurum (BTE) gas pipeline (lobbied by the US) and Western Route Export Pipeline (WREP), also known as Baku-Supsa oil pipeline, are successful examples. Kazakhstan and Turkmenistan are also being linked with this corridor (Yenikeyeff, 2011). Since two decades, the US has been lobbying for the legal status of Caspian Sea to bring oil and gas in European markets from Kazakhstan and Turkmenistan without any dispute. Kazakhstan has already made its way to connect with Azerbaijan and Georgia through KCTS and TCOP pipelines systems. Turkmenistan has been in discussion with the EU and Azerbaijan for Nabucco gas pipeline (31 bcm capacity) connectivity. The Nabucco pipeline has been remained under controversy between the EU and the US, as it is likely to pass through the territory of Iraq and Iran. In contrast, Skalamera (2018, pp. 18–36) has different view on Nabucco pipeline failure from economic interest perspective that the stakeholders (companies) of pipeline have passive attitude towards the project. The reason behind their concern is that the project consortium cannot be sure of Azeri gas only for long term, and Turkmenistan has already been exporting much proportion of its gas to China and Iran. Thus, the EU cannot invest huge chunk of money to this medium-term project. This is the reason behind its proposed replacement with TANAP

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pipeline15 due to staggering interest of stakeholders (Turkey’s BOTAS and Azerbaijan’s SOCAR). But, it seems a halfway truth to be acceptable to the full length. It seems to be a bit contradictory from the perspectives of its longevity credentials leaving the EU in paradoxical situation. Its relative geopolitical realities thus should not be overlooked at the cost of economic externalities. For example, after pulling out of the Paris Climate Agreement in June 2017, the Countering America’s Adversaries Through Sanctions Act, 2017 (CAATSA), and withdrawal from the Iran Nuclear Deal (2015), the US has made its role in the EU political fabric cynical. The reason behind the EU’s fury was driven by its increasing trade relations with Iran after the nuclear accord. Iran is a likely partner of the EU for its wider future energy interests in the region. In 2016, the EU imported about 15 Mt oil from Iran in addition to huge investments of many European companies (energy giant TOTAL, automobile companies Renault and Peogeot) in other business sectors of Islamic Republic (Dreazen, 2018). Thus, accepting vulnerabilities from Russian energy dominance, European countries (particularly France, UK, and Germany) have perceived Iran [Middle East], a future energy partner. In this paradoxical condition, such behavior of the US would be questionable to European countries. It generates the view that the Nabucco project would be entrapped in geopolitical divergences despite the efforts being put by some countries to resolve the differences. Despite these disagreements, West’s favorite transit hub, Turkey’s cordial energy relations with the Islamic Republic have been remained a matter of importance among the proponents of EU-Iran energy relations. Since, Turkey is a part of “fourth corridor,” it possesses a significant geopolitical leverage for energy security of Russia and European countries. Bahgat (2014, pp. 129–130) has highlighted that the Europe see Iran–Turkish relations as alternative supplement of their energy supply in the upcoming future, given the undercurrents of shale-gas and oil revolution in the US, Crimea crisis and worsening security situations in Iraq and Syrian. The Joint Comprehensive Plan of Action (JCPOA) reduces the business tensions between Iran and Europe, thereby increasing possibilities of energy trade. In this geo-economic milieu, Turkey’s role would

15 TANAP is smaller (about 2000 km) and cheaper pipeline in economic perspectives and would link Azerbaijan to the Europe via Georgia and Turkey.

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be significant (Coskun & Carlson, 2010). Its location is at the intersection of Eurasian energy transit activities providing link to Caspian, Russia, Europe, the Middle East, and even India too. It is doubtless to say that energy security has become a primary concern of the EU policy vis-à-vis the US strategic interests. The question of Iran could create a conflict of interests between the both. Consequently, the EU would have to remain dependent on Moscow’s energy (Aribo˘gan et al., 2009, pp. 125–126). In the whole story of the growing challenges of Russia and China to the EU and Washington accompanied by Iran’s growing regional influence, indicate that Istanbul will gain geopolitical leverage and bargaining footings amid these transformations. Apart from above developments, the Eurasian strategist of the US, Dave Petraeus (the then Commander, US Central Command (USCENTCOM) from October 13, 2008, to June 30, 2010) had introduced the idea of developing inclusive New Silk Road (NSR) mostly around the Afghanistan, combining economics with security. The foundation of this concept was laid down by NATO-led Northern Distribution Network (NDN) (Rosenberger, 2017). The researcher would like to call it a “fifth corridor” of Western designs towards Eurasian integration (Map 7.1). Plans were made for infrastructural development in Afghanistan and “turn enemies into friends and aid into trade.” It has been designed to fill Afghanistan-gap of trade between South (Pakistan and India) and Central Asia, and further to integrate with the Europe (Lee, 2012). It has been marked by recent the ratification of US-Kazakhstani Afghan Transit Agreement which will run from Afghanistan to Kazakhstan and Uzbekistan across the Caspian Sea to Azerbaijan and then connect with the Europe via Black Sea (TOLO News, 2018). This is why southwards energy projects like TAPI and CASA-1000 have been gaining unconditional support from the US. This perception was later upheld by the US Secretary of State Hillary Clinton during her speech (July 2011) on the vision of New Silk Road in Chennai, India. But the idea could not attract serious actions on the part of the US as Rosenberger (2017) has pointed out that the US, in contrast to China, “keeps security and economics in separate silos” and sees the solutions to conflicts in military terms. As a result, the NSR tiger team of the US at CENTCOM was bogged down with military matters and failed to establish a connection between economics and security. J. Mattis, the new commander of CENTCOM had obliterated the funding

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Supply routes of northern distribution corridors (Source Lee, 2012)

for the NSR tiger team at CENTCOM by 2013. The failure of this gave China an opportunity to fill the gap by announcing its own $1.4 trillion Silk Road Economic Belt (SERB) plan in 2013, which the world knows as “OBOR.” Afghanistan’s development and security are the main concern of Chinese strategy which the US lost to Beijing. Against the US, the China has been showing a seriousness towards the project which is manifested in its fund allocation of $40 billion for SERB and $100 billion for the Asian Infrastructure Investment Bank (AIIB). With this, it is said that Western countries have been trying to control energy resources but on the other hand, they are losing their existing suppliers to huge Asian energy consumers China, Japan, and India. China’s Pivot to Eurasia The Western world has been enmeshing with its external economic and geopolitical issues along with embryonic thaw of strategic divergences. On the other hand, Russia has slightly lost the ground of faith among Eurasian countries which is unlikely to create the previous situations. Such

