Outcomes for India from the Shanghai Cooperation Organization Summit 2022

By Harshana Ghoorhoo

The Shanghai Cooperation Organization (SCO) recently concluded its 22nd summit on September 17. The two-day summit received particular attention for many reasons: it was the first meeting between Russian president Vladimir Putin and Indian prime minister Narendra Modi since the Ukraine war started, the first international engagement for Chinese president Xi Jinping since the start of the Covid-19 pandemic, and the first time President Xi and Prime Minister Modi rubbed shoulders since the Ladakh Line of Actual Control (LAC) clashes erupted in 2020.

India held four bilateral exchanges during the summit, with Russia, Uzbekistan, Iran, and Turkey. Over the years, the SCO has attracted more influential—and controversial, notably Iran—members. With India’s growing global status, Prime Minister Modi’s presence and engagements at the summit may give insight into where India is headed and what its priorities are in the region.

Highlights on the economic front
Trade cooperation was a hot topic at the summit. India pressed on the need to address the major disruptions caused to trade, supply chains, food security, and the energy sector as a result of the Ukraine crisis and Covid-19. India’s interests in having stronger supply chains coincides with the country’s ambitions to become a manufacturing hub, which, therefore, requires it to collaborate with the region’s major economies. In this vein, Prime Minister Modi pressed for transit rights at the summit in order to facilitate stronger supply chains through enhanced connectivity; previously, India has struggled to access Central Asian markets without transit rights across Pakistan’s territory.
In an acknowledgement of India’s expected 7.5 percent economic growth, Prime Minister Modi asserted that India’s focus will be to take a people-centric development model, an approach that will in turn transform the population into a competitive workforce and will also value the spread of technology. With a keenness to increase collaboration in the innovation area based on India’s own strong footing in the startup industry, he also stated that: “This experience of ours can be of use to many other SCO members as well. For this, we are going to start a special working group on Startups and Innovation.”

Prime Minister Modi’s focus on increasing India’s exposure to economic and trade opportunities will have an inevitable impact on the country’s technological advancements. India boasts over 70,000 startups today, a number on par with the United States, of which 100 are unicorns—startup companies valued at $1 billion. While China is well in lead for the highest number of startups and a reported minimum of 300 unicorns, India’s growing economic capabilities and sustained foreign investment is likely to start closing that gap over the next few years. And with the recently announced National Logistics Policy—a national initiative to reduce logistics costs, digitalize the logistics sector, and increase supply chain efficiency—India could become globally competitive on a scale comparable to China and the United States.

The long-awaited face-off
This summit was the first time that Prime Minister Modi interacted face-to-face with President Putin. During their bilateral exchange, Modi made it clear that he wishes for the war to end. He said, “today is not an era for war,” encouraging Russia to tread a path that sees an end to the war rather than prolongs it.  He affirmed the importance of “democracy, dialogue, and diplomacy” in encouraging the end of the war. While in no way an indication of diplomatic or otherwise strain between the two leaders, Prime Minister Modi did not hesitate to show India’s long-standing stance and concerns regarding the war, which President Putin acknowledged as “something you’ve told me on the phone as well.” The crisis, Prime Minister Modi believed, was also causing massive global disruptions, both in the energy and supply chains sectors, and was something that was damaging to most countries.
Both leaders discussed increased collaboration in Russian export of fertilizers, which President Putin said has increased by eight times the amount previously exported. For India and Russia, cooperation is likely to remain intact or further increase in the energy and defense sectors. Prime Minister Modi stated, “We got the opportunity to discuss furthering India-Russia cooperation in sectors such as trade, energy, defence and more.” Russia and India’s relationship remains resilient in the face of disagreement over the Ukraine conflict, and sustained cooperation between both countries will undoubtedly be advantageous for India to grow economically and technologically.

Eyes were also set on whether Prime Minister Modi and Chinese president Xi Jinping would interact during the summit, given that it was their first face-to-face engagement since the 2020 LAC clashes in Ladakh, which led to simmering border tensions between both powerful nations. Things remained civil and diplomatic between Prime Minister Modi and President Xi. The Chinese leader stated that “[China] will, together with other states, support India for its presidency [of SOC].” While both leaders stood together for photographs, they did not exchange any words or a handshake—a move that speaks volumes on India’s disapproval of certain Chinese policies and activities, in particular in the Ladakh LAC region, while still being open to dialogue.

The way forward for India
In a win for the country, India will take over the rotating presidency of the SCO and host the 2023 summit. India is carefully moving its way up the global leadership ladder strategically and diplomatically. As such, Iran’s latest ascension to SCO membership seems like a sounding alarm of a rapprochement in ties between three autocracies, raising questions about what the world’s largest democracy is doing in the midst of such an alliance. Prime Minister Modi recognizes the potential that collaboration with SCO members holds for improving India’s trade relations in the region and cementing itself as a reliable trade partner, especially since East Asia is poised to become the new center of development of world economy. Prime Minister Modi also seems to hold at heart that the best way to address tensions or disagreements with other countries is to communicate diplomatically and openly, rather than isolate oneself or other countries.
Harshana Ghoorhoo is a research assistant with the International Security Program at the Center for Strategic and International Studies in Washington, DC.
Harshana Ghoorhoo

Harshana Ghoorhoo

Former Research Assistant, International Security Program