India’s engagement with Shanghai Co Operation Organization and its relevant strategic connotation: By Balaji Chandramohan

As India is trying to project its economic and strategic reach in the Indo Pacific region, the recently held Shanghai Co-Operation Summit has reaffirmed New Delhi’s stance in the Central Asia region and in the wider Eurasian landmass. 

India will expand its strategic outreach in the Central Asian region as a part of its extending Look West and Look North Policy. India’s growing strategic interest in Central Asia was highlighted by Prime Minister Modi on the sidelines of the summit of the Shanghai Cooperation Organization Tianjin Summit 2025.¹

It was the 25th Heads of State Council meeting of the Shanghai Cooperation Organization, which was held from August 31 to September 1, 2025, in Tianjin, China. It was the largest summit in SCO's history, and was the fifth time that China hosted the meeting.

To start with, the summit was held at a time when New Delhi’s relationship with Washington seems to be on shaky note following the difference in the trade relations. However, India has held its form together and has found a balance in addressing its trade relations with Washington and also emphasizing its importance as a key player in the Eurasian landmass as exhibited during the recently held SCO summit. ²

Earlier, China, Russia and four Central Asian countries formed the SCO in 2001 as a countermeasure to limit the influence of the West in the region. India and Pakistan joined in 2017.

SCO Group has become more relevant for Russia and China as their relations with the West have deteriorated. Experts say the group’s potential can’t be underplayed, despite the existence of more prominent regional and multi-national institutions such as forums like the BRICS (Brazil, Russia, India, China and South Africa), the G20 and G7.

The SCO groups around 40% of the world’s population and more than 20% of global GDP. Add Iran’s, and it will control around 20% of the world’s oil reserves. Iran’s inclusion as a full member will boost the SCO’s energy portfolio but it will spark anger in Western capitals. As the SCO is increasingly pitted against Western-led forums, it may get harder for India to strike a diplomatic balance between its different global partners.

Meanwhile, India’s all-weather friend Russia seems happy with India’s ambition to link South and Central Asia through Iran excluding Pakistan. India will also take Iran on board for the completion of this project and there will be more push for the linkages of the resources of Central Asia both to Moscow and New Delhi. ³

It’s understood that New Delhi is definitely slow in understanding the strategic importance of Central Asia as it’s more busy concentrating its diplomatic and military efforts on its “Act East Policy” and it understood that it will start “Looking West also”, especially with more focus on Central Asia. It’s done through the Connect Central Asia Project.

It’s here that India’s diplomatic maneuvering is required as if it can use its good influence on both Russia, Iran and the United States, it can increase its profile in Central Asia at least diplomatically through trade welcomed by Moscow, Tehran and Washington as all the three countries will benefit from that. Second, it will also urge Moscow to support India’s full-membership into SCO and exclude Pakistan despite prodding from Beijing for Islamabad’s inclusion.

On the other hand, India’s only military base outside its territory is in Central Asia’s Tajikistan namedAyni which if properly defined is in Russia’s own backyard. India is Russia’s all-weather friend and vice-versa and despite that India’s power projection is not welcomed in Moscow.

The reason is obvious as Russia is under increased pressure to check any more multiple-actors with Great Power ambitions in Central Asia where it has established its own unstated Monroe Doctrine.

Ayni Air Base in Tajikistan happens to be India’s first and only foreign military base since its Independence in 1947. Ayni lacks the classic military operational aspect as it still needs the tick-off from Russia to have India’s fighter aircraft.⁴

On the other hand, if China wants to play an increased role in Central Asia for its resources with tactic support from Pakistan, then Moscow will not hesitate to allow India’s increased military presence in Central Asia which includes having a base in Ayni by which it can share active intelligence.

Meanwhile, during the SCO summit, the Iranian president Pezeshkian proposed creation of a “Peace-Building Committee” composed of member states’ foreign ministers to address regional crises. 

Pezeshkian used his speech at the SCO Plus, an expanded format of the SCO Summit, to describe the format as a valuable opportunity for reinforcing international peace.

Attending SCO Plus, the president also underscored Iran’s unique geographical position within China’s historic Belt and Road Initiative – a massive global infrastructure and economic development project, launched by President Xi Jinping in 2013.

Pezeshkian also reiterated the Islamic Republic’s consistent readiness to resolve matters concerning its peaceful nuclear energy program through diplomacy and described the “Global Governance Initiative” that had been proposed by Xi at the SCO Summit as an important step towards bolstering international justice. Xi’s initiative lays emphasis on adherence to sovereign equality, commitment to international law, and multilateralism, besides advocating “the people-centered approach” and focusing on “taking real actions.”