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circumstances helped China to set its leadership role in the region’s political and economic buildup, particularly energy sector. Since the late-90s, China has been rapidly making billions of investment in various energy projects through its state-controlled energy companies by using immense cash-power. Figure 7.3 depicts the whole story of China’s booming trade relations with regional actors. If one sees the current position of Russia in total trade with Kazakhstan, Azerbaijan, Turkmenistan, and Uzbekistan, it reflects a declining position for which China remains a critical factor. However, the EU is active in Caspian and Caucasus region where it has been sharing good relations with Kazakhstan and Azerbaijan. China remains the major trade partner of each of Central Asian Republics. India, on the other hand, is still struggling for enhancing its political and economic relations with these countries. China also remains significant and cited partner of Central Asian countries to keep alive their hope of feeding economies with infrastructure development and huge investment. Since the Xi Jinping’s regime, China has made dramatic ingress into the region to pursue its political, economic, and security interests which are particularly driven by its energy security strategy. It has not only established a great network of oil and gas pipelines but also developed a rail-road infrastructure to all the expanses of Eurasia including Iran and Azerbaijan. It is also seen in backdrop of relative energy-import risks associated with Strait of Malacca and Strait of Hormuz. During 1990s, China had not adopted any grand strategy to its westwards post-Soviet countries getting sudden independence from Soviet Russia. After independence, these countries were involved in civil– conflicts and Beijing had decided to make distance from their internal problems. It primarily focused on emanating security issues like Uyghur separatism movement in Xinjiang Uyghur Autonomous Region (XUAR), settlement of regional economic issues inherited from the Soviet Union dissolution, instability in Tajikistan and Afghanistan, and to establish a control over South China Sea (Ionela Pop, 2010). China’s initiative to establish a “Shanghai Five” security group was first political initiative in the region to bring stability. It was later renamed as the Shanghai Cooperation Organization (SCO) after the inclusion of Uzbekistan in 2001. The 2000s decade remains China’s decade in Eurasia, given its growing energy needs, which have been manifested in Beijing’s regular presence in the oil and gas sector of the region since 1997. In 1997, Chinese state-owned company CNPC, won the tender by securing 60% stake (for

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US$325 million) in the oil extracting enterprise AktobeMunaiGaz by pledging for investing US$4 billion in its development in next twenty years. It had outmaneuvered the competitive stakeholders like Amoco (the US) and Petronas Carigali (Malaysia). In the same year, the company reached the accord with Kazakhstan for gaining development rights over the Ozen oil field by receiving 55% stake in Kazakhstan’s Uzenmunaigaz. The Chinese company later increased its share AktobeMunaiGaz by 85% in 2003. These projects were joint venture between CNPC and Kazakhstan’s KazMunayGas oil company which supplies oil to China through 2900 km Atyrau-Alashankou oil pipeline (Zhiltsov & Grishicheva, 2015, p. 107; Olcott, 2011b, p. 71). The pipeline has the capacity to supply 200 thousand barrels per day which China–Kazakhstan pledged to increase by 500 thousand barrels per day by 2020. The offshoot branches of the pipelines such as Atasu-Alashankou (987 km), Kenkiyak-Atyrau (450 km), Kenkiyak-Kumkol (792 km), and Alashankou–Dushanzi Oil Pipeline (246 km) have been completed speedily by 2009 (Yenikeyeff, 2011, pp. 70–71). All these pipelines have been invaded by Chinese companies CNPC and Sinopec and their subsidiaries such as China National Oil and Gas Exploration and Development (CNODC), PetroChina, etc. There is a feeling among new energy actors that CARs dependence on China for trade in general and oil and gas supply in particular, has converted the disadvantaged position of their landlockedness into advantaged one. As noted in Fig. 7.3, Turkmenistan largely depends on China for trade which constitutes 58% of its overall bilateral trade in 2017. The bilateral trade between Russia and Turkmenistan, on the other hand, has been reduced to 3% only in 2017. Turkmenistan is also a largest supplier of natural gas to China among Caspian countries. The former Chinese president Hu Jintao signed an agreement for cooperation (April 2006) with the former Turkmenistan President Saparmurad Niyazov. Under the deal, Turkmenistan–China gas pipeline construction was agreed by both sides to maximum 55 bcm/year gas supply via Kazakhstan and Uzbekistan to China, in which Line A&B contain 15 bcm/year and Line C supplies 25 bcm/year. It is noteworthy that the gas pipeline network has been linked with Kazakhstan–China project of Bukhara–Tashkent pipeline system to enhance the gas supply to China (Cutler, 2018, pp. 46–47; Hu, 2014). Uzbekistan as a transit could have benefit from the project as it is also a balancing trade partner of both China and Russia. Moreover, to enhance its approach towards Caucasus region to reach the European

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market, China-based Asian Infrastructure Investment Bank (AIIB) has been approved huge loan worth US$600 million. The loan will be given for the gas pipeline (TANAP) construction which will connect Georgia, Turkey, and Southern Europe with Azerbaijan’s gas export terminals (Suokas, 2016). Kazakhstan and Turkmenistan’s energy trade connectivity with Azerbaijan has immense future implications for China to rerouting the Silk Road. And the SCO establishment of China has been an important tool to lobby with Caucasus countries in such cases. China’s another approach to pivot Eurasia is a silk-route connectivity in order to integrate Eurasia in single-economic belt. A Chinese scholar Jisi16 (2014, p. 130) asserted that China’s geostrategy vis-à-vis the Obama’s Asia pivot rebalancing strategy towards Asia–Pacific is complex regional quagmire and China should not limit her interest towards the East only. In 2012, he urged China not to limit itself towards “coasts and borders, or to traditional partners and competitors, but should plan a strategy to ‘look westwards’ and ‘march westwards’.” For this, it should enhance its interests and cooperation with South-Central Asia and the Middle Eastern countries. It had generated an opinion among Chinese scholarship which further upheld by the President Xi Jinping, during the grand tour of Central Asia in 2012 when he urges Eurasian countries for reviving Silk route which is known as a “SERB” (Boulègue, 2013). In line with this, the “New Eurasian Bridge” connecting East–West has already become operational. The Central Asia including Caspian-Caucasus region has become a part of China’s grand strategy of OBOR. Pakistan remains a major proxy for China to trigger all strategic and economic developments. The development of $46 billion CPEC is a lively example of this. Some scholars like Khattak (2017) and Panda (2017) have observed that China is the biggest achiever to win over the hearts of these countries vis-à-vis the US. In contrast to Washington, Beijing has been worked with bi-dimensional strategy of security and economic buildup while the former limited only to the strategic perspectives. Though, India has the option to capitalize the presence of the US in Afghanistan but emerging Sino-Pak axis with new found interests of Russia (so-called Sino-Pak-[Russia] Axis) in the 16 Jisi has postulated this idea “March Westwards” on October 17, 2012 in Global Times in Chinese language. Binhong (2014) has illustrated it in English Language in his edited Book “The World in 2020 According to China: Chinese Foreign Policy Elites Discuss Emerging Trends in International Politics.”

