Monday 15th of April 2024

India-Uzbekistan: Strengthening Defence and Economic Relations for Mutual Growth
Ajay Mohan
Region : South Asia, India, Central Asia, Uzbekistan, Economy,
Issue : Security,
Since the establishment of the new republic in 1991, the bilateral relations between India and Uzbekistan have witnessed significant strengthening through high-level visits from both nations. In July 2015, Prime Minister Modi embarked on a bilateral visit to Uzbekistan, further reinforcing the ties between the two countries. This visit was followed by another significant trip in June 2016 when he attended the Shanghai Cooperation Organisation (SCO) summit held in Uzbekistan. As a culmination of these efforts, India officially became a member of the SCO during the Astana Summit in June 2017.
The historical and cultural affinities, along with the economic connections, have laid a robust foundation for defense cooperation and economic relations between India and Uzbekistan. Over the years, both countries have made consistent efforts to enhance their economic ties. Recognizing the immense potential for bilateral trade and investment, India and Uzbekistan have taken concrete measures to strengthen their economic cooperation.

Defense Cooperation
Over time, reciprocal visits and exchanges involving high-ranking delegations have played a pivotal role in nurturing a sense of trust and understanding between nations. In 2022, Prime Minister Modi's trip to Uzbekistan revolved around his attendance at the SCO meeting. Meanwhile, the former Uzbek President, Shavkat Mirziyoyev, visited India in both 2018 and January 2019. Despite the challenges posed by the pandemic, a virtual summit took place in December 2020, bringing together PM Modi and President Mirziyoyev. Since establishing diplomatic relations in 1992, India and Uzbekistan have solidified their cooperation through the signing of numerous agreements. Their collaborative efforts encompass a wide range of areas, including strategic technologies, military education, security sector reforms, as well as the establishment of national coordination committees. These committees are responsible for the implementation and monitoring of mutually agreed projects. Notably, the inaugural meeting of the National Coordination Committees was held on August 24, 2020, following the directives of Prime Minister Shri Narendra Modi and President Shavkat Mirziyoyev.
The strengthening of bilateral relations between India and Uzbekistan has paved the way for enhanced security cooperation, with a particular focus on counter-terrorism and cyber security. multiple meetings have taken place at various levels, and dedicated institutions have been established to facilitate training and capacity building in these areas. The 8th meeting of the joint working group on counter-terrorism was held in New Delhi in July 2019, underscoring the commitment to collaborative efforts. Defence cooperation between the two nations has also gained significance, marked by reciprocal visits of defense ministers. Most recently, India's Defence Minister, Rajnath Singh, visited Uzbekistan to attend the annual defense ministers' SCO meeting in Tashkent in 2022. This visit led to the signing of Memorandums of Understanding (MoUs) pertaining to military medicine and the institutionalization of joint military education, training, and exercises. India and Uzbekistan have jointly conducted four successful counter-terrorism military exercises named Dustlik, held in the years 2019, 2021, 2022, and 2023.
Furthermore, India's Ministry of Home Affairs and Uzbekistan's Ministry of Internal Affairs have entered into a cooperative agreement on national security issues, including combating organized crime and human trafficking. India has also established an "India Room" at the Armed Forces Academy in Tashkent. Uzbekistan is emerging as a significant production hub for military and dual-use products, particularly in areas such as aircraft maintenance, spare parts, ammunition, armored vehicle accessories, and defense textile products.
India has actively contributed to defense collaboration with Uzbekistan by offering valuable training opportunities to the armed forces of Uzbekistan through prestigious institutions such as the National Defense Academy and the Defense Services Staff College. This exchange of knowledge and expertise serves to strengthen the capabilities of Uzbekistan's military personnel.
Joint military exercises have become a regular and important aspect of defense engagement between India and Uzbekistan. These exercises serve as a platform for the armed forces of both nations to share best practices, improve interoperability, and enhance their operational effectiveness. For example, in 2022, the prestigious Grenadiers battalion from the Indian Army was selected and nominated to participate in the joint exercise. This battalion holds an esteemed position within the Indian Army and is recognized as one of the highly decorated units.
Furthermore, defense industry cooperation has emerged as a significant focus area. India and Uzbekistan have actively explored avenues for joint production, technology transfer, and procurement of defense equipment. Collaborative ventures in the defense sector aim to foster self-reliance, promote indigenous defense manufacturing, and bolster the defense industrial base in both countries. This strategic partnership in defense industry cooperation seeks to strengthen the defense capabilities of both India and Uzbekistan while fostering mutual growth and development in the sector.
Given its strategic location as a gateway to Central Asia, Uzbekistan holds great significance as a key partner for India in regional security initiatives. The two nations have forged close collaboration in counter-terrorism efforts, information sharing, and border security, acknowledging the importance of collective action in addressing security challenges.
Looking ahead, there is tremendous potential for further expanding and deepening defense ties between India and Uzbekistan. Both countries have expressed a strong commitment to enhancing their cooperation and exploring new avenues of collaboration. The continued exchange of knowledge, joint military exercises, and defense industry partnerships will serve as crucial pillars in strengthening defense relations between India and Uzbekistan.
The future trajectory of defense relations between the two countries appears promising, fueled by shared interests and a willingness to work together. By bolstering defense capabilities and fostering regional stability and security, India and Uzbekistan's partnership will have far-reaching benefits for both nations.