They further underscored the need for permanent guarantees for nuclear safety, even in times of armed conflict, and reaffirmed the binding nature of UN Security Council Resolution 2231, which has endorsed a 2015 nuclear deal between Iran and world countries, the official wrote.

From India’s point of view, one of the carrots that are offered to India is the Northern Distribution Network (NDN),which is being used by the US to transport supplies and weapons to its forces in Afghanistan by steering clear of Pakistan. The initial plan of the NDS was to connect the Zaranj-Delaram road and Afghanistan garland highway connecting it to Iran Chahbahar port. 

If Iran gives nod to that, then India will also be on board on this project along with Moscow. Maybe however, this also ought to include Washington’s nod as it’s trying convert the existing logistics route to Afghanistan as a New Silk route.As the SCO is increasingly pitted against Western-led forums, it may get harder for India to strike a diplomatic balance between its different global partners.⁵

On the other hand, Moscow is aware of the Chinese’s manipulation of the Central Asian Republics through the Shanghai Cooperation Organisation (where India is at present an observer nation) and bilateral agreements with Central Asian republics, particularly in the energy sector.

Meanwhile, the US has watched with interest the happenings in the SCO Summit and in a way it was left over with the happenings in Tianjin. Not too long ago, China had found itself in a similar situation, fretting over the re-emergence of the Quad. The coalition, comprising the US, Japan, Australia and India, was revived in 2017 by Donald Trump to deter China's growing influence in the Indo-Pacific.On several occasions, China made its opposition known to the Quad, calling it a "closed and exclusive clique".

After the group held its first working-level meeting in 2018, Chinese Foreign Minister Wang Yi famously said that the Quad, like the sea foam in the Pacific, would soon dissipate.

"It seems there is never a shortage of headline-grabbing ideas... They are like the sea foam in the Pacific or Indian Ocean. They may get some attention, but soon will dissipate," Wang Yi had dismissively said of the Quad.

It’s here that India’s diplomatic maneuvering is required as if it can use its good influence on both Russia, Iran and the United States, it can increase its profile in Central Asia at least diplomatically through trade welcomed by Moscow, Tehran and Washington as all the three countries will benefit from that. Second, it will also urge Moscow to support India’s full-

membership into Shanghai Cooperation Organization and exclude Pakistan’s one despite prodding from Beijing for Islamabad’s inclusion. ⁶

Experts say the SCO  potential can’t be underplayed, despite the existence of more prominent regional and multi-national institutions such as forums like the BRICS (Brazil, Russia, India, China and South Africa), the G20 and G7.

The SCO groups around 40% of the world’s population and more than 20% of global GDP. Add Iran’s, and it will control around 20% of the world’s oil reserves. Iran’s inclusion as a full member will boost the SCO’s energy portfolio but it will spark anger in Western capitals. As the SCO is increasingly pitted against Western-led forums, it may get harder for India to strike a diplomatic balance between its different global partners.

China, Russia and four Central Asian countries formed the SCO in 2001 as a countermeasure to limit the influence of the West in the region. India and Pakistan joined in 2017. 

SCO group has become more relevant for Russia and China as their relations with the West have deteriorated. Experts say the group's potential can't be underplayed, despite the existence of more prominent regional and multi-national institutions such as forums like the Brics (Brazil, Russia, India, China and South Africa), the G20 and G7.

The SCO groups around 40% of the world's population and more than 20% of global GDP. Add Iran's, and it will control around 20% of the world's oil reserves.

How Delhi manages its diplomacy - and its differences with Russia, China and Pakistan in particular - will have an impact on future of the SCO. ⁷

Iran’s inclusion as a full member of the SCO will strengthen the organization’s energy portfolio but is likely to provoke anger in Western capitals. As the SCO becomes more aligned against Western-led forums, India may find it increasingly challenging to strike a diplomatic balance between its various global partners.

How New Delhi manages its diplomacy—particularly its relations with Russia, China, and Pakistan—will influence the future trajectory of the SCO.

To begin with, Russia, India’s longstanding ally, seems supportive of India’s ambition to link South and Central Asia through Iran, bypassing Pakistan. India will also work with Iran to complete this project, which will foster closer economic ties between Central Asia, Moscow, and New Delhi.

The actions of a few SCO member states have forced India to reconsider its broader economic and strategic priorities, primarily because these states have worked against New Delhi’s core concerns in the region. 