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region can not only pose challenges for New Delhi’s integration with Eurasia but also outfox Washington’s strategic influence. It has been manifested in their growing collateral proximity through some groupings and summits such as—SCO, the 12-Member Moscow Summit and the Quadrilateral Group (QGC). All these developments show that China emerged as powerful actor in the region without which possible solutions are unlikely to be achieved. Afghanistan is predominantly figured in China’s BRI strategy as it constitutes roundabout confluence of South-Central Asia, West and East Asia (Khan, 2015, p. 74). For securing Afghanistan as a peaceful corridor, China has been investing billions of dollars in Afghanistan along with Pakistan, significant to reach all the expanses of Eurasia (Khan, 2015). Even though, Russia sees China as a better option in the present context, but the latter would not give up any opportunities to take benefits if its interests are contradicted. It may be resulted into Sino-Russia differences on the matter of divergence and convergence between Beijing-led Silk Road and Moscow-led Eurasian Economic Union, based on different concepts. And ultimately, Energy would primarily be factoring into the structurization of such proposed newfangled geopolitical architectures in Eurasia. India’s Pivot to Eurasia: Challenges and Options In contrast to China, India has been struggling to access substantial amount of oil and gas due to physical, economic, and geopolitical constraints. In the hierarchy of major powers in terms of trade engagement, India retains a lowest slab with 1.25% in the region, while the China tops with 26.25% in the same. Its total trade with the region is less than $2 billion/annum which mostly dominated by Kazakhstan. Nevertheless, India has been considered a game changer, given its growing energy demand, geographical location, and diplomatic initiatives in Eurasian energy developments. What India led to pivot Eurasia is its concerns about shaky position in Eurasian neighboring economies at the northern doorstep, which consider their energy resources as a lifeline for their economic growth. And this lifeline is being used by China to control over Eurasia, thereby limiting options for India to make ingress in the region. A common view has been generated that India’s focus on East has neglected the Eurasian importance which delayed its entry into the region. But there is also an India’s energy geopolitics behind this reason.

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Indian energy company ONGC Videsh Limited’s presence in Vietnam’s 127 and 128 blocks has always been opposed by China, given the Beijing’s claim over entire South China Sea. Since its agreement (October 2011) with Vietnam for oil explorations in South China Sea, India has been supporting Vietnam’s claim for its South China Sea periphery according to the UN convention (1982) on the Law of Sea. It sees Vietnam as a counterweight to China’s influence. In Indian thinking as Pant (2017) has noted India has been replicating China’s strategy of increasing influence in Indian Ocean and South Asia to block India’s “North-Westwards March,” and New Delhi has been doing the same in East Asia using balancing act. He went on to say that if “Beijing is having strategic partnership with Pakistan ignoring India’s concerns, New Delhi can develop strong ties with states on Chinese periphery……” Apart from this, Indo-US rapprochement is seen as the Washington’s pivot to Asia in order to contain China in the region. Recently, Trump has buttressed Indian presence in Afghanistan to provide security and stability. It would eventually challenge Pakistan in the backyard of Chinese influence and thus give India a more stable balance of power in the region. Russia has been a major power in Eurasian region and also a timetested ally of India. Since the last couple of decades, India’s strategy has been to continue its relations with Russia for gaining geopolitical foothold in the region. In the recent years, Indian leadership has paid a number of visits and participated in important Russia-led economic programs for boosting cooperation in energy and other sectors of importance in the wake of their lukewarm relations since 2011. India has participated in St. Petersburg International Economic Forum (SPIEF) as a guest country in 2017 where Indian PM Modi presented its much appreciated program “Make in India” under the tag of Indo-Russian 70 years of relationship. Consequently, they have experienced about 22% growth in trade during last year (Frolovskiy, 2018). Such diplomatic initiatives have pushed Russia to support for India’s permanent membership in the SCO. The Ukraine crisis and Iran’s nuclear deal have seemingly opened the door for India, which brought Tehran close to New Delhi. It heightened the prospects of Indo-Russia rapprochement which was under-question due to Russia’s drift towards Pakistan since 2011. However, it remains a directional question about what could India bring out of the box already in the hands of influential powers. During the 16th NAM (Non-Aligned Movement) meeting in 2012 and the troika meeting in 2016, India,

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Iran, and Afghanistan decided to develop the Southern Silk Road which will connect Iran with South and Central Asia through ports, railways, and roads. Chabahar Port has been one of these initiatives which would establish a direct link between Afghanistan, Iran, and India (Rizvi and Behuria, 2016, pp. 357–364). India has found the deeper engagement with neighborhood which would help to strengthen its dealings with Eurasian competitors. It shows that India holds great capacity to adjust in the changing geopolitical and structural shifts amid the changes in power dynamics (Frolovskiy, 2018). Escobar (2014, p. 200) has reasoned that India would not compromise with the US’s apprehension about Tehran and Kabul in pursuance of its Eurasian strategy. It will play a critical role for India to enhance its geopolitical presence not only in Central Eurasia but also strengthen its economic relations in the greater Middle East. On the face of it, Iran and Afghanistan have been prominently figuring in India’s Eurasia pivot strategy. India also considers Pakistan as a corridor but it is not a reliable partner, given its anti-India engagements with regional competitors. India’s aspirations for gas pipeline connectivity through TAPI and IPI have always been on the tenterhook due to the Pakistan factor. A lot has been discussed about India’s energy strategy in previous chapters. In bold words, India’s strategy to pivot Eurasia has been driven by four pillars of cooperation. First is a “corridor approach” which it has been trying to procure through Pakistan–Afghanistan, Pakistan–Iran, and Iran–Afghanistan to bring stability by enhancing political and economic integrity in the region. Secondly, it is striving for establishing a “pipeline and infrastructural development” to enhance the options for Eurasian countries to diversify energy supplies. Third is “Institutional approach” which India has been using for engaging in Multilateral Eurasian organizations like SCO, Eurasian Economic Community (EAEC), Custom Union, and EEU to ensure its position in their regional matters. Under the tag of CCAP, India has proposed a Comprehensive Economic Partnership Agreement (CEPA) within the canvas of EEU over which it has been already working with Moscow and the Custom Union of Kazakhstan and Belarus. It covers major trade areas like energy, agriculture, pharmaceuticals, and textiles (Sen, 2015). Fourthly, it uses the strategy of “balancing act” while maintaining relations with all powers. In this direction, highly publicized visits in Central Asia and Azerbaijan have been made by Indian leaderships since the decade of engagement. In 2005, Indian Petroleum Minister Mani Shankar Aiyar made visits to

