The 25th SCO Summit in Tianjin marked a turning point for Eurasia. With leaders representing nearly half the world’s population and a quarter of global GDP, the summit showcased China’s influence, Russia’s resilience, and India’s multi-alignment strategy. Proposals on finance, energy, AI, and connectivity signalled a bold push towards a sanctions-resilient, multipolar order beyond Western dominance.
AMBASSADOR SUSHIL KUMAR SINGHAL, IFS (R)
FOR NEWS ANALYTICS
a 5 mins read.
The SCO Summit in Tianjin (August 31–September 1, 2025) was a gathering of leaders representing 42% of the global population and 25% of global GDP. It gave President Xi Jinping an opportunity to showcase the heft of China in global affairs. The joint statement spelled out an unprecedented institutional agenda that included finance, energy, payments infrastructure, and technology interoperability. The declaration became important as it was against the backdrop of US tariff pressure on India and wider decoupling dynamics. The Summit also gave a clearer contour of possible India–Russia–China (IRC) alignment inside a larger Eurasian setting, which, if continued, could even rebalance trade and security architectures for the rest of the decade.
The SCO began as a security group and, over two decades, it has evolved into a broad political-economic forum, now having ten members including Belarus (the first European member, admitted in 2024). In Tianjin, members pushed beyond communiqués into proposals that (if implemented) would create new capabilities: an SCO Development Bank (or an EDB-anchored workaround), SCO-wide energy cooperation, and national currency settlement with a shared payments/depository system.
Two proposals stood out. First, China revived its long-standing proposal for an SCO bank, though Russia is wary of ceding financial control to China and floated the compromise of issuing SCO-labelled bonds. Either path would institutionalise non-Western project finance and facilitate intra-SCO trade in local currencies. Second, China proposed BeiDou satellite services and an AI cooperation centre, providing SCO members with a dual-use alternative to US-centric GPS and AI ecosystems.
The optics do matter. India can bargain with the USA on trade, etc., from a position fortified by visible options in Eurasia.
SUMMIT DECLARATION
New financial instruments, energy platforms, and digital interoperability are not rhetorical; they are blueprints of the future. The bond proposal of President Putin and calls for shared payments/depository systems suggest a sanctions-resilient financial stack. Xi’s Global Governance Initiative and funding pledges gave the agenda money muscle.
Astana 2024 brought Belarus aboard and SCO now boasts key logistics hubs that link the Arctic, Baltic, Central Asia, the Persian Gulf, and the Indian Ocean. This is no longer symbolic; it is how oil, gas, grains, critical minerals, and manufactured goods will be routed if tariff/sanctions frictions persist.
Prime Minister Modi met Xi Jinping and Vladimir Putin, and emphasised the India–China development partnership while safeguarding strategic autonomy. The optics do matter. India can bargain with the USA on trade, etc., from a position fortified by visible options in Eurasia. It can engage with Russia on energy and corridors (INSTC, Rasht–Astara) while keeping channels with the West open. This is multi-alignment and an expression of strategic autonomy.
NEW COLLABORATION
Russia needs stable southern outlets, Iran wants economies of scale for east–west/north–south routes, and India wants cheaper crude oil and shorter trans-shipment times. The INSTC rail link (like Rasht–Astara) has now gained momentum, and SCO cover provides diplomatic insurance for working around sanctions choke points.
If an SCO bank or an EDB-anchored window emerges, syndicated projects denominated in RMB or baskets of national currencies would become a reality. Putin’s push for SCO bonds and a common depository/settlement interface is a direct response to dollar system risks. It also satisfies India’s desire to reduce volatility in trade settlement without giving up monetary independence.
It is pertinent to mention that despite current tensions, US–India ties are not going to collapse any time soon.
IMPLICATIONS FOR GLOBAL TRADE
A functioning SCO finance system would not dethrone the US dollar in the near future, but it would lower risks for SCO-internal trade and restrict the ability of the USA to weaponise clearing networks. Even partial uptake – e.g., using a depository bridge to settle energy bills in national currencies – would erode single-point leverage.
With Belarus inside the SCO and Iran as a full member, a north–south spine (Russia–Caspian–Iran–India) and an east–west belt (China–Central Asia–Caucasus–Europe) would gain institutional approval. If insurance, customs, and port digitisation are harmonised under SCO standards, it would reduce per-container friction. This can be true even if routes outside the SCO remain more expensive or change rules more often; standardisation inside the SCO still makes its routes faster and smoother.
The SCO’s promotion of BeiDou and data platforms would provide a sovereign-technology posture in trade logistics, fintech, and smart infrastructure. Exporters will face dual standards (US/EU versus SCO-centric), requiring costly compliance or strategic market choosing. SMEs would likely follow the standard dominant in their primary financing channel.
