Country Report

on Turkmenistan
Assignment on International
Business Strategies

Submitted to
Professor Som Sekhar
Bhattacharya
Professor, NITIE, Mumbai

Rahul Ranganathan, IM-19, Roll No: 121

NATIONAL INSTITUTE OF INDUSTRIAL ENGINEERING

Table of Contents
1.

Introduction

2.

Porters national diamond

3.

4.

2.1

Factor Conditions

2.2

Demand conditions

2.3

Firm strategy, structure & rivalry

2.4

Related & supporting industries

2.5

Governments role

CAGE Framework

3.1

Cultural Distance

3.2

Administrative Distance

10

3.3

Geographical Distance

10

3.4

Economic Distance

11

Trade relationships

12

4.1

Trade relationship with India

14

4.2

Bilateral relationship with India

15

References

16

Abstract
The purpose of this document is to highlight and lay emphasis on the economy of
Turkmenistan as a country with reference to the Porters diamond model and the CAGE
framework. Firstly, the countrys economic and general state of affairs are sought to be
explained by means of the four aspects of the Porters diamond model as applied to a
nation. Thereafter, an analysis of the trade relations and cross-border flows of goods and
services in and out of Turkmenistan is undertaken to arrive at the industries prima-facie
supporting the countrys economy. Finally, the CAGE framework is deployed to assess the
distance relationships between India and Turkmenistan with a view to draw conclusions and
suggestions for a more favourable future outlook.

COUNTRY REPORT ON TURKMENISTAN

RAHUL RANGANATHAN

1. Introduction
Nestled between Iran, Kazakhstan, Uzbekistan and Afghanistan and bordering the Caspian
Sea with a coastline of around 1,800 kms, Turkmenistan is primarily is a declared
presidential republic. However, Turkmenistan is governed by authoritarian presidential rule
since its Independence on October 27, 1991 consequent to the break-up of the Soviet
Union. Its story so far has been primarily written by two men, Saparmurat Niyazov and
Gurbanguly Berdimuhammedov with both their governments fostering centralized state
control with complete authority over the parliament and judiciary. The country is divided
into 5 provinces, Ahal Welayat, Balkan Welayat, Dashoguz Welayat, Lebap Welayat and
Mary Welayat and 1 independent city of Ashgabat. The 5 regions of the territorialadministrative structure are formed based on tribal characteristics. 80% of the total area of
the country is covered by the Karakum Desert justifying the primarily arid and tropical
desert climate. [9]
The territories of Turkmenistan have been populated since ancient times by one army or
another, most notably, by Alexander the Great when he conquered the region in 4 th century
BC on his way to India. Thereafter, the Arabs conquered the region in 7 th century AD
bringing Islam with them and establishing the country along the famous Silk Road trading
route. In the 12th century, Genghiz Khan took control of the region with the following 7
centuries characterized by constant intertribal wars and a state of instability. It was only in
1894 that imperial Russia took over with Turkmenistan declared as one of the 15 republics
of the Soviet Union in 1924 post the October Revolution in 1917 [1]. After the breakup of the
Soviet Union, the country gained independence with Saparmurat Niyazov becoming the first
president of the new republic.
The Turkmenistan economy has registered consistent double digit growth over the past 3-5
years with growth buoyed primarily by strong terms of trade and sustained demand for
natural gas from China. The below table provides valuable insight into the key economic
indicators for Turkmenistan:
Indicator
GDP in current prices (TMT million)
Rates of growth of production (%)
GDP
Industry
Agriculture, fishery and forestry
Construction
Transportation and communications
Trade and catering
GDP industry structure
Industry
Agriculture, fishery and forestry
COUNTRY REPORT ON TURKMENISTAN