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Kazakhstan, Azerbaijan including Turkey. They had finalized the comprehensive program for bilateral and regional cooperation and connectivity in the energy sector which led to the first oil shipment from Caspian region to India in late 2005. After this, Indian companies have continually been engaging in oil and gas sector of the region (Ahmad, 2009, pp. 70–71). The relations with Azerbaijan have been kept constant which reflects in External Affairs Minister Sushma Swaraj’s Visit (April 2018) aiming at strengthening ties in trade and connectivity (The Indian Express, 2018). Given the unpleasant relations with Pakistan, Iran’s strategic location has maintained a pivotal position in India’s Eurasian strategy. In the timeframing of India’s engagement in Eurasia through its own versions of Eurasian strategy like CCAP, INSTC, and Chabahar Port have strengthened its trade relations with Turkey and Azerbaijan. Turkey emerged as one of the largest importers of India’s petroleum products. Having minor stake in BTC pipeline, prospects are emerging for gas pipeline execution from Central Asia via Turkey and Iran. Thus, Turkey after Iran can be considered as a strategic corridor for India in the coming future. Beyond Iran’s Chabahar development, INSTC, and IPI pipeline, India has broader interests to enhance connectivity to all the expenses of Eurasian region in which Europe and Russia including Central Asia and Caucasus region count for approximate US$170 billion trade potential for India in the near future. The major success of India has been to facilitate connectivity with Afghanistan passing off Pakistan (Bhatia, 2017). In pursuit of this, India has increased its trade engagements in Afghanistan which resulted in increases in the total import–export between them. It increased by 166% from US$173 million in 2011 to US$460 million in 2016 (Reddy, 2017). Afghanistan has been trying to pushing it further by extending rail connectivity to Central Asia via Uzbekistan, Turkmenistan, and Tajikistan (Bhatia, 2017). In turn, the link will provide connectivity to these countries with Iranian sea ports which are eventually beneficial for India’s trade relations (Chaudhury, 2018b). Besides this, India’s Afghanistan strategy can bring neighboring countries including Russia, Kazakhstan, Turkmenistan, Uzbekistan, and Iran at the common dialogue platform and increase New Delhi’s political influence in stabilizing Afghanistan and maintaining balancing act. India’s permanent membership in the SCO can be helpful in this case where its anti-terrorist branch the “Regional Anti-Terrorist Structure (RATS)” will give opportunity to work closely regional countries. All this help India to achieve geopolitical comeback in Eurasian energy landscape which it

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can procure by facilitating Eurasian energy markets. It essentially forces India to have a balance act between its Eurasian friends Iran, Russia, and Kazakhstan, competitor China, while aligning with the EU and the US. In spite of these brief achievements, India has to face many challenges in the region which require special attention. Challenges The existing Eurasian geopolitical structure has been undergoing unpredictable changes since the cartography of present Eurasian map. Despite making dramatic pathways in the Eurasian energy geopolitics, these trajectories are posing many challenges before India which are geopolitical, economic, and strategic in nature. Landlockedness and Within Eurasia Landlockedness has been a geographical salience of an energy-rich region of Eurasia. It is believed that landlocked countries have to face relatively higher transaction and transportation costs in terms of time, space, and money for cross-border and international trade for which they preferred for big investors and near abroad markets. Others see it in terms of modern era of trade and competition, where landlocked countries have managed themselves to collaborate with their big neighboring countries and use their resource wealth to capitalize their interest of contradictions. However, in both cases they cannot be considered all-weather friends, as their geography influences their policy choices. Heartland countries after gaining autonomy have started using assertive behavior over their natural resources and demonstrate their audacity of offending/ aggravating their powerful neighbors which marks a question over their multi-vectorism approach. It has been manifested in Kazakhstan government’s legislation regarding canceling and renegotiating energy contracts with foreign partners (China, the US, and others); Azerbaijan’s uncompromised position on EU-led Nabucco pipeline; and Turkmenistan’s decision to terminate the route-plan of Prikaspiysky pipeline with Russia by prioritizing Southern Gas Corridor (Stegen & Kusznir, 2015, p. 103). It led to the institutional deficit in the Eurasia as there is relatively low complementarity between SCO, CSTO, and EAEU. Moreover, their internal problems related to ethnic and religious fundamentalism such as Nagorno-Karabakh issue between Azerbaijan and Armenia; Russia and