Economic Cooperation
India has consistently shown keen interest in establishing a strong trade relationship with Uzbekistan, recognizing the potential for mutually beneficial gains. In 2018, both countries decided to initiate work on a preferential trade agreement (PTA) and intensify efforts to increase bilateral trade to $1 billion within the next two years. This collaborative approach aims to promote investment flows and foster joint business activities.
Uzbekistan boasts significant reserves of various valuable resources, including coal, plutonium, gold, and uranium. As one of the world's largest exporters of uranium, Uzbekistan can play a pivotal role in India's strategic objective of acquiring nuclear fuel and establishing a strategic uranium reserve. Moreover, Uzbekistan's cotton industry and its abundant natural resources, such as gold and natural gas, present attractive opportunities for Indian investors.
The economic policy of the Uzbekistan government prioritizes attracting private investments by enhancing the market environment, facilitating privatization, and promoting international trade liberalization. These efforts align with India's aspirations to engage in trade and investment collaborations with Uzbekistan, laying the foundation for enhanced economic cooperation and partnership between the two nations.
The primary exports from Uzbekistan to India encompass a range of products, including fruits and vegetables, utilities, fertilizers, juice products, and extracts, and lubricants. Recognizing the importance of tourism, the Uzbek government implemented an e-Visa program for Uzbek nationals on April 1, 2017, and extended the e-Visa availability to Indian tourists as well.
Investment by Indian companies in the pharmaceutical and medical care sectors has been a significant focus for Uzbekistan. The country is well-positioned to benefit from cooperation with India in these areas. Notably, India's exports to Uzbekistan include pharmaceutical goods (valued at US$ 79.4 million), mechanical machinery (US$ 64.1 million), tanning or dyeing extracts (US$ 6.6 million), and optical instruments and equipment (US$ 5.4 million).
These trade dynamics highlight the potential for increased collaboration and economic ties between India and Uzbekistan. The export-import relationship encompasses a diverse range of products, and there is room for further exploration and expansion in various sectors, presenting opportunities for mutual growth and cooperation between the two countries.
Indian organizations, such as iCreate, have actively engaged in close collaboration with Uzbek counterparts to promote the startup ecosystem in Uzbekistan. These collaborations aim to train entrepreneurs in the establishment of incubators and foster the growth of innovative ventures. Additionally, Dev IT, an Indian company, has entered into bilateral partnerships with aspiring Uzbek counterparts in field research, inventions, startups, and development, further strengthening the ties between the two countries.
GMR (Grandhi Malikaarjuna Rao), a prominent Indian conglomerate, has expressed keen interest in investing in Uzbekistan's airports, including the development of an air corridor and the Navoi cargo complex. Similarly; KDAH (Ambani Hospital) from Mumbai has shown interest in establishing a specialty hospital in Uzbekistan. Favorable conditions, such as the presence of Special Economic Zones and free pharmaceutical zones, have created opportunities for Indian firms to invest in Uzbekistan.
Despite these various initiatives, the bilateral trade between India and Uzbekistan currently stands at approximately US$ 342 million (as of 2021-22), falling short of the potential outlined in the Preferential Trade Agreement (PTA) target of $1 billion. Efforts are ongoing to bridge this gap and unlock the full potential of economic cooperation between the two nations.
The views expressed above belong to the author(s)

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