SHANGHAI COOPERATION ORGANISATION (SCO): SIGNIFICANCE, CHALLENGE, WAY FORWARD

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Context

Indian Prime Minister to visit China for the SCO summit in Tianjin from August 31 to September 1, his first trip to the country since the 2020 Galwan clash.

Shanghai Cooperation Organization (SCO)

It originated from the "Shanghai Five," which China, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan formed in 1996.

• Uzbekistan joined the group in 2001, leading to the formal declaration of the Shanghai Cooperation Organization.
• SCO currently have 10 members: India and Pakistan at the Astana Summit (2017), Iran (2023), Belarus (2024)

It operates under the "Shanghai Spirit," promoting mutual trust, benefit, equality, cultural diversity, and common development.

• The SCO Charter came into force in 2003.
• The SCO Interbank Consortium, established in 2005, finances projects in infrastructure and energy.

It is governed by the Heads of State Council, its supreme decision-making body, and includes the Regional Anti-Terrorist Structure (RATS) for security cooperation.

• In 2007, the SCO signed an agreement with the Collective Security Treaty Organization (CSTO) to expand cooperation on security, crime, and drug trafficking.

It represents the world's largest regional organization by geographic scope and population, covering about 24% of the global landmass and 42% of the world's population.

As of 2024, its combined GDP based on Purchasing power parity (PPP) forms about 36% of the world's total.

Significance of SCO for India

Counter-terrorism and Security: The SCO's focus on countering terrorism, separatism, and extremism through RATS is crucial for India, which faces cross-border terrorism.

Regional Stability: Contributes to stability in Central Asia, a region critical to India's strategic interests.  

Connectivity and Economic Opportunities: Focus on connectivity aligns with India's efforts to enhance regional trade through projects like the International North-South Transport Corridor (INSTC) and Chabahar Port.

• India leverages the SCO to expand trade and investment with resource-rich Central Asian and Iranian markets, supporting its energy security.
• India advocates for rupee-based trade settlements to reduce reliance on the US dollar.

Multilateral Diplomacy: SCO provides a valuable diplomatic platform for India to engage with major powers like China and Russia, and even Pakistan, in a multilateral stage despite ongoing bilateral tensions.

Challenges for India within SCO

India-Pakistan Rivalry: India-Pakistan rivalry, particularly concerning Kashmir and cross-border terrorism, hampers consensus within SCO meetings.

• Hostilities emerged in April 2025, resulting in missile exchanges and downed fighter jets, the SCO remained silent on this bilateral conflict.
• India refused to sign a joint statement at the SCO defense ministers' meeting in June 2025, citing concerns over its failure to condemn the April 2025 Pahalgam attack.

Belt and Road Initiative (BRI): India opposes China's BRI due to sovereignty concerns, specifically the China-Pakistan Economic Corridor (CPEC) passing through Pakistan-occupied Kashmir (PoK).

• This places India in opposition to most other SCO members who support the BRI, creating friction over regional connectivity initiatives.

India-China Tensions: Border disputes and deep-seated distrust following the 2020 Galwan clashes limit India's willingness to engage in China-influenced organizations.

• China-Pakistan axis block India's efforts to raise concerns about terrorism targeting India and influence the counter-terrorism agenda within the SCO.
• China's assistance to Pakistan during recent clashes and restrictions on critical minerals export deepen tensions.

Consensus-Based Decision-Making: Unanimity rule for decision-making slows down progress, hindering collective action on critical issues.

Limited Conflict Resolution Role: SCO's charter prevents interference in bilateral matters, limit its ability to mediate disputes between member states.   

China-Russia Dominance: China and Russia, as the SCO's largest powers, dominate discussions, overshadowing the voices of smaller members, including India.

• Strengthening of the Sino-Russian partnership and Moscow's outreach to Islamabad, concern for traditional Russia-India relation.

Geopolitical Divergence: India's growing alignment with Western partners, such as the Quad, Indo-Pacific Economic Framework for Prosperity (IPEF), and the United States, conflicts with the SCO's anti-Western leanings or China-centric initiatives.

• India distanced itself from an SCO statement condemning Israeli strikes on Iran in June 2025.

Institutional Weaknesses: SCO Secretariat and RATS lack robust enforcement mechanisms compared to other international bodies.

Way Forward for India within the SCO

Leveraging Influence: India should continue to participate and use its position, to support its agenda, including expanded connectivity, trade, digital inclusion, innovation, and green energy.

• India should continue to back its 'SECURE' vision, which stands for Security, Economic cooperation, Connectivity, Unity, Respect for sovereignty and territorial integrity, and Environmental protection.

Prioritizing Practical Cooperation: Focus on practical, collective-value areas such as counterterrorism training, disaster relief, and digital infrastructure.

Advocating for Reforms: Advocate for greater transparency and inclusivity within RATS and for strengthening the SCO Secretariat's budget and analytical capabilities.

• Forming voluntary working groups on key areas like energy and AI could allow members to collaborate without consensus constraints.

Strengthening Connectivity: Promote and integrate projects like the INSTC and Chabahar Port to improve regional connectivity.

Promoting Local Currency Trade: Push for rupee-based trade settlements among SCO members to reduce dependence on the US dollar and enhance economic resilience within the bloc.

Maintaining Strategic Autonomy: Follow multi-alignment strategy, utilizing the SCO as one of several platforms (alongside BRICS, Quad, G20 and G7) to project its strategic autonomy and contribute to a balanced global order.   

Source: INDIAN EXPRESS