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Georgia conflicts over South Ossetia and Abkhazia; unrest in Russianspeaking areas of Kazakhstan and Uzbekistan; growing influence of Islamic State (ISIS) and Taliban in Tajikistan and Afghanistan, and differences over Taliban issue between India, Iran, and Russia, etc. have also added more tension to Indian energy security options. For example, Azerbaijan’s unpleasant relations with Armenia, INSTC project has been facing challenges as Armenia remains a missing link in the planned project and also a threatening part of Caspian energy supply having better traditional relations between Russia and Iran. Iran and Baku on the other hand have been trying to exploit contradictions between great powers by engaging themselves with Turkey, Pakistan, India, and China (Minasyan, 2012, p. 272). Although some landlocked countries have navigational rivers to access sea ports but the case of countries in Eurasian heartland carries a sad tale. Their transitivity depends largely on the powerful transit countries and long distances which are the decider factors of connectivity between external and internal powers. To access these countries, India has to depend on transit countries such as Pakistan, Afghanistan, Iran, and Turkey which also have their own internal problems. Kurdish separatism in the Southeastern part of Turkey is a major concern in the region which has historical and ethnic roots in the Middle East region such as northwestern Iran, northern Iraq, and northern part of Syria. These separatists once closed the BTC pipeline in 2008 and could also influence INSTC transportation in the future. The issue of Baluchistan also remains internal problem between Iran and Pakistan. India-led Chabahar project and China-led CPEC project fall in the area of ethnic skirmishes which are likely to prove detrimental to India’s connectivity with Eurasian region. It shows that the execution of multiple projects by India have been limited by regional-level contradictions. Iran’s Dichotomy Over Chabahar Port Iran has become a major conduit of India’s twenty-first-century Eurasian energy diplomacy. However, given Iran’s pleasant relations with neighboring countries such as Pakistan, India, and China, it seems that the Chabahar project would be caught in geopolitical maneuverings. It has already manifested in Tehran’s frankness to other regional competitors like China and Pakistan which could make the project more competitive and turn it into a port of intrigues and conflicts. PTI (2016a) reported on May 2016 that Iranian Ambassador to Pakistan Mehdi Honerdoost declared Chabahar Port package is open for Pakistan and China. As the history

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of the competition for such projects between India and China makes explicit, New Delhi’s poor performance means that it always loses to Beijing. However, the present equations show ambivalence about whether the Chabahar Port will be a competitor to its next-door Gwadar Port regarding trade to justify the investment because the Pakistani Port has a larger cargo handling capacity than the Iranian one. Ali (2016) has pointed out that Tehran has been playing a diplomatic card on account of India’s economic weakness compelling India to make greater investment. Iranian President Mahmoud Ahmadinejad (2005–2013) had expressed his commitment to invest $4 billion in constructing refinery handling 400,000 barrels of crude oil per day at Gwadar Port during the visit of Pakistani counterpart Asif Ali Zardari (2008–2013) at Chabahar town in February 2013. Mahajan (2013) endorsed this argument that in second consecutive visit of President Zardari in March 2013, Tehran has given a blow to India by convincing Islamabad on building a 750-km Iran– Pakistan gas pipeline connecting Gwadar and Chabahar. As per the PTI (2016b) report, during the meeting between President Rouhani and the PM Nawaz Sharif on the sidelines of the 71st UNGA Session Iran had expressed its desire to join the multi-billion dollar CPEC project and getting complementarity between two ports. Against such background, Chabahar Port as a geopolitical consortium, would raise questions on its viability and possibility of connectivity between India and Eurasia. Sino-Pak-[Russia] Axis The growing Sino-Pak proximity has been posing a challenge to Indian interests in Eurasia. However, Kaura (2015) has pointed out that Pakistan holds a fundamental place in these matrices. Rather than being a facilitator, it has become part of China’s geo-economic designs such as CPEC, OBOR, and so forth. It gives a solid reason for the failure of TAPI and IPI pipelines. These geo-economic designs have also been supported by Russia, wishing to join CPEC for realist gains. Given the growing trilateral proximity between India, Iran, and Afghanistan over Chabahar Port, Beijing has started a joint venture with Islamabad for Gwadar Port development in view of India’s strategic relations with the latter, being one more part of the “String of Pearls.” Pakistan’s intentions to block India’s way to Eurasia are well-known to China. Thus, the China–Pakistan axis has been working another way round. For Iran, China has been playing its calibrated and judicious role apropos of its nuclear issue. Therefore, Iran in China’s geostrategic and energy security calculus has been playing

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a significant role in its entry into the Gulf region. Such moves, though not directly against India, have future repercussions, given its conflictual border relations with these countries. Scholars like Bedi (2003) and Small (2015) have interpreted these geopolitical moves and countermoves in ironical terms, as it has started the New Cold War in Eurasia, leading to the discriminating competition for energy and trade in Eurasia. Rizvi and Behuria (2016, p. 362) have observed that in spite of criticizing India’s role in Chabahar Port, China is likely to keep her arms open for the same. They went on to say that China could think of reviving Silk Routes involving India in its proposed commercial route for Kunming (China) to Kolkata (India) via Pakistan spanning to Eurasian region. However, instead of influencing Islamabad’s decisions over trade and commerce with New Delhi, Beijing normally preferred Pakistan’s hate for India by not asking the latter for participating in the CPEC. India has recently become a permanent member of the SCO which has been particularly dominated by China. China and Pakistan’s strategic axis is doubtful to be broken out for the given divergence of interests between Sino-India and India–Pakistan. On the other hand, the newfound triumvirate of China– Pakistan–Russia, and India’s ideological differences could further hamper the “Shanghai Spirit” of the grouping thereby diluting the influence of India in the region. The strategic shift of India towards Eurasia is often regarded as a means to counterbalance the growing influence of China in the region, particularly through its Belt and Road Initiative (BRI). While this argument possesses substantial merit, it also engenders inquiries regarding India’s overarching strategic outlook. Can India sustain the financial burden of participating in a high-cost geopolitical competition with China in a region where China possesses greater financial resources and a comparative advantage in terms of early development? In the absence of a well-defined strategy, there is a potential for the geopolitical balancing act to transition from a proactive approach to a more reactive one. India’s historical connections with Russia render it a favorable collaborator in the Eurasian pivot. Nevertheless, Russia maintains a distinct array of alliances and interests, which encompasses its diplomatic ties with China. The energy partnership between China and Russia is notably strong. India must exercise caution in order to ensure that its Eurasian strategy does not negatively impact its diplomatic relations with either nation.

