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Mongolia is currently putting the finishing touches to its preparations for a visit by the Speaker of the House of the People, the lower house of India’s Parliament, which will take place from July 6-9 this year. The visit was announced in a meeting between India’s ambassador to Mongolia and the speaker of the State Great Khural, Mongolia’s unicameral parliament.

The two countries have a long history of mutual relations, despite the geographical distance separating them. Both countries consider that their diplomatic relations can be traced back to the contacts between the Hunnic Empire (to which Mongolia sees itself as a successor state) and Indian monks and traders back in the first millennium BC. One important link between the two countries is religion – Buddhism, which is central to Mongolian culture and national philosophy, was introduced to Mongolia from India via Tibet in several waves, most recently in the 15-16th Centuries.

But today the relations between India and Mongolia are no longer merely a reflection of the “religious and cultural affinities between the two nations,” and are in fact developing into a political and economic partnership. In this article the author will attempt a brief assessment of the current state of relations between Mongolia and India, and also look at some global processes in the area of international relations.

In 2015 the relationship between the two countries was officially elevated to the status of a “strategic partnership”. India was Mongolia’s fourth strategic partner (after Russia, China and Japan). The parties have described their relationship as a “partnership between two Asian democracies,” a phrase which serves as a description of their political and ideological context.

The two countries’ relations are coordinated by a number of joint committees, including the Joint Working Group on Defense and the Joint Cooperation Committee, which meet at the ministerial level.  A significant milestone in their relations was the wide ranging support which India gave Mongolia, free of charge, during the COVID-19 pandemic.

One of the leading projects to come out of the partnership is Mongolia’s first oil refinery, which is currently being constructed in Dornogovi (East Gobi) aimag. The facility is being financed using a subsidized $1.2 billion loan provided by the Indian government. Engineers India Limited, a company with more than half a century’s experience in oil production and refining, led the work on the preparation of the feasibility study and is also responsible for most of the construction work. Another Indian company, Megha Engineering & Infrastructure Limited, is overseeing the construction of the refinery’s power facility and individual refining units.

Talks between the two countries on the construction of the refinery began back in 2017, and the agreement on the financing and implementation of the project was signed in 2019. For the Mongolian government, the main objective of the refinery project is to make the country fully self-sufficient in terms of refined oil products. This economic goal was first set out in Mongolia’s 2011 National Security Strategy. Incidentally, if Mongolia does become self-sufficient in terms of fuel and energy sources, then that will have the effect of weakening Russian influence in the country.

The implementation of the project is moving ahead at full speed. In May 2023, the parties announced that they had completed more than 80% of the first stage of construction – the development of the basic infrastructure – and had begun the second and third stages (out of a total of four) stages. The refinery is scheduled to begin operation by 2025, and Mongolia’s GDP is expected to increase by 10% as a result.

Despite the central role played by the Indian government in the construction of the refinery, it is very much an international project. For example, in 2022 the Chinese state company Norinco International Cooperation began work on the construction of the 530-kilometer pipeline from Mongolia’s Tamsag oil deposit to the refinery. That oil deposit was also developed by Chinese state companies, who also prospected for oil deposits in Mongolia’s Gobi desert. It is clear that China, as well as India, has an economic interest in the construction of Mongolia’s oil refinery.

The two countries are also considering the possibility of increasing India’s imports of Mongolian mineral resources. In an online meeting held in 2021 between the Mongolian Coal Association and representatives of Indian corporations and associations including the Indian Coal Preparation Society, Tata Steel, Cotecna India, Talcher Fertilizers and the Central Institute of Mining and Fuel Research, the participants discussed proposals to increase India’s imports of Mongolian coking coal.  This is a promising area of cooperation between the two countries, as Mongolia’s production of coking coal is increasing, while India is facing shortages of such coal caused by the growth of its steel production.

The two countries take part in annual joint military and tactical exercises, which are held in India. And India also participates in the annual international Khaan Quest exercises, hosted by Mongolia.

In summary, India is an important Asian partner for Mongolia, and with its support Mongolia is aiming to achieve the significant economic goals that it has set itself and which its government sees as being essential to its national security. India, which is currently stepping up its cooperation with the US, may in the future serve as a link between Mongolia and the US, and Russia and China (both neighbors of Mongolia) may feel less threatened by Mongolia’s relative loose connection to India than they would by direct links between Mongolia and the US. We can therefore expect to see some aspects of the “American narrative” being applied in relation to Mongolia, and to Mongolia’s links with India, and this may involve Mongolia’s participation in the Indo-Pacific project, which is currently primarily an American and Japanese initiative.

Boris Kushkhov, the Department for Korea and Mongolia at the Institute of Oriental Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

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