The South Caucasus continues to face the implications of the transformation of the world order accelerated by the war in Ukraine. The Russia – West confrontation has already impacted the regional balance of powers, emboldening Azerbaijan and making Russia cautious and dependent on Turkey. As the Kremlin seeks to balance its desire to influence the region and cooperate with Turkey, Azerbaijan has increased pressure on Armenia by launching an act of aggression in September 2022 and imposing a blockade on Artsakh. Under the current circumstances, Armenia seeks to widen its network of partners to protect its vital interests and resist Azerbaijani-Turkish joint pressure. In this frenzied quest for additional friends, many Armenians look towards India.
India is the natural choice for Armenia. The Armenian and Indian nations share a long history of friendly interactions, and during their millennia-long relations, the two countries have never acted against each other. The vibrant Armenian community in India in the seventeenth and eighteenth centuries played a significant role in fostering ties between the two people. Later, friendly relations between India and the Soviet Union contributed to the re-emergence of contacts. As the unipolar order started to fade away and the world moved towards establishing a new multi-polar system, India, with its vibrant democracy, developing economy, and young population, was set to become one of the pillars of the future multi-polar order. The Azerbaijan – Turkey – Pakistan partnership, the growing anti-Indian position of Turkey on the issue of Kashmir, and Pan-Turkic dreams nurtured by some circles in Baku and Ankara have brought the South Caucasus to the forefront of India’s focus. The recent multi-million deals between Armenia and India to supply Indian-made weaponry to Armenia are the first tangible signals of an understanding in New Delhi and Yerevan of the significance of this bilateral partnership. However, geopolitics should not be the only basis for developing relations. In the 21st century, economy plays a vital role in fostering ties between countries, and Armenia and India have plenty of opportunities to strengthen this realm of bilateral relations.
The two sectors which stand out for deepening economic cooperation are the IT industry and pharmaceuticals. Armenia has experienced a boom in IT in the last decade, registering an average of 25 percent annual growth in the sector. Meanwhile, Armenia needs a qualitative jump in developing this sector to become a real serious player on the world IT map. India is one of the world’s centers of IT, and FY2022 was a tipping point for the industry – the year in which Indian IT reached $200 billion in total revenue and 5 million in the total workforce. The Indian IT sector has the necessary experience and financial resources to support Armenian counterparts in reaching the next level of development.
In recent years, Armenian companies started to enter the pharmaceutical market by launching small and mid-scale production in Armenia. India is a renowned world center for producing vaccines and generic drugs. COVID – 19 made the Serum Institute of India famous worldwide as the world’s largest manufacturer of vaccines. The generic drug industry continues to strengthen itself as a critical pillar of India’s burgeoning economy. As the largest provider of generics in the world, the sector contributes to 40% of the United States generic demand, with Indian companies receiving 276 Abbreviated New Drug Application approvals from the United States Food and Drug Administration from a total of 635 in 2021. Moreover, the industry exports to almost every nation and has significant footprints in all the highly-regulated developed markets. The pharmaceutical industry in India, unlike the country’s chemicals, petrochemicals, oil and gas, and mining industries, is one of the most fragmented, comprising well over 10,000 companies, which increases the possibility for Armenian companies to find relevant partners and sources of funding.
The IT and pharmaceuticals are not the only sectors through which to develop Armenia – India cooperation. Education is another area where significant opportunities exist to expand cooperation. Thousands of Indian students choose Armenia as a place for higher education, but demand is much higher. If Armenian universities can provide more English programs and offer suitable accommodation, the number of Indian students will be multiplied. Armenia may also increase its imports from India, including rice and cotton.
Another area of Armenia – India cooperation is a partnership between diasporas. India has the largest diaspora in the world. According to the Ministry of External Affairs, there are 32 million non-resident Indians (NRIs) and persons of Indian origin (PIOs) residing outside India.