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The US-Dilemma and Afghan Problem The progress on India’s connectivity with Eurasia has increasingly been dependent on the stability in Af-Pak area which has notably reshaped after the post-9/11 intervention by the US. With the implementation of CAATSA law, India’s relations with the US would have critical repercussions for New Delhi’s energy security in Eurasia given its cordial relations with Iran and Russia. These geopolitical stalemates have not only brought Iran and Russia closer to each other but also pushed them to develop relations with China and Pakistan. However, India’s Eurasian strategy involving Afghanistan’s neighbors including Russia will continue to coordinate with the US on Afghan problem. The terrorist activities of Taliban and other terror insurgencies in Afghanistan and Pakistan have been threatening many energy and developmental projects connecting South and Central Asia. India’s recent rapprochement with Iran, New Delhi has been facing challenges to initiate “dialogue on cooperation” with Kabul’s west and northern regional players for stabilizing it. Russia and China have been following different ideological perceptions over Taliban issue against Indo-US approach. To ensure its connectivity with Eurasia through Iran, stability in Afghanistan has been paramount concern for India. For it, India has been pursuing counter-terrorism partnerships within SCO and with Central Asian countries particularly Tajikistan and Uzbekistan. Trump’s declaration of maintaining troops in Afghanistan has further invigorated Taliban which again have security implications for India to secure its interests in Eurasia (Chaudhury, 2018a). Thus, such developments have put India into dilemma over sustaining relations with the US and maintaining balancing relations with regional powers of the Eurasian region which resulted into India’s slow progress in the region. In-India Problems and Weak Borders There is a lack of coordination between energy policies being controlled by different energy ministries. It leads to unavailability of trusted and reliable data related to energy demand and supply which provides the basis of successful policy formulation (Tripathi, 2013, p. 87). The study finds some discrepancies in data released by multiple official sources, such as inconsistency between oil usage and transportation activity data. In spite of adopting economic and political interaction approach towards its neighbors, India has been experiencing a gradual decline of influential and hegemonic position in this respect since the end of cold war. Nevertheless, as Rizvi and Behuria (2016, p. 362) have noted that India’s

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record in terms of delivering its promising developmental aid for building infrastructures has been remained relatively poor vis-à-vis other dynamic players like China. It has been facing delivery deficit in implementing its promising projects like INSTC and Chabahar Port which are subjected to be exploited by other players in the region. Thus, India needs to reconsider its inter-departmental coordination and public–private partnerships (PPP) for the successful implementation of these projects. It is irony that India’s neighborhood has relatively been poor, unstable, and dysfunctional in strategy designs which can easily be manipulated over India’s big brother power status in the region. It has been resulted into the failure of SAARC organization. India’s relations with Pakistan and China remain detrimental to its outreach towards Eurasia. Following their permanent membership in the SCO, views have been generated that they would carry the SAARC legacy in the SCO, which would ultimately undermine the status of India in the Eurasian region. In terms of India’s maritime security, China’s “String of Pearls” strategy to encircle New Delhi through ports developments in India’s neighboring countries like Bangladesh, Nepal, Sri Lanka, and Pakistan have been designed to weaken New Delhi’s maritime dominance over world’s largest trade routes crossing through Indian Ocean. The multi-party politics has also been creating hindrances in the way of India’s energy security policy (Diwan, 2009). However, India has been trying to strengthen its weak border by developing many strategies like Sagar Mala and Project Mausam, etc. but it lacks a domestic consensus between Indian political parties which also pose challenges before successful policy implementation. Therefore, the lack of domestic consensus over serious issues in India have been harming on its foreign policy which is not in case of other active players in the region. The Phenomenon of Oversimplifying the Concept of “Energy Security” The primary rationale behind India’s strategic shift towards Eurasia frequently hinges on the potential benefits of ensuring energy security. The Eurasian region possesses significant untapped natural resources; however, perceiving it solely as a reservoir of energy fails to acknowledge the complexities associated with its exploitation. The TurkmenistanAfghanistan-Pakistan–India (TAPI) pipeline, which is frequently regarded as a symbol of energy collaboration, encounters numerous obstacles, including geopolitical rivalries and security apprehensions in Afghanistan

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and Pakistan. Hence, it could be argued that narrowing the focus of the pivot to solely an energy pursuit may result in a strategic error. Options Despite having numerous challenges, the Eurasia region left some room for India by availing options to make ingress in the region which New Delhi needs to consider as an opportunity. The landlockedness, rather than considering as a hurdle for India it can be taken as an advantage. In a researchgate response, Emmanuel Vijayanand Murray (2018)17 said that in today’s most advanced world, landlockedness is no longer an issue. He elaborated that “The most efficient way to move is through pipelines. So even without a seaport, it is possible; can also be moved to nearest port & then be shipped by tankers.” It can convert this vulnerability into opportunity by adopting stringent corridor approach. For this, India should not be dependent on the Iran or Pakistan corridor alone but rather develop other alternative corridors like Turkey and Turkmenistan to access Eurasia. Interests of Eurasian energy horizons are complementary to India’s energy security needs. The landlocked countries have all North, West, and East expenses for energy supply but their south expenses remain a matter of debate since the last one and half decade when India turned into net gas importer in 2005 and started looking towards Eurasia for its energy needs. Eurasian countries need a big energy market like India. They assume India is a trustworthy partner in the energy sector, which New Delhi can utilize as an option to make ingress into the region. The geopolitical expansion of Eurasia’s prominent regional organization, the SCO can be seen as an ocean of opportunities for the member countries including India. For India and Pakistan, the SCO will provide an unpredictable scope for energy trade, regional security, connectivity, and economic cooperation. It is likely to conciliate the conflicts between India and Pakistan from saving the effect of the SAARC-like bloc. The organization has a long path ahead, and a significant option to garner support in Eurasia and tackle the problems peacefully. Apart from this, cooperation with major powers through various other organizations can be a good option to effect on decisions regarding regional cooperation. India has already been cooperating with China and Russia in multilateral 17 https://www.researchgate.net/post/is_Landlockedness_of_Central_Eurasia_an_adv antage_disadvantage_for_developing_countries_like_india_with_reference_to_energy_trade.