It is pertinent to mention that despite current tensions, US–India ties are not going to collapse any time soon. But with tariff frictions spiking, India can flaunt Eurasian options as leverage. India would ask for tariff rollbacks or carve-outs while signalling that SCO finance/energy channels can offset pressure.
SECURITY RAMIFICATIONS
SCO has earlier set up the Regional Anti-Terrorist Structure (RATS), but now the security-economics fusion, with trade and finance becoming integral to the group, would increase the political cost of cross-border militancy and narcotics flows that destabilise member regimes. It also builds a passport for coordinated border technology (drones, sensors, AI analytics) anchored to shared standards.
President Xi and President Putin pushed the narrative of democratised multilateralism and a Eurasian security model that would sideline US bloc politics. Whatever one thinks of the rhetoric, the mechanism would regularise SCO-CSTO-EAEU consultations plus energy/payment coordination, becoming the operating system for crisis management from the Levant to the Pamirs. India prefers issue-based coalitions and can easily plug into pieces instead of committing to the whole architecture.
The USA still has the most sophisticated capital markets, deep tech, and security partnerships across the Indo-Pacific. But Tianjin marks a confident bid to build redundancy: finance that clears without New York, satellites that time without GPS, corridors that ship without Suez chokepoints dominated by Western insurers. In that world, US coercive tools – e.g., tariffs, export controls, secondary sanctions – retain bite but face diminishing returns among states that can reroute trade and payments.
For India, the calculus is surgical. It wants US technology, capital, and market access. It also wants discounted Russian energy, Iranian transit, and less foreign exchange risk. The more functional the SCO toolkit becomes, the greater would be India’s negotiation space with the USA on tariffs, visas, and market access – exactly what India is currently trying to achieve in the renewed trade talks after the tariff shock.
RISKS AND CONSTRAINTS
A new bank or payments hub could tilt towards Chinese preferences. Russia will try to avoid becoming a junior partner in finance after already conceding technological and trade leverage since 2022. One can expect hard bargaining over governance, seat allocation, and currency composition.
Tianjin’s warmth does not erase the border situation for India. Any sharp deterioration along the LAC could stall India’s participation in sensitive SCO tech or financial pilots. Conversely, incremental de-escalation, flight resumptions, and trade facilitations would make functional cooperation easier.
If SCO finance becomes a channel for sanctions evasion, expect counter-measures: tightened export controls, compliance blacklists, or secondary sanctions from the West. That would force India and Central Asians to delicately balance between opportunity and risk.
THE CHABAHAR SHOCK
The US decision to remove the sanctions waiver for India’s operations at Chabahar Port in Iran adds another layer of urgency and complexity to these SCO plans. Chabahar has long been India’s strategic gateway to Afghanistan and Central Asia, bypassing Pakistan and anchoring the International North–South Transport Corridor (INSTC). Its development has been critical for India’s credibility as a connectivity provider within the SCO framework.
With the waiver gone, Indian investments and operations at Chabahar are now exposed to secondary sanctions risk. Within SCO, this will be read as a stress test of the club’s ability to provide institutional cover against external sanctions. It is likely to accelerate conversations around using SCO finance mechanisms and local currency settlements as ways to shield projects from Western pressure.
For India, the dilemma is real. Retreating from Chabahar undermines its strategic autonomy and weakens its SCO presence; continuation risks friction with the USA at a time of tariff and visa disputes. India would like to negotiate carve-outs while simultaneously doubling down on SCO connectivity pilots, positioning itself as both resilient and indispensable.
The Tianjin summit declaration is not anti-Western grandstanding; it is the methodical construction of options for Eurasian states. For India, it means leveraging trade and energy security while bargaining harder with the USA on tariffs and mobility. For Russia, it means a sanctioned economy respiration via southern corridors and non-dollar finance. For China, it means standards leadership and a platform that translates industrial scale into rules others must follow. If – and that is a big if, given the differences in SCO – even half of the proposed instruments graduate from communiqués to operations, the global system will feel less like a wheel with a single axle and more like a web of hubs. That future will be messier, but also more resilient.
(Ambassador Sushil Kumar Singhal, IFS (R), former Ambassador to Angola. He has served in Tanzania, Belgium, Bangladesh and Hungry. The views expressed are of the author and do not necessarily reflect the views of The News Analytics Herald.)
Key Takeaways
- SCO Tianjin Summit gathered leaders representing 42% population and 25% global GDP.
- Proposals included SCO bank, energy cooperation, and BeiDou–AI integration frameworks.
- India–Russia–China alignment gained traction amid US–India tariff frictions.
- New finance tools aim at sanctions resilience and reduced dollar dependence.
- Chabahar waiver removal adds urgency to India’s Eurasian connectivity strategy.