2007
27000

2008
49470

2009
57611

2010
59000

2011
79976

11
10.1
6.1
36.2
17.1
15.4

14.7
7.1
4
129.3
8.7
9.9

6.1
-20.8
8.5
114.4
14.7
27

9.2
8.1
7.8
15.9
12.2
11.3

14.7
24.2
0.1
12.6
8.1
9

36.7
17.8

50.5
10.8

42.7
10.5

39.7
12.8

49.3
10

RAHUL RANGANATHAN

Construction
Transportation and communications
Trade and catering
Other services
Exchange rate annualized (TMT/USD)
Revenues of state at current prices (TMT million)
Expenditures of state at current prices (TMT million)
Table 1: Key economic indicators for Turkmenistan

6.4
5.7
9.2
24.2
1.04
4,684
3,629

10.1
4.1
5.3
19.2
2.32
10080
5,375

18.2
5
6.1
17.5
2.85
11,768
10,124

16.1
5.9
7.1
18.4
2.85
10,170
8,878

13.6
4.5
5.9
16.7
2.85
15079
12,180

[6]

In terms of the main political drivers for Turkmenistans economy, centralization of

authority, geopolitical forces, and the politics of natural resources are key. This strong
growth is supported by high domestic public investment in social infrastructure and
especially strong investment in physical infrastructure, which facilitated the further
expansion of the exportable sectors, especially natural gas. However, apart from
hydrocarbon sector aided growth, other sectors of the economy have also contributed their
share with agricultural sector growing at 12% driven by good harvest of cotton. In addition,
some subsectors of the manufacturing industry, namely the production of construction
materials, fish processing, and textiles have grown by 32%, 8%, and 11% on average,
respectively [4].
In terms of exchange rate, Turkmenistan maintains a fixed rate of the Turkmen manat
against the US dollar. In this system, the official exchange rate was determined at a weekly
auction conducted by the Central Bank of Turkmenistan. The commercial banks were
allowed to sell foreign currency for a list of specified transactions only with exchange taxes
of 50% and 30% levied on cash receipts from natural gas and oil and petroleum product
exports, respectively. No forward markets for currency exchanges exist and neither do stock
markets for exchange of company shares.
The country does no publish any concrete economic information on balance of payments,
external debt, monetary statistics and any detailed government budget data. Also, there is
no data available on issues such as poverty and unemployment. Although employment is
formally guaranteed, there are few opportunities for employment outside the public sector.
As suggested before, the public expenditure by the government is high in Turkmenistan with
the state administering 17 different subsidy programs which supported by the state budget
including universal access to utilities free of charge to the public, including gas, electricity,
water, sewage and public transportation which have been guaranteed until 2030. The
budget guarantees access to health and education services free of charge (though the
quality of these need to be upgraded substantially).
A recent report by the World Bank describes the medium-term outlook for the countrys
economy to be favorable but heavily dependent on external demand for Turkmen oil
products and gas. The baseline growth projection has been revised upward at 12.2 and 10.4
percent, respectively, for 2013 and 2014 with 11% growth rate in real GDP established in
2012 [2]. With the hydrocarbon sector accounting for about half of GDP, 95% of exports, and
COUNTRY REPORT ON TURKMENISTAN

RAHUL RANGANATHAN

85% of fiscal revenues, a sharp decline in global hydrocarbon prices is the key risk to the
growth projections.