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formats like BRICS, RIC trilateral forum, and G-20. China, India, and Russia have already been cooperating in other multilateral formats such as RIC trilateral forum, BRICS, and G-20 (Volkhonsky, 2017). Recently, the 15th RIC Trilateral Academic Conference (January 2017) was held in New Delhi, in which, they have accentuated to explore the ways to bring stability and security in the region through institutional mechanisms (ICS, 2017). India is likely to initiate dialogue for Comprehensive Economic Partnership Agreement with EEU consisting of Russia, Armenia, Belarus, Kyrgyzstan, and Kazakhstan. The cooperation with active regional actors could maximize benefits for India particularly in energy sector. It would not only expand the scope of India’s trade, economic, and investment opportunities in Eurasia but also make market access easier through INSTC (Chatterjee and Singh, 2015). The study has assumed that India’s interests in Eurasian region are not to compete with China and to become a buffer between the US and Russia but to balance them. Since China already has a strong foothold in the region, India is unlikely to make footprints in Eurasia without her cooperation. What important issue that other actors are missing, is the development of the hydroelectric energy which the region has huge potential and that India could take it up as an opportunity. There remains an acute tension between upstream countries (Tajikistan and Kyrgyzstan) and downstream countries (other CARs) over the common share of water resources as upstream countries have started considering their individual interests over hydropower (Ito et al., 2016). India could play a role of negotiator between upstream and downstream countries by investing in infrastructural development of hydro-projects. India has already been negotiating US$1.17 billion CASA-1000 hydropower project for providing electricity to Afghanistan by connecting Central Asia and South Asia (Putz, 2017b). Singh (2018) has added to India’s aspirations that techno-economic potential can be achieved through cooperative and mutually beneficial relationships between both regions. India is keen to invest in establishing downstream energy facilities instead of exporting raw materials through expensive pipelines which have long-term possibilities for India to enhance regional cooperation. Indian companies have great opportunities in the development of infrastructure and construction activities. India’s efforts in this direction could bring stability and all around development in energy sector of the region. However, it should avoid digging out their internal matters but promoting business relations among them could scale up India’s regional stature.

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India has also been sharing historical and cultural relations with Eurasian countries since the Silk-Road days connect Turkey, Azerbaijan, and Central Asia with South Asia region. India always sees it as an option to promote cultural understanding between these countries through its cultural diplomacy. Its energy projects like INSTC, Ashgabat Agreement, and TAPI are having cross-national and cross-cultural saliences (Ganguli, 2017) which also consider local public as stakeholders of these projects. India understands the strong cultural bonds between Eurasian countries essential for promoting regional cooperation. It has been using it as an instrument of soft power for strengthening bilateral and multilateral ties. It has been corresponded with Eurasian countries’ pronounced interest in Indian music and classical dance, Bollywood films, literature, yoga, etc. India has been regularly arranging cultural events there and providing scholarship for study in India to the young minds of these countries in respective disciplines in eminent institutions like Ganesa Natyalaya (New Delhi), Kalakshetra (Chennai), Asavari (New Delhi), etc. After getting training from these institutions, they open their own institution in their respective homelands to teach about Indian culture which scale up India’s ties with these countries (Sajjanhar, 2016). India’s Connect Central Asia policy encompasses the wider range of areas of cooperation [including energy sector] aiming at establishing a New Silk Road by enhancing financial ties. Countries in the region have been admiring India’s efforts and their value addition policy provides India with enormous possibilities of long-term cooperation. India’s contribution towards TAPI gas pipeline and INSTC projects has been highly appreciated in Eurasia which would have economic benefits for the entire region. However, the CCAP has failed to provide Eurasia with the best alternative to China in terms of investment (Kavalski, 2018). For this, India needs to convert its delivery deficit into delivery profit which could change the negative perception among Eurasian countries about India. Lastly, the mantra of India’s energy geopolitics revolves around three words—“connectivity, connectivity, and connectivity” which can be achieved through convergence of convergences. However, India’s energy strategy and its diplomatic initiatives in Eurasian energy orbit have been entailing a “high risks and low gains” position. The need is here to have a long-term and coherent energy strategy, which India is still lacking. The Indian government has been predominantly responding to the changing geopolitical dynamics instead of enhancing its sphere of economic and

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political influence. It would be plausible to submit to the present geopolitical conditions that, Eurasia is a resemblance to a thick piece of cake that Russia has lost, China got in gift, the West has greed for, and India wants to ascertain the due share. However, this argument may be valid only to a certain extent and not acceptable for absolute.

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Index

A Asia-Pacific Economic Cooperation (APEC), 29, 30, 275

B Balance of power, 1, 115, 116, 260, 263, 291

C Caspian Sea, 10, 126, 152, 155, 223, 260, 261, 266–268, 270–272, 280–282, 284 Central Asian Republics, 114, 122, 123, 131, 133, 144, 145, 191, 203, 206, 207, 209, 214, 215, 220, 248, 251, 274, 286, 288, 301 Central Asia Policy, 134, 179, 302 Cold War, 12, 13, 76, 121, 130, 179, 257, 297, 298

E Economic cooperation, 123, 128, 161, 179–181, 183–185, 191, 196, 197, 211, 215, 300 Economic development, 15, 18, 23, 66, 117, 121, 123, 142, 167, 181, 186, 190, 194, 196, 219, 235, 265, 289 Economic growth, 14, 31, 58, 59, 61, 85, 93, 119, 120, 142, 190, 191, 220, 237, 238, 243, 254, 290 Economic relations, 144, 145, 179, 182, 211, 213, 286, 292 Energy Complex Zone, 263–266, 276 Energy consumption, 1, 14, 30, 31, 35, 57–59, 62, 63, 66, 67, 77, 86, 90, 93, 119, 164, 219, 221, 239 Energy diplomacy, 3, 7, 10–12, 14, 15, 18, 38, 40, 42, 47, 72, 78, 112, 113, 115, 116, 124, 127, 129, 136, 141–143, 145, 146, 151, 163, 165, 171, 262, 274, 279, 281, 295

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 A. Khan et al., India’s Energy Diplomacy in Eurasia, https://doi.org/10.1007/978-981-99-8281-3

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INDEX

Energy geopolitics, 2, 19, 167, 219, 258, 259, 261–264, 274–276, 290, 294, 302 Energy governance, 2, 4, 5, 16, 18, 19, 25, 28, 29, 37–40, 42, 47–49 Energy markets, 3, 4, 16, 23, 32, 36, 163, 220, 251, 253, 254, 257, 294 Energy policy, 5, 7, 25, 29, 30, 41, 42, 46, 48, 57–59, 62, 65, 68, 72, 93, 95, 97, 98, 104, 111, 124, 258, 276 Energy prices, 38, 87, 100, 112, 190, 261 Energy profile, 57, 122, 220, 224, 239, 243, 248 Energy reserves, 10, 111, 141, 223, 224, 243 Energy resources, 1, 2, 4–6, 10–12, 14, 16–19, 22, 31–33, 41, 42, 59–61, 65–67, 90, 111–113, 117–121, 125, 128, 129, 133, 155, 163, 191, 207, 220, 221, 224, 227, 233, 239, 243, 246, 253, 254, 257–259, 262, 263, 265, 266, 274, 275, 281, 285, 290 Energy security, 3, 4, 6, 7, 10, 11, 13–15, 19, 21, 22, 26, 27, 29, 30, 34, 38, 39, 41, 44–46, 57–61, 65, 66, 72, 76, 77, 80, 83–85, 91, 93, 97, 111, 117, 124, 135, 141–144, 150, 160, 163, 165, 171, 213, 219, 220, 222, 254, 255, 258, 259, 262, 264, 265, 283, 284, 286, 295, 296, 298–300 Energy trade, 16, 25, 27, 43, 46, 48, 113, 119, 120, 124, 161, 166, 169, 171, 283, 289, 300 Eurasian countries, 130, 146, 147, 154–156, 163, 165, 188, 190,

