How Can India Benefit From Becoming a Member of SCO?

The decision to include India, along with Pakistan, as permanent members of the Shanghai Cooperation Organisation (SCO) has been announced during the SCO Summit (9-10 July) at Ufa, Russia. The process for formal inclusion into SCO will take place in 2016. SCO has China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan as permanent members, while India, Pakistan, Iran, Afghanistan, and Mongolia have held ‘Observer’ status. Countries included as ‘Dialogue Partners’ are Turkey, Belarus and Sri Lanka.

Emergence of SCO as an Important International Platform

What started off as the ‘Shanghai Five’ in 1996, with China, Russia, Kyrgyzstan, Kazakhstan and Tajikistan as founding members, got transformed into SCO in 2001, with the inclusion of Uzbekistan. SCO was established to improve and strengthen cooperation on trade and culture between member states in Central Asia, strengthen regional security and stability, and create a new order based on regional cooperation and mutual support. Although SCO has not emphasised on building a bloc based on military cooperation, the future could see SCO emerge as a military counterweight to US-NATO influence. At the end of the Cold War, Russia had lost its political and military influence in areas outside its region, leaving the US as the sole superpower. However, with China emerging as a strong economic and military power in Asia, Russia saw this as an opportunity to re-establish its position in the international community by building a strong economic, and possibly a military cooperation with China as a counter-balance to the US-led NATO. Russia has been vehemently opposing increasing NATO influence in its neighbourhood and the presence of US and NATO-supported Air Defence Missiles in the neighbouring countries. With the US-led sanctions on Russia and Iran, both countries view SCO as a powerful platform that has the ability to develop trade and regional security, independent of the traditional US-Europe domination. While Russia is a founding member, Iran still holds ‘Observer’ status, as it cannot be offered permanent membership since it is under UN-led sanctions.

Growing Political and Economic Significance of SCO

The growing political and trade significance of SCO can be judged by the fact that despite being a member of NATO, Turkey is willing to hedge its bets with SCO and may join it as a permanent member in future. All six original members of SCO have common concerns on extremism, terrorism and separatism and have jointly committed themselves to supporting each other in fighting this growing threat. Increasing cooperation between member countries on intelligence sharing, counter terrorism and joint military training is contributing to regional stability and enhancing the role and influence of SCO in international affairs. Today, SCO has deepened its engagement with the UN and holds Observer status at the General Assembly, European Union, Commonwealth of Independent States, Organisation of Islamic Cooperation and ASEAN. With both India and Pakistan joining SCO in 2016, the organisation is set to emerge even stronger. This global entity has the potential to change the regional trade and economic dynamics significantly.

New Opportunity for India

India is on its way to emerging as a significant economic and military power in the next decade. In the aftermath of World War II, India positioned itself as a Non-aligned nation that preferred not to join the US-dominated NATO or the former USSR-led Warsaw Pact, and instead chose to hold an independent political stance in international affairs. India and other like-minded nations, which included former Yugoslavia, Indonesia, Egypt and Ghana, chose to create a third platform, the Non Aligned Movement (NAM). With time and changing international order in the post-Cold War period, NAM, along with the Commonwealth of Nations, has lost its political influence and relevance. With SCO now emerging as a strong body, nations like Iran, Turkey and Sri Lanka are keen to explore the benefits of joining the organisation.

An Opportunity to Resolve Border Disputes

India has had to contend with border disputes with China and Pakistan, both of which have had long standing close ties. This has had an impeding influence for India in strengthening its economic ties with countries in Central Asia. India has been seeking to enhance its energy security and increase in trade, by opening up new transit routes to Central Asian countries. While India has taken the initiative in settling the border dispute with Bangladesh, the recent decision to open transit facility for free movement goods between India, Bangladesh, Nepal and Bhutan is likely to see all stakeholder nations benefiting from the enhanced regional trade. The ongoing conflict in Afghanistan and freeze in dialogue between Pakistan and India, have come in the way of developing the South Asian cooperation that can significantly improve the economic situation in not just Pakistan and India, but in all SAARC countries.

Stalled Multilateral Projects Can Get Going

For several years now, the Iran-Pakistan-India oil pipeline has been in discussion but no progress has been made on account of security concerns. Similarly, the proposed project between Turkmenistan, Afghanistan, Pakistan and India has been stalled. With both Pakistan and India now joining SCO, it is very likely that either or both projects may finally take off. Both projects have the potential to significantly enhance the energy scenario in the region, while boosting regional cooperation and trade between stakeholder countries. With countries in SCO holding vast reserves of natural resources, the potential for India is immense. India, with its fast emerging economy and vast coastline, can open new access to sea trade for SCO countries and can play an important role in balancing the security, trade and political order that is now emerging between members of SCO on one side, and the US-led NATO/EU nations, on the other. Another important parallel development is the establishment of the BRICS Bank that will be officially named as ‘New Development Bank’ (NDB), established with an initial capital fund of $100 billion. This is an initiative of China that aims to counter the influence of US dominated IMF and World Bank. With SCO members China, Russia and now India, NDB is likely to emerge as a major financial body in future, and as membership increases, it will increasingly exert its influence on global economic policy and international trade. India will now be in a position to reclaim its international stature that it lost with NAM being rendered irrelevant.

SCO Can Tame a Belligerent Pakistan

In the new world order, the US has largely abandoned its unstinted support to Pakistan, and China has now emerged as its financial and diplomatic mentor. With US in the process of vacating Afghanistan, China, along with Russia and Pakistan, is likely to play an increasing role in Afghanistan. This could have resulted in India being left out of the emerging Central Asian politics. In 2016, as India and Pakistan formalise their permanent member status of SCO, China and Russia are likely to play an important role in influencing Pakistan to tone down its belligerent attitude towards India and work towards resolving outstanding issues. Likewise, under the new relationship as members of SCO, China, too, will have to come around and work towards settling the border dispute with India. If India succeeds in settling outstanding issues with both Pakistan and China, the potential to jumpstart economic development in the entire South Asian region is immense. With the emergence of SCO, Asia is on its way of reclaim its status as a global power centre that it once was. And India will have a major role to play. Read More India’s foreign trade – Rising beyond mere relations Military Alliance between Russia and India What Can India Learn From China? Government–Naga Peace Accord Bilateral Issues India Needs To Resolve BRICS Countries Map BRICS Bank – A Closer Look Why India wants to continue with IBSA Indo-Russian bilateral trade – The imbalances and the remedy Chinese Ads Depict Environmental Problems in India Neighbouring Countries of india India-Pakistan Relations: Is Spring Around the Corner? India Pakistan Border Dispute Pakistan: Intensifying Anti-India Agenda