2. Porters national diamond

After a brief insight into Turkmenistans economy, this section proceeds ahead with an
analysis of Turkmenistan as a nation from the lens of the Porters national diamond
framework. The framework consists of four attributes, each of which are exemplified below:
2.1 Factor Conditions
This factor assesses a nations position in terms of factors of production along four different
fronts, human resources, physical resources, capital resources and infrastructure.
2.1.1 HUMAN RESOURCES
In terms of demography, 85% of Turkmenistans population are Turkmen with Uzbeks and
Russians constituting minorities at 5% and 4% respectively among others. Moreover, Islam is
the dominant religion in the country without doubt with 89% of the population practising
the same with the remaining 11% being Christians [2]. More than three-fourths of the
population lives in rural areas or farms which is a reflection of the skill level and the
economic development of the country [3]. Although the country provides free and
compulsory education for all, the quality of education remains dubious with President
Niyazov renowned for administering his own book Ruhnama as the principal text for all
levels of education in the past.
Also, the state of Turkmenistan, in a Soviet-reminiscent style guarantees employment for
everyone and hence, the official rate of employment is declared to be zero. Apart from
there being limited opportunities for employment outside state governed enterprises, the
viability of employment within those enterprises itself is in question with large numbers of
Turkmens leaving the country to find work in Russia and other neighbouring countries.
Another aspect of emphasis to be noted is that in spite of the overwhelming majority of
residents being Muslims, the brand of Islam followed is more moderate as compared to that
in other Central Asian countries. In a Gallup survey, some Turkmen Muslims responded that
they never perform salat, the ritual prayer that traditional Islam calls for five times daily
while only 7% actually perform it five times a day. About four in ten Turkmen Muslims (42
percent) said they fast during Ramadan, compared with majorities of Muslims in most other
Central Asian countries [3]. This purports the idea that the Turkmen society is not fertile
territory for Islamist groups is a good enough reason to believe the state is unlikely to face
any significant threat to its hold on power in the short term. It also may bode well for the
possibility of reforms over the longer term, as the dogmatic conservatism that has blocked
social change in other Islamic countries does not seem to be present in Turkmenistan.
In conclusion then, Turkmenistans human resources capability can at best be described as
under-developed.
2.1.2 PHYSICAL RESOURCES

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Turkmenistans physical resources can be categorized broadly in terms of resources for

natural gas, petroleum products and cotton and textiles among other goods. In this regard,
the country has primarily been a supplier of raw materials in line with its existing resources
Natural Gas

Turkmenistans vast resources of natural gas put it among the top-five countries in the
world in terms of gas resources. Essentially, the development of the natural gas industry in
Turkmenistan can be described in four stages:
Stage I:
This stage between 1992 and 1996 was characterized by relatively stable production and
export of natural gas to traditional partners like the USSR via a pipeline network owned by
the Soviet Union.
Stage II:
This stage was characterized by a significant decline in the exports and production of natural
gas because of insufficient demand from buyers in Russia.
Stage III:
This stage between 1998 and 2008 represents a significant shift by the Turkmen
government to diversify its exports of natural gas. The construction of the Korpeje-Kurtkui
pipeline opened up an alternate export route of natural gas to Iran.
Stage IV:
This stage is an extension of Stage III with significant diversification in natural gas exports
and substantial increase in export volumes to foreign markets, with particular focus towards
China and agreements to put in place the Turkmenistan-Afghanistan-Pakistan-India (TAPI)
pipeline to pump natural gas to India.
Petroleum and petroleum products

The Government of Turkmenistan is attracting large investments into modernizing the

national petroleum industry in order to enable the country to discover new deposits of
petroleum and expand volumes of accessible hydrocarbon fuel. State-of-the-art equipment
from United States, Germany, China and Russia have been imported, for instance, to
supplement the plants of state-run company Turkmennebit. Other efforts to increase the
volume of petroleum production include the development of the South Yoloten deposit
where, in addition to vast natural gas reserves, highly lucrative oil reserves are expected.
Petroleum is also being extracted at the Yashyldepe deposit on the right bank of the River
Amudarya.
Cotton, textiles and other goods

While contributing in small amounts to the total exports of Turkmenistan, the development
of domestic production of interim finished goods, primarily cloth, has given a boost to these
industries.
Other products exported include technical iodine, sodium sulphate, technical carbon, raw
(grege) silk, washed (scoured) wool, and carpets and carpet goods.
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2.1.3 CAPITAL RESOURCES

