Narendra Modi's Mongolia visit not about building trade and economic ties

New Delhi: Prime Minister Narendra Modi's visit to Mongolia was aimed more at gaining some psychological leverage over China than about building trade and economic ties, according to experts.

India's former ambassador Phunchok Stobdan told IANS that the visit was "more of a strategic step". S. Kalyanaraman, also an expert on the region, said it was about "making our presence felt in the region".

Modi left for China on May 14 and spent the next three days visiting Beijing and Shanghai. He became the first Indian prime minister to visit Mongolia on May 17. He was in South Korea on May 18 and 19.

During his Mongolia visit, he announced a $1 billion Line of Credit to Mongolia for its infrastructure projects and inked agreements in the field of culture, air services and cyber security training among others.

Stobdan said the import of uranium or copper or natural resources was not a driving factor in building ties with Mongolia.

"India can get uranium from anywhere," said Stobdan, now a senior fellow with Delhi-based think tank Institute for Defence Studies and Analyses (IDSA).

"Trade is not the issue here as the transportation cost would be too high. Everything will have to pass through China that will impose a lot of restrictions."

Total bilateral trade between India and Mongolia was $17.4 million in 2010 which rose to $35 million in 2013, according to official figures.

On the other hand, the CIA fact-sheet says Mongolia's trade with China represents more than half of its total external trade. China receives more than 90 percent of Mongolia's exports and is its largest supplier.

Stobdan argued: "Mongolia is a listening post for us. It is similar to why China keeps Pakistan close.

"China has not been able to reconcile with the fact that Mongolia is not a part of it. We could not ensure Tibet's independence but we want Mongolia's independence."

He said China's idea was to make Mongolia so dependent on it economically that "its independence becomes irrelevant".

He also points to India's shared history with Mongolia, something which is affirmed by K. Warikoo, a professor at the Centre for Inner Asian Studies at the Jawaharlal Nehru University (JNU) here.

Warikoo told IANS: "We share deep historical-cultural ties and we need to take this to the next level."

He said Modi's announcement "demonstrates the actual implementation of the new government's Act East Policy".

According to him, Mongolia had a rich treasure of ancient Indian classical Sanskrit and Buddhist manuscripts preserved in its libraries and monasteries.

"It is time for India to get these digitalised and make them available to larger scholars in India."

According to immigration authorities, there are around 200 registered Indians in Mongolia.

Warikoo said India also needs "to put its act together" to gain access to Mongolia's rich natural resources, including uranium, which are currently exploited by China.

But Kalyanaraman, also a senior fellow at IDSA, argued that China had a natural advantage in trading with Mongolia as India's reach would be very limited.

Sandwiched between Russia and China, Kalyanaraman argues, Mongolia cannot really come to Indian aid. "It is a scuttle game. It is useful to have Mongolia on our side," Kalyanaraman told IANS.

Spread over an area of 1,565,000 sq km, Mongolia is sparsely populated with only around three million people. At four people per square mile, it is the least densely populated country.

Kalyanaraman said Modi's visit was about having "some psychological leverage over China".

He added that it worked from Mongolia's point of view too as that country was looking for partners who can help it to be independent.