The deep-seated contradictions among member states on regional security and terrorism, combined with growing Chinese influence, have compelled New Delhi to perform a strategic balancing act. India is cementing its bilateral ties with regional key economies without downgrading its engagement with the SCO. ⁸

Barring China and Pakistan, all SCO member countries, especially CARs, have sought greater cooperation on connectivity projects through bilateral and multilateral agreements. The Chabahar trilateral grouping between Uzbekistan, India and Iran, seeks to link the eastern route of INSTC with Chabahar to enhance Eurasian connectivity. The Eastern Route, also known as the 928-km Kazakhstan-Turkmenistan-Iran (KTI) line, runs east of the Caspian Sea. Once connected to Chabahar via the 628-km Chabahar-Zahedan railway line, it will boost India-Eurasia trade. During the inaugural India-Central Asia summit in 2022, the CARs endorsed and proposed the inclusion of the Chabahar port in the INSTC to facilitate increased trade.

Due to the fragile global political environment and the ongoing Russia-Ukraine conflict, China has tried to assert dominance over the SCO. It aims to transform the grouping into a China-led multilateral forum for regional geo-economics and strategic interests, particularly to help BRI gain regional prominence.

On the other hand, Belt Road Initiative is Beijing’s strategic tool to offer large funds for mega infrastructure and connectivity projects, only to gain greater control of the assets in the recipient countries if they default on loan repayment. Beijing has used the project to pursue its hegemonic interests rather than providing any gains to the CARs. However, despite China’s inroads, CARs remain one of the world’s least connected economies, giving India a chance to strengthen its presence.⁹

Historically, China has sought to leverage the SCO to strengthen its bilateral relationships, particularly economically, as demonstrated by initiatives such as the China-Kyrgyzstan-Uzbekistan Railway, the SCO Bank, and the SCO international road transportation agreement. 

This effort was limited by Russia’s traditionally cautious stance on such overtures. But notably the Russia-Ukraine conflict has seen a waning of Russian influence in Central Asia, and a tacit Russian acquiescence to more robust exchanges between China and the Central Asian states.

Over a period of time, the SCO has matured as an international organization and expanded its influence. Now the international community is showing greater interest in the SCO. It seems that within the organization there is an eagerness to expand the membership, which is increasingly seen as a counterbalance to western influence in this strategically located region. However, in today’s world of integrated security, no region can develop without taking into consideration the role of strategically placed countries of that region. This factor has become a driving force behind all regional organizations today. 

The SCO cannot be an exception to this rule. By accepting India, Iran, Pakistan and Mongolia as observers in 2005, the SCO expanded the scope of its activities and this process has to be taken to its logical end. Its current approach is to transform the region into an energy and economic powerhouse and reconfigure strategic alliances, which would be able to eradicate the unilateral approach of the post-cold war era. 

India historically has a close relationship with Shanghai Cooperation Organisation (SCO) countries which is based on mutual trust and goodwill, the main pillars of India’s multi-dimensional foreign policy. India’s strong and vibrant modern day engagement with the SCO countries facilitated India’s smooth entry into the organisation. India was granted Observer Status in SCO in 2005 which was later elevated to full membership in 2017. The more than a decade-long association with SCO underscores India’s willingness to play a proactive role in the organisation.

India has been actively participating in SCO and has been providing substantial support to various mechanisms in the forum. After its accession, India is focusing on initiating proposals for the mutual benefit of SCO Member States, Observers and Dialogue Partners. India’s extensive engagement in SCO has contributed to further enhancing the role and authority of SCO in the international arena.

India has ensured that various meetings and events of SCO are represented at appropriate level. While the SCO Council of Heads of State (CHS) meetings are attended by the Prime Minister, the SCO Council of Heads of Government (CHG) meetings are usually represented by the External Affairs Minister (EAM).  India has also participated in Ministerial meetings and other dialogue formats and has contributed positively in advancing SCO’s agenda. To augment India’s contribution to the day-to-day activities of SCO, India has deputed two officers each to the SCO Secretariat (Beijing) and SCO Regional Anti-Terrorist Structure (Tashkent).

To buttress its commitment to SCO, Indian Prime Minister Narendra Modi participated in the SCO Summits in 2018 (Qingdao), 2019 (Bishkek), 2020 (Moscow, virtual format), 2021 (Dushanbe, virtual format) and 2022 (Tashkent). During the Summit Meetings, PM Modi had put forward a number of important proposals aimed at further deepening cooperation in ensuring regional security, strengthening economic ties and promoting cultural and humanitarian cooperation. 

India, on the other hand, seeks to strengthen its presence in Central Asia by leveraging Iran’s Chabahar Port, which can serve as a strategic gateway to enhance trade relations with the region.

The Trump administration’s decision to modify or rescind India’s sanctions waiver for the port project represents a strategic move to exert “maximum pressure” on Iran. This development raises concerns regarding India’s investment in the port, the future of the International North-South Transport Corridor (INSTC), and broader geo-economic and geopolitical stability in the region.