In terms of availability of capital, government control is strong and most banks remain
focused on financing specific sectors of the economy, or particular public enterprises. Of the
12 commercial banks in Turkmenistan, five are state-owned and account for 80% of total
assets and deposits in the banking system. Capital markets do not exist and there is no stock
exchange. Total bank deposits are still less than 6% of GDP. Over 95% of credits (mainly
short-term and low-interest) are to state enterprises. In June 2000, Turkmen citizens were
banned from holding foreign bank accounts and ordered to repatriate funds within three
months. Continued government interference, lack of political will for reform, a weak
institutional framework, and a severely underdeveloped private sector are likely to hinder
any limited progress in banking and financial-sector development for the foreseeable future.
What financial system is in place is plagued with endemic corruption.
2.1.4 INFRASTRUCTURE
In terms of urban infrastructure, Turkmenistan has 4 cities to speak of, Ashgabat, Turkmenabat,

Dashoguz and Turkmenbashi. Movement between these 4 cities or between the 5 welayats
remains highly restricted and hence, the need for development of infrastructure in terms of
transportation and highways has not been felt.
Also, in terms of industrial infrastructure development, there remain major infrastructure
and economic hurdles to ensure that energy reserves will be able to be exploited and thus
would translate into sustainable, long-term economic growth for the country.
First and foremost, the country's current production capacity is insufficient and outdated
and would never be able to support the proposed expansion of production. Without new
capital investment inflows, production would not be able to increase despite the available
reserves.
Second, and almost as importantly, the country must continue to diversify and improve its
export pipelines. The completion of the Chinese export pipeline and the expansion of the
Iranian export pipeline open further avenues for export, but Turkmen exports are still
heavily dependent on the Gazprom-owned Russian pipelines, with a limited top export
capacity. Lending agreements with the Chinese will bring in vast amounts of new capital in
return for greater promises of production and export to that country.
Although global prices for natural gas are back up from 200809 crisis lows, they remain
lower than they had been before the global recession and are vulnerable to future slides. If
prices were to drop, the forward impetus for Turkmen economic growth would be severely
compromised. For now, baseline expectations are that in the short term, the Turkmen
outlook will be constrained somewhat by limited domestic extraction and transport
capacity. In the longer term, this capacity is assumed to increase substantially, thus
providing the country with the basis for greater long-term growth.
2.2 Demand conditions
Turkmenistan operates a licensing based regime of sorts similar to that of India pre-1991.
Production orders and domestic prices are heavily centralized and controlled by the state
with high social spending as suggested by Table 1 above. Apart from free education and
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healthcare, the citizens pay nominal amounts for natural gas, electricity, water and even
food. Thus, demand conditions are at an artificial high but at a low level of sophistication
for industry and economy to prosper outside of the control of the state. Hence, instead of
analysing domestic demand, if we consider the global demand for oil and gas products, then
a completely different picture emerges. The current state of affairs, in this regard, are that
production infrastructure is outdated and limited which significantly undermines domestic
production capabilities. To enhance the existing infrastructure, influx of foreign capital is
critical. In this context, China has consistently pursued opportunities in the petroleum and
natural gas sectors of Turkmenistan. As an example, in 2007, Turkmenistan extended a
license to explore and extract natural gas in the pre-agreed territory of Bagtyyarlyk, located
on the right bank of the River Amudarya to the Chinese petroleum and natural gas deposit
operator, China National Petroleum Corporation (CNPC). The development of the deposit
and construction of natural gas pipelines was finances by loans issued to Turkmenistan by
China. Similar such efforts by Turkmen officials to draw in more capital inflows to help
improve efficiency and capacity at non-energy production as well.
Thus, domestic demand conditions can be described as unfavourable and immature for
development of the nation on the whole.
2.3 Firm strategy, structure & rivalry
In terms of industrial development, Turkmenistan has made the slowest progress in
industrial development in almost all of the countries. Only a few state-owned enterprises
have been privatized, and the government remains in firm control of production and exports
of gas, oil, and cotton, as well as some other industries. Although the government has once
again promised a privatization push, this process is extremely unlikely to dramatically alter
the economic landscape. The government continues to control prices. It also sets output
quotas for agricultural production and requires farmers to sell the state's wheat and cotton
orders at low prices. In addition, the government provides extensive subsidies, and soft
budget constraints are still in place via quasi-fiscal credits to selected sectors through the
country's Soviet-style banking system. Welfare spending is extremely high, with the state
guaranteeing free domestic supply of gas, water, and bread.
What then have been the constraining factors for development of the private sector and the
consequent firm rivalry? First of all, the government controls most of the economy and
restricts foreign participation to a few sectors in which investment partners are chosen
selectively and governed by project-specific presidential resolutions. Secondly, the lack of an
established rule of law, complex and arbitrary regulatory framework as well as incompliance
with international business practices have deterred private sector development and FDI. In
this regard, it would be worthwhile to note that Turkmenistan is ranked 168 in the
Transparency International Corruption Perceptions Index comprising 177 countries and
ranked 165 in the EIU Democracy Index 2011 comprising 167 countries. [8]
Hence, in conclusion, firm strategy, structure and rivalry is non-existent to say the least.
2.4 Related & supporting industries

