Ashgabat, Turkmenistan To Become Key Connection For India To Caspian Sea and Transport Hub

2 Dec 2015

The White Rose Group recently came across an article by Monish Gulati, Associate Director at the Society for Policy Studies who wrote in the South Asia Monitor about how Ashgabat,  capital city of Turkmenistan is likely to become a Central Asian connection point for India to reach nations surrounding the Caspian Sea.

Apparently the Indian External Affairs Minister, Sushma Swaraj, visited Ashgabat in October en route to Moscow, her second visit in six months to the capital.  The Indian Prime Minister Modi has also visited Turkmenistan in July, demonstrating a real interest in building relationships for strategic development of connected logistics routes. Both leaders discussed the TAPI gas pipeline and the Ashgabat Agreement on trade and transit.

The Ashgabat Agreement

The Ashgabat Agreement was co-signed by five countries of Central Asia in 2011, covering international transport and routes for opening more import and export opportunities in the region.  The original five countries included: Turkmenistan, Uzbekistan, Iran, Oman and Qatar; however, Qatar has since withdrawn and now Kazakhstan too joins this year.  The Agreement sets out the framework for developing provision of shortest feasible rail freight logistics route between the Central Asian countries and ports in Iran and Oman and now possible routes into China and Russia, with Khazak involvement.

2014 saw progress of the Agreement with the signing of Memorandum of Understanding covering legal, procedural, infrastructure aspects of the trade and transit agreement. Oman has been pushing for completion of terms by the end of this year.

Rail Freight Logistics In the Ashgabat Agreement

1. ITK: Freight trains will most likely be using the Iran-Turkmenistan-Kazakhstan (ITK) railway corridor, opened in December last year, but connecting rail links running through Kazakhstan, Uzbekistan, Turkmenistan and Iran will eventually be included.  Agreement was reached several years ago on this north-south ITK line connecting Turkmenistan in the north with Uzen in Kazakhstan and with Gorgan in Iran to the south.

This line stretches 912.5 km, with the longest stretch, 700.5 km, in Turkmenistan. The ITK rail route is also significant for India, who have sponsored the North-South international transport corridor (NSITC / INSTC), hence recent visits by EAM Swaraj and PM Modi who will be interested in assessing their own development potential for import and export opportunities.

The Ashgabat Agreement and Sea Freight

1. Sea freight shipments at the coast will be made possible via the Ashgabat Agreement too. , Omani ports will include Salalah Port, Duqm Port and Sohar Port. Iran of course will be looking to maximise developments also sponsored by India at Chahbahar, as well as including Bandar Abbas and Jask in negotiations.

Maximising Turkmenistan’s Over-Land Rail Freight Capacity

1. TAT: Turkmenistan now wants to make the most of its key geographical location in the region by upgrading and expanding its rail freight capacity.  It isn’t just ITK railway route under development.  The Turkmenistan-Afghanistan-Tajikistan (TAT) freight train line forms an east-west strategic transportation logistics route in the region, linking the Caspian Sea to China and complementing the north-south corridor.

The three countries concerned are in the process of developing a 250-mile rail route which links Akina-Andkhoy in Afghanistan to Atamurat-Ymamnazar, Turkmenistan’s via Pyandzh in Tajikistan. Afghanistan and Turkmenistan have an additional transport and transit agreement in place, which extends the Turkmenistani railway network from Serkhetabad to Torghundi in Afghanistan’s Herat province.

1. European Connections: Turkmenistan is also looking at the Afghanistan-Turkmenistan-Azerbaijan-Georgia-Turkey transportation logistics route. This was formalised in Ashgabat in November 2014 when a draft agreement was signed. This rail freight route in Central Asia connects Turkmenistan and Afghanistan to the Black Sea, opening up European markets and greater cross-regional trading opportunities.
2. TRACECA: Central Asia’s prospects for increased import and export opportunities have never looked better with Turkmenistan’s progress. Their participation in the Transport Corridor Europe-Caucasus-Asia (TRACECA), an international transport programme which includes the EU and 14 Eastern European, South Caucasus and Central Asian states has huge potential for opening up markets on an unprecedented scale.

Collectively, these rail and sea freight networks have the potential to significantly reduce cargo transportation times and make Turkmenistan an important player in the region, which the White Rose Group will be including in its international freight services as a key hub.

India’s International Imports and Exports

The Indian foreign minister coincided her visit to Turkmenistan to discuss deepening transport cooperation with Turkmenistan’s Foreign Minister Rashid Meredov. Prime Minister Modi later put out a joint statement on his subsequent visit proposing that Turkmenistan becomes a member of the INSTC.   Both partners appreciate transport connectivity as a strategic priority.  The ITK rail link and India’s Chahbahar Port investment will help import and export opportunities between the two countries, but the Ashgabat Agreement allows for further development, with India’s input in the future.

Indian Strategic Transport Priorities

India are demonstrating interest in all regional transport routes beyond China’s the One Belt One Road (OBOR) or Belt and Road Initiatives (BRI), including INSTC connectivity. This is part of their on-going tensions with Pakistan who are undermining India’s logistics connections to Central Asian countries. Of course, India too wants enhanced trade routes to the EEU and the EU, cutting down transport time and costs.

Turkmenistan is an increasingly key transportation hub in the region, making it a focus for India’s ‘Connect Central Asia’ initiative.