India has invested approximately $24 million in equipment and infrastructure at the port, signaling a long-term commitment to enhancing connectivity with Central Asia and Europe. The revocation of the waiver could not only jeopardize this investment but also disrupt India’s broader geostrategic plans, particularly the INSTC, which aims to facilitate trade between India, Iran, Russia, and Europe via an alternative to traditional maritime routes.

The decision to reimpose or intensify sanctions on Iran aligns with the Trump administration’s broader policy of exerting “maximum pressure” on Tehran. This strategy, aimed at curbing Iran’s nuclear ambitions and regional influence, has significant consequences for global geopolitics. Notably, the move strengthens U.S.-Israel relations, as Israel perceives Iran as its principal adversary in the Middle East. Trump’s overtly pro-Israel stance, including statements supporting Israeli sovereignty over contested territories, further reinforces this geopolitical alignment.¹⁰

For India, this development creates a diplomatic dilemma.Meanwhile, India seeks to maintain strong strategic and economic ties with the United States. Meanwhile, India has historically maintained cooperative relations with Iran, particularly concerning energy security and regional connectivity. The increasing U.S. pressure on Iran complicates India’s ability to navigate these competing interests without jeopardizing critical aspects of its foreign policy.

On the other hand, the INSTC, envisioned as a critical trade corridor linking South Asia with Eurasia, hinges significantly on Chabahar’s operational viability. If a trade route gets blocked, India would have to search for other opportunities that would involve using Israel and the UAE as transit hubs for Europe. These alternatives might not provide the same level of strategic value as the path through Iran, especially when it comes to expenses and weight in the region.

Furthermore, Russia and China are likely to continue their economic engagements with Iran in spite of US sanctions. Russia has shown interest in strengthening its economic and security ties with Tehran. 

Similarly, China’s Belt and Road Initiative (BRI) has provided Iran with alternative economic partnerships, thereby mitigating some of the intended effects of the U.S. “maximum pressure” campaign. This further underscores the limitations of unilateral sanctions and the growing multipolarity in global economic relations.

The Indian government is currently assessing the long-term implications of these policy changes and exploring potential diplomatic engagements to secure its interests. One possible response could involve greater engagement with multilateral institutions such as the United Nations to emphasize the legality and legitimacy of India’s infrastructure investments in Iran. Additionally, India may seek to negotiate bilateral arrangements with the European Union (EU) and other strategic partners to mitigate the effects of U.S. sanctions. 

The broader question is whether India will continue to adhere to unilateral U.S. sanctions or challenge their legitimacy in favor of its sovereign economic and strategic interests. New Delhi has maintained a tight relationship with the United States in part by abiding Washington’s sanctions, but has also shown signs of independent foreign policy action regarding energy security and regional inter-connectivity.

In a nutshell, the Trump administration’s decision to revoke India’s sanctions waiver for Chabahar Port represents a significant geopolitical challenge. This move disrupts India’s investment in Iran, threatens the viability of the INSTC, and forces New Delhi to reconsider its trade and connectivity strategies. 

The port witnessed an increase of 43% in vessel traffic and a 34% rise in container traffic in 2023-2024.  It is envisaged that there will be substantial increase in maritime trade and commercial earnings once the port becomes fully functional.  

India made the agreement with the aim of boosting trade with landlocked Afghanistan and Central Asian countries. By equipping and leasing Chabahar port, India could meet several other goals, including bypassing China, competing with Pakistan’s nearby Gwadar port and influencing Afghanistan. However, challenges remain including U.S. economic sanctions and potential tensions with China and Pakistan despite their otherwise good relations with Tehran.

However, there are also logistical obstacles, such as Iran’s delay in completing two railway lines –Chabahar-Zahedan and Rasht-Astara — which are necessary for moving cargo from the port and connecting to a planned International North–South Transport Corridor (INSTC).

Another question involves China. 

It’s augmented that in 2021, China and Iran signed a 25-year, $400 billion partnership agreement. This fueled speculation that China would invest in Chabahar or in both Chabahar and Gwadar, which are only about 100 miles apart. There is room for Chinese involvement in Chabahar since India has only invested in the ShahidBeheshti wharf and Shahid Kalantari terminal there.

So far, however, Tehran has not received the support from Beijing it anticipated.

China invested only $618 million in projects in Iran from 2018 to 2022, mainly in the construction sector. Meanwhile, China invested $22.5 billion in Saudi Arabia, $13 billion in Iraq, $4.6 billion in Kuwait, $1.8 billion in Qatar, $19.3 billion in the United Arab Emirates (UAE), and $2.5 billion in Oman. Even China’s investment in tiny Bahrain was more than twice what it put into Iran.