Apart from oil and gas, the government has been keen to bolster the contribution from nonhydrocarbon sectors as well with the principal focus being on cotton and grain. The
COUNTRY REPORT ON TURKMENISTAN

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government is striving for self-sufficiency in grain and aiming to use cotton production to
develop a viable textile industry further up the value chain by attracting FDI. However,
transportation to key markets and government intervention still remain significant obstacles
for the development of these supporting industries to the economy. Moreover, with all
Central Asian countries in bitter disputes over sharing diminishing sources of water in the
region, attainment of self-sufficiency in food remains a distant dream for the nation.
Moreover, with insufficient and non-existent capabilities to manufacture equipments to
buttress its oil and gas industry aided growth, the economy is going to be increasingly
dependent on imports to sustain high growth levels.
Thus, on an overall level, with respect to the Porters national diamond all the four factors
show unfavourable signs for the progress of the nation of Turkmenistan. Unless the
government undertakes a significant overhaul of the entire system, the dependence on
exports of natural gas for revenues and the associated risks of a slack in the demand or gas
prices globally will continue to persist.
2.5 Governments role
As mentioned earlier, Turkmenistan is essentially an authoritarian state with high
centralized state control. The president himself controls the parliament and judiciary while
there is no freedom of the press and media with the government in full control of all
content. In September 2008, the constitution was amended with a strengthened and
enlarged mejlis or the parliament. Industry is entirely dominated by state owned enterprises
while services have been migrated to the private sector.

From an economic standpoint, the government of Turkmenistan may face the following
significant challenges which are required to be overcome for long term sustainable growth:

Dependence on the economy on hydrocarbon exports makes it vulnerable to drop in

prices as suggested before and hence diversification of development options needs
to be considered.
In order to foster the development of the private sector, apart from developing
market institutions and an effective banking sector, the government also needs to
invest in human capital.
The development of prudent governance practices is absolutely essential to attract
foreign investment and efficiently utilize Turkmenistans hydrocarbon revenues.
Amendments to public policy to curtail public spending and cost of budget subsidies
would be required as the country may run into high fiscal deficits in the medium
term.

Although the current government has hinted at adopting more favourable policies, little
change has been witnessed on the ground. The government needs to re-invent its role in
policy development and governance in order to gain from industrial growth.