191, 197–199, 206, 208, 211, 216, 246, 254, 274, 285, 289, 292, 300, 302 Eurasian policy, 129, 275, 279, 282 Eurasian region, 13, 14, 41, 78, 114, 116–119, 121, 124, 125, 130, 133, 134, 141, 145, 146, 155, 159, 161, 163, 165, 169, 179–181, 184, 190, 196, 197, 209, 211–213, 216, 219, 220, 222, 223, 243, 251, 253–255, 258, 259, 261, 262, 265, 276, 281, 291, 293, 295, 297–299, 301 European Union, 26, 29, 38, 118, 141, 146, 196, 212, 272 Exploration and production, 68, 72, 73, 84, 94, 96, 99, 100, 113 F Foreign policy, 3, 4, 6–10, 14, 33, 41, 42, 45, 46, 77, 111–115, 117, 118, 120, 122, 141, 142, 149, 179, 180, 267, 279, 299 G Gas consumption, 17, 31, 63, 64, 66, 227, 232, 234, 240, 241, 271 Gas pipeline, 29, 30, 33, 34, 81, 83, 84, 113, 159–161, 163, 164, 255, 267–269, 272, 276, 282, 286, 288, 292, 296, 302 Geo-economics, 3, 6, 9, 10, 49, 116, 121, 123, 124, 127, 130, 132–134, 136, 144, 145, 148, 153–155, 160, 165, 179, 180, 191, 209, 212, 214, 219, 223, 255, 258, 263, 268, 271, 274, 283, 296 Geopolitical, 3–15, 18, 20–22, 25, 30, 33, 34, 40–42, 45, 47, 49,

INDEX

78, 84, 91, 113, 116–134, 136, 141–143, 145, 146, 149–151, 154, 155, 159–161, 163, 167–170, 179, 180, 191, 194, 197, 209, 212–215, 219, 223, 235, 251, 254, 255, 258–266, 268, 269, 271–274, 276, 278, 279, 282–285, 290–300, 302, 303 Global energy, 1–3, 6, 12, 20, 24–26, 28–33, 35, 38–44, 47, 49, 58, 63, 112, 118, 119, 136, 164, 220, 224, 235, 251, 253, 258, 260–262 Global energy governance, 2, 4, 5, 16, 25, 28, 37–40, 42, 47–49 Globalization, 8, 11, 16, 21, 29, 37, 119, 120, 127, 262 Great Game, 14, 118, 121, 262, 263, 265 Greenhouse gas, 35, 64, 99

I Infrastructure development, 14, 30, 129, 213, 281, 286 International Energy Agency, 2, 12, 21–25, 28, 35, 36, 38, 42–44, 48, 58, 61, 85, 87, 89, 95, 221, 222, 239 International Energy Forum (IEF), 27, 28, 38, 43 International North-South Transport Corridor, 14, 114, 126, 132, 134, 151, 159, 182, 184, 197, 216, 259 International Relation, 4–6, 8, 9, 16, 39, 45, 116, 128, 142, 220

315

L Liquefied natural gas (LNG), 33, 65, 78, 79, 81, 87, 92, 93, 112, 113, 125

M Market access, 165, 194, 213, 301

N National Oil Companies (NOCs), 21, 32, 33, 41, 47, 89, 100, 104, 129 National security, 10, 59, 125, 141

O Oil and gas, 15, 16, 20, 29, 33, 41, 47, 58, 59, 61, 63, 65, 68, 69, 72–76, 79, 80, 84, 88, 91, 92, 94, 96, 97, 101–105, 112, 116, 120–122, 129, 134, 142, 155, 161, 163–165, 187, 190, 194, 207, 223, 224, 227, 237, 240, 244, 245, 251, 255, 258–262, 265, 273, 276, 277, 280–282, 286, 288, 290, 293 Oil and gas reserves, 20, 58, 69, 75, 80, 121, 227, 240, 244, 260, 265 Oil and Natural Gas Corporation, 76, 223 Oil production, 13, 17, 31, 97, 224–227, 229, 239, 240, 242, 244, 246, 266 Organisation for Economic Cooperation and Development (OECD), 16, 22, 24, 29, 31, 222, 252 Organization of the Petroleum Exporting Countries (OPEC),

316

INDEX

12, 13, 20–22, 28, 29, 38, 43, 44, 220 P Petroleum and Natural Gas, 63, 69, 71, 74, 75, 79–81, 89, 94, 96, 245 Pipelines, 15, 30, 33, 34, 79–81, 83, 85, 92, 121, 126, 131, 141–143, 159, 164, 253, 260, 268, 269, 272, 279, 282, 288, 300, 301 Political influence, 85, 293, 303 Privatization, 93, 120 R Regional stability, 44, 213, 255, 276 Renewable resources, 60, 61, 64, 103, 224, 239 S Shanghai Cooperation Organization (SCO), 30, 47, 124, 132, 134–136, 144, 145, 148, 161, 162, 165, 166, 197, 268, 274–276, 278, 279, 286, 289–294, 297–300 Silk Road, 114, 125, 134, 150, 273, 289, 290, 292, 302

Soft power, 7, 8, 18, 119, 302 South Asian Association for Regional Cooperation (SAARC), 30, 166, 169, 299, 300 Sovereignty, 6, 9, 45, 46, 116, 163, 170, 263 Strategic partnership, 181, 194, 291 Strategic Petroleum Reserves (SPRs), 24, 83 Structural transformations, 2, 22, 30

T Trade relations, 155, 156, 167, 185, 196, 197, 214–216, 283, 286, 293 Transit countries, 6, 25, 33, 34, 117, 132, 260, 261, 263, 264, 275, 295

U UNCTAD, 75, 76, 200

W World Trade Organization (WTO), 26, 27, 39, 43 World War II, 11, 126, 259