Iran has also been irritated by Chinese diplomatic stances. In a recent meeting with Arab states, China signed off on a communique that disputed Iranian control of three small islands in the Persian Gulf that are also claimed by the UAE. Iran summoned the Chinese ambassador to Tehran to protest but China’s foreign ministry spokesman reaffirmed Beijing’s position that the UAE and Iran should resolve their differences through negotiations.10

Competition between Chabahar and Gwadar is also significant.China has committed to investing $62 billion in Gwadar port, while India will invest less than $500 million in Chabahar. In addition, the projected capacities of the two ports are significantly different. It is expected that by 2030, Gwadar will handle up to 400 million tons of cargo per year, much more than Chabahar’s projected capacity of 10 to 12 million tons.¹¹

In conclusion, much water has flown below the bridge when New Delhi was a reluctant player in the Central Asian region but with Pakistan and China’s influence waning and Russia opting for a greater role of New Delhi in the wider Eurasian region, it’s true that India will find itself in a better position to win the emerging Great Game in Central Asia and the recently held SCO summit in Tianjin is an icing on the cake. 

Notes 

1 PM Modi sends Trump a message, Pakistan a warning, China a reminder ( Economic Times, September 1, 2025) 

https://economictimes.indiatimes.com/news/economy/policy/sco-summit-pm-modi-sends-trump-a-message-pakistan-a-warning-china-a-reminder/articleshow/123630232.cms?from=mdr 

2) Antara Ghosal Singh Beyond the parade: Decoding China's message to rivals and allies alike ( India Today, September 6, 2025) 

3) As Central Asia looks for diverse partners, India should expedite engagement with the region ( First Post, June 2, 2023) 

https://www.firstpost.com/opinion/as-central-asia-looks-for-diverse-partners-india-should-

expedite-engagement-with-the-region-12682392.html

4) BalajiChandramohan, “India relies on Ayni for its Central Asian presence,” Universal New

Wires, December 13, 2012 

5) BalajiChandramohan India’s Growing Strategic Reach in Central Asia and its Impact on the Wider Asian Geopolitics ( Diplomatist, September 4, 2024)

6) SCO crucial for India to emerge as a third option in Central Asia ( Moneycontrol, July 5, 2020)  https://www.moneycontrol.com/news/politics/sco-is-crucial-for-india-to-emerge-as-a-third-option-in-central-asia-10907241.html

7) India’s SCO Presidency: Gateway to Closer Ties with Central Asia ( PolicyPolicy Perspective Foundaiton ) https://ppf.org.in/centre/centre-for-neighbourhood-studies-ppf-cns/indias-sco-presidency-gateway-to-closer-ties-with-central-asia

8) China-Central Asia summit: Pushing the region towards debt trap ( Economic Times, May 23, 2023) ttps://economictimes.indiatimes.com/news/international/world-news/china-central-asia-summit-pushing-the-region-towards-debt-trap/articleshow/100454439.cms?from=mdr

9) Deepak Kumar Key to Engaging China and Russia MP-IDSA Monograph Series No. 76  July 2022  https://www.idsa.in/system/files/monograph/Monograph%2076%20for%20website.pdf

10) Kashif Hasan Khan Chabahar in the Crossfire: How Trump 2.0’s ‘Maximum Pressure’ Squeezes India’s Strategic Ambitions ( Diplomat, February 8, 2025)  https://thediplomat.com/2025/02/chabahar-in-the-crossfire-how-trump-2-0s-maximum-pressure-squeezes-indias-strategic-ambitions/

11) Chabahar in the Crossfire: How Trump 2.0’s ‘Maximum Pressure’ Squeezes India’s Strategic Ambitions ( The Diplomat, February 7,2025) 

https://thediplomat.com/2025/02/chabahar-in-the-crossfire-how-trump-2-0s-maximum-pressure-squeezes-indias-strategic-ambitions/ 

12) PM Modi sends Trump a message, Pakistan a warning, China a reminder ( Economic Times, September 1, 2025)  https://economictimes.indiatimes.com/news/economy/policy/sco-summit-pm-modi-sends-trump-a-message-pakistan-a-warning-china-a-reminder/articleshow/123630232.cms?from=mdr

13) Antara Ghosal Singh Beyond the parade: Decoding China's message to rivals and allies alike ( India Today, September 6, 2025) 

(Mr Balaji Chandramohan is a foreign policy expert. The views express are of his own and does not reflect the views of C3S.)