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3. CAGE Framework
The CAGE framework consists of four aspects of distances on the basis of cultural,
administrative, geographical and economic factors on which to characterize the relationship
between two countries. Each of these distance aspects are as follows:
3.1 Cultural Distance
Languages

There is strong disparity in terms of languages spoken by the two countries as there is not a
single common language spoken by their respective citizens. The distribution of languages
spoken by the two countries is as shown below:
% of population speaking languages in
India

Hindi

Bengali

Telugu

Marathi

Tamil

Urdu

Gujarati

Kannada

Malayalam

Oriya

Punjabi

Assamese

Maithili

other

Figure 1: Distribution of languages

% of population speaking languages in

Turkmenistan

Turkmen

Russian

Uzbek

Other

[2]

Religion

Even in this aspect, the two countries are poles apart with the dominant religion in
Turkmenistan being a religion practiced by minorities in India. The distribution of religions
practiced in the two countries is as shown below:
% of population practising religions
in India

Hindu

Muslim

Christian

Sikh

Figure 2: Distribution of religions

COUNTRY REPORT ON TURKMENISTAN

other

unspecified

% of population practising
religions in Turkmenistan

Muslim

Eastern Orthodox

unknown

[2]

RAHUL RANGANATHAN

10

3.2 Administrative Distance

Trade bloc and regional trade agreements

Turkmenistan is not a signatory to the CIS Economic Union Agreement executed by nine CIS
countries. However, the country has in place bilateral trade agreements with Azerbaijan,
Georgia, Ukraine and Uzbekistan. Most importantly though, Turkmenistan is a current
signatory to the Commonwealth of Independent States (CIS) although it originally refrained
from doing so.
India, on the other hand, is a signatory to a number of free trade agreements like the Asia
Pacific Trade Agreements (APTA), South Asian Free Trade Agreement (SAFTA) and Global
System of Trade Preferences among Developing countries (GSTP) apart from other bilateral
trade agreements with ASEAN, Singapore, Japan, Chile and the EU.
Thus, there is no match between the two countries in this aspect.
Currency

In terms of currencies of Turkmenistan and India, the Turkmen manat is set at a fixed
exchange rate to the dollar and is set and revised by the Central Bank of Turkmenistan as
and when required. Hence, in effect, the country adopts a fixed peg arrangement. In
addition, conversion from the manat to any other currency other than the US Dollar is not
carried out by the Central Bank of Turkmenistan.
On the other hand, the Indian Rupee is managed on a regular basis by the Reserve Bank of
India upon any outlining effect from the market but the exchange rate if fundamentally
market governed in any case. Thus, India offers a managed float regime and the Indian
Rupee can be freely converted into currency of any other form.
Thus, there is no match between the two countries in this aspect.
Colony/Colonizer

In terms of inheritance of the countrys borders today, although the territories of both the
countries have been inhabited since ancient times, Turkmenistan has inherited a largely
Soviet-era based system on the one hand while India has adopted and refined a British
system after independence.
Corruption

Turkmenistan is ranked 168 out of 177 countries in the Transparency International

Corruption Perceptions Index showing that it is one of the most corrupt countries in the
world. India, on the other hand, fares a lot better with a rank of 94 in the same index. [8]
3.3 Geographical Distance

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11

The two countries of Turkmenistan and India neither share any common borders nor border
the same water body but are relatively close to each other with the distance between their
respective capitals being 2,783 kms.[2]
Land Area

India ranks in at nearly 7 times the size of Turkmenistan with an area of 3,287,263 square
kms compared to that of Turkmenistan at 488,100 square kms. [2]
Climate

Turkmenistan possesses a subtropical desert and arid climate with around 96% of its area
unsuitable for agriculture while India, on the other hand, has a more tropical climate with
48% of its area being arable. [2]
Transportation Infrastructure

Turkmenistans lacklustre transport infrastructure has been highlighted before in this report
with the country possessing a moderate 2,980 kms of railways and 58,592 kms of roadways.
India, on the other hand, has 63,974 kms of railways and an extensive road network of
4,700,000 kms which includes national highways, state highways and other interior and
arterial roads. [2]
3.4 Economic Distance
GDP per capita (USD)

