How China’s growing clout in South Caucasus can be challenging for India

The first half of July this year has been eventful, with a series of developments in the South Caucasus. One news story about the maiden direct flight from Urumqi (Xinjiang) to the Armenian capital, Yerevan, by China Southern Airlines that will begin on September 3, 2024, has sprung surprise among global strategists and analysts, who believe that this new Chinese activism in the region will add a different flavour to the already volatile geopolitical situation in the South Caucasus.

The timing of this new step comes close to a joint US-Armenia military exercise (The Eagle Partner 2024) from July 15–24, 2024. China’s competitiveness with the US is well known. At the Shanghai Cooperation Organisation (SCO) Annual Summit on July 3–4 this year, Chinese President Xi Jinping’s appeal for resisting “external interference” only points to American overtures. Indeed, the world’s two most sanctioned governments (Russia and China) will not tolerate any direct or indirect American involvement in the geopolitics of the South Caucasus.

Moreover, the Chinese have several advantages over any other power, actor, or country, both inside and outside, in the South Caucasus. For example, the big power (Russia) keeps mum over any Chinese activism in the South Caucasus because of constant Chinese support for Moscow on critical global issues, especially concerning the West and the US. The partnership between Moscow and Beijing has grown exponentially in the post-Soviet era, and both neighbours are now ushering in a “new era” of partnership.

It is imperative to note that China has bilateral partnerships with almost all the countries in and around the South Caucasus. For example, it has strategic partnership agreements with Turkey, Georgia, and Azerbaijan and massive economic interests and investments in Armenia. Furthermore, a “Comprehensive Strategic Partnership” with Iran was signed between the two countries in 2021 for the next quarter century.

The tension and turbulence in the Sino-US relationship in the last few years have prompted China to become the de jure leader of the countries that have faced pressure from the US, three of which (Russia, Turkey, and Iran) have considerable stakes in the South Caucasus. At this critical juncture, China has been quick and smart enough to fish in the troubled waters of the South Caucasus with its economic prowess.

China, too, has significant trade partnerships with almost all the countries in the South Caucasus, aside from massive Chinese capital investment. China’s bilateral trade with the nations of the Caucasus is nearly an astounding $120 billion, with Iran and Turkey accounting for over $60 billion and $50 billion, respectively, and Georgia, Armenia and Azerbaijan have nearly $2 billion each.

This state of affairs in the South Caucasus could be a win-win situation for China, but it may spell doom for India. India has two primary interests in the South Caucasus region: first, to get the International North-South Trade Corridor (INSTC) into full bloom so that it could get the maximum benefits out of this signature connectivity project; and second, to stop the unholy nexus between Turkey, Pakistan, and Azerbaijan in the South Caucasus.

China does not want any Indian bids to maximise New Delhi’s connectivity interests through the INSTC, which may seriously affect Beijing’s vital regional strategic and economic interests. All these actors in the South Caucasus (except Armenia) have extended direct support to China’s BRI and have even been its largest beneficiaries in economic terms.

Armenia’s indifference towards the BRI stems from its marked absence from the Belt and Road Forum since 2017. Such an Armenian position is one of the reasons India has shown a favourable tilt towards Armenia. India’s diplomatic discussions with the top leadership of Armenia in the last four years amidst India-Armenia defence bonding and the possibility of India conferring “extended neighbourhood’ status on Armenia have sent a strong signal about a seemingly active role in the South Caucasus.

Even though India has a trade partnership with Azerbaijan, Turkey and Pakistan have been hostile to India for decades, particularly in terms of the Kashmir issue, in every regional and global forum. The bonhomie among these three countries has grown further. They met in a tripartite forum on the sidelines of this year’s SCO summit in Astana. While Pakistan is a full-fledged SCO member, Turkey and Azerbaijan are now guests.

Last month, Azeri President Ilham Aliyev, during a meeting with the Pakistani Prime Minister in Islamabad, vociferously declared Azerbaijan’s tacit support for Pakistan on the issue of Kashmir, much to India’s chagrin. Aliyev’s visit to Pakistan shows bonhomie between these two nations. The possibility of China joining this bandwagon will jeopardise India’s interests in the South Caucasus.

Further, Azerbaijan is suspicious of Armenia’s proposal to India to divert the International North-South Transport Corridor (INSTC) route through Armenia (Iran-Armenia-Georgia and beyond) on the pretext that it will be the shortest. The original route of the INSTC passes through Iran, Azerbaijan, Georgia, and beyond. Hence, Azerbaijan wants to build a corridor in Zangezur with the tacit support of Turkey so that the original route of INSTC is not diluted on the one hand and to keep a tab on Armenia on the other.

Amidst such a geopolitically sensitive scenario, Russia could be a saviour to India’s connectivity interests through the INSTC in the South Caucasus. It is to some extent evident from the Joint Statement issued after the New Delhi-Moscow Annual Summit (July 8–9, 2024) between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin. Both countries agreed to strengthen and deepen their “Special and Privileged Strategic Partnership” besides making “joint efforts to intensify the use of the INSTC route”. Russia still commands respect among the regional players in the South Caucasus and has a strong rapport with all of them. Russia can also influence China, Turkey, and Azerbaijan, an effort that will go in favour of India.

Mahesh Ranjan Debata teaches at the Center for Inner Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.