The per capita GDP of Turkmenistan has steadily increased to 6,800 in 2012 compared to
4,400 in 2010 coincident with the GDP growth rate of over double digits during the same
period. [10]
Indias per capita GDP, on the other hand, has remained at the same level of around 1,500
USD during the same timeframe. However, the base effect of higher population also needs
to be incorporated when considering Indias situation into account.
Real GDP growth rate

Indias GDP growth rate has moderated over the last two years around the level of 5-6%
after posting growth rates of 9% during the years before. Turkmenistans economy, on the
other hand, has expanded considerably over the past two years posting growth rates of
above 11% in real GDP. Again, however, the base effect of higher GDP of India needs to be
factored in.[10]
Human Development Index

In terms of the Human Development Index, both the countries fare quite the worse with
Turkmenistan ranked 102 in the index while India ranked still lower at 136. [11]
Internet Penetration

Only 80,400 people in Turkmenistan have access to Internet compared to a whopping 61

million in India showcasing the lack of penetration of web and associated technologies in
the Central Asian nation. [2]

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12

In order to put the comparisons of the CAGE model into perspective, it can be concluded
that all the four distances are high in case of Turkmenistan and India. The relative effects of
these distances as compared to one another can be exemplified as below:

CAGE Framework Analysis Results

Turkmenistan

India

Cultural
8
6
4
2
Economic

Administrative

Geographical

Figure 2: Comparison of CAGE dimensions between Turmenistan and India

4. Trade relationships
The trade relationships of Turkmenistan are best described by the graphs below
representing the countries to which exports are being directed to and countries from where
goods are being imported. The data are summarized for the year 2010. The graphs illustrate
the dominating influence of Russia, China and Iran on the economy of Turkmenistan.
Particularly, the increasing role of China is to be taken note of as it expands its presence in
the country and gain a strong foothold in the share of natural gas exports.
Also, the graphs indicate the marginal position of India in terms of trade with Turkmenistan.

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13

TURKMENISTAN EXPORTS
Asia

CIS

NA

Europe
China
Iran

United Kingdom
Afghanistan
Russia
Italy

Turkey

TURKMENISTAN IMPORTS
Europe

NA
SA
Russia

Asia
CIS

Turkey

China

Germany
Iran
Figure 3: Imports & Exports of Turkmenistan by country

[7]

In terms of the diversity of its trade, the following graphs illustrate the dominating role of
petroleum products in Turkmenistans exports. The imports however, are quite diversified in
terms of goods and services.

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14

Turkmenistan's Exports
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%

Trailers and semi-trailers

Other moving,

Scrap of precious metal

Wool

Plants used in perfumery,

Petroleum jelly

Raw hides and skins of

Raw sugar, cane

Motor vehicles for

Self-propelled bulldozers,

Cars

Petroleum coke

Ships' derricks; cranes

T-shirts

Vegetable saps and

Cotton seed oilcake

Knit or crochet fabric,

Electrical energy

Women's suits, not knit

House linen

Woven fabrics of cotton

Petroleum oils, crude

Woven fabrics of cotton

Peat

Cotton yarn of > 85%

Cotton raw

Petroleum oils, refined

Petroleum gases

0.00%

Polymers of propylene or

5.00%

Figure 4: Imports & Exports of Turkmenistan by product

Machines and

Worked monumental

Apples

Medicaments, packaged

Other tubes and pipes

New pneumatic tires,

Other moving,

Self-propelled

Electrical transformers

Parts for use with

Other bars and rods of

Telephones

Prefabricated buildings

Floating or

Structures and parts

Pumps for liquids

Special purpose motor

Cement

Insulated wire; optical

Motor vehicles for

Tubes, pipes and

8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%

Cruise ships and similar

Turkmenistan's Imports

[7]

4.1 Trade relationship with India

Goods and services imported from and exported to India are described in the following
graphs. A key point of note here is that India imports a good from Turkmenistan that is not
its dominant export good. India does not have any share in the exports of natural gas and
petroleum products from Turkmenistan. It is with this initiative in mind that the TAPI
pipeline is envisaged to help. Turkmenistan is not so distant from India geographically, and
although the pipeline has numerous security roadblocks, it sure provides a feasible way out
to secure Indias energy security particularly considering the fact that Turkmenistans south
and south east are areas of high resource density.

COUNTRY REPORT ON TURKMENISTAN

RAHUL RANGANATHAN

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TURKMENISTAN EXPORTS TO INDIA

Synthetic filament
Wool
tow

Cotton raw

Turkmenistan Imports from India

1%
1%

2%
2%
5%

2%

Medicaments, packaged

2% 2% 1% 1%

Tubes, pipes and hoses and fittings

2%
27%

Refrigerators, freezers

7%

Centrifuges

8%
Worked monumental or building stone
(except slate)

19%
9%
10%

Shawls, scarves, etc, not knit

Builders' joinery and carpentry of wood
Appliances for thermostatically
controlled valves

Figure 5: Imports & Exports of Turkmenistan to and from India

[7]

According to the Indian Ministry of External Affairs, total trade between the two countries
stood at $42.69 million in 2010-11 with exports from India contributing to $ 29.51 million
and $13.18 million worth of imports from India.
4.2 Bilateral relationship with India
2012 marked the 20th anniversary of establishment of political ties between India and
Turkmenistan on a formal note but the two countries have maintained close and friendly
ties historically with the Turkmen Gate built in Delhi in the 1650s. Two notable outcomes
of the bilateral relationship have been the conception of the TAPI pipeline project in 2010
and the conclusion of an agreement on free visa entry for Diplomatic Passport holders in
2011.

COUNTRY REPORT ON TURKMENISTAN

RAHUL RANGANATHAN

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Several delegates have visited from both countries since 1995 with the most notable ones
being the visit of Prime Minister P V Narasimha Rao in 1995 and the visit of Petroleum &
Natural Gas minister Mr Jaipal Reddy in 2012 on the Indian side. From Turkmenistan, both
President Saparmurat Niyazov and Gurbanguly Berdimuhamedov have visited India in 1997
and 2010 respectively.
Also, there is a healthy exchange of people from the two countries with approximately 100
Turkmen students studying in India and about 1,800 Indian nationals plying their trade in
Turkmenistan, mostly in the Oil and Gas industry.

References
1. Background Notes on the Countries of the World: Turkmenistan, January 2012, pp
1-1
2. CIA World Factbook 2013, Central Intelligence Agency, USA
3. Crabtree S., Esipova N., Gallup Presents: Inside Turkmenistan, Harvard
International Review, Summer 2011, pp 72-76
4. Country Intelligence Report: Turkmenistan, IHS Global Insight, October 2013
5. Emerging Europe Monitor: Russia & CIS, Business Monitor International, Vol 17,
Issue 8, August 2013
6. Jumayev I., Foreign Trade of Turkmenistan: Trnds, Problems and Prospects,
Working paper No. 11, Institute of Public Policy and Administration, University of
Central Asia, 2012
7. The Observatory of Economic Complexity, http://atlas.media.mit.edu/, Massachusetts
Institute of Technology, 2010

8. Turkmenistan: An Overview, 2012 PEG BRIEF: Turkmenistan, Political Economy and

Governance (PEG) Brief Series, September 2012
9. World Bank Group - Turkmenistan Partnership, Program Snapshot, October 2013
10. World Bank Development Indicators, http://data.worldbank.org/data-catalog/worlddevelopment-indicators

11. Human Development Index Data, United Nations Development Program,

http://hdr.undp.org/en/countries

12. India-Turkmenistan relations, Ministry of External Affairs, India, June 2012

COUNTRY REPORT ON TURKMENISTAN

RAHUL RANGANATHAN