The Shanghai Cooperation Organisation (SCO) created by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, later added India, Pakistan, Iran and Belarus has now is a 10-member body. SCO engages several observer states and dialogue partners, thereby broadening its diplomatic and economic network across Asia and beyond. The organisation functions through consensus-based decision-making, with its permanent bodies in Beijing and Tashkent focusing respectively on coordination and security cooperation.

Although its initial emphasis was on regional security, especially counter-terrorism, separatism, and extremism, the SCO has expanded into a multidimensional platform addressing trade, energy, transport, digital economy, health, and cultural cooperation. The broadening of its agenda has made it a crucial convening space for Eurasian projects such as transcontinental rail corridors and energy pipelines, giving it both geographic reach and growing strategic importance at a time when global supply chains and financial flows are being reconfigured.

By virtue of its membership, the SCO today represents one of the largest regional groupings in the world. Collectively, the bloc accounts for nearly 42 to 43 percent of the world’s population, with the presence of China and India, which together make up nearly 2.9 billion people. Economically, the SCO contributes close to a quarter of global GDP at market exchange rates and more than a third in purchasing power parity terms.

This weight derives from the combined industrial capacity of China, the energy resources of Russia and Central Asia, the services and technology base of India, and the agrarian strengths of Central Asian economies. The sheer diversity of its economic endowments makes the SCO an attractive platform for internal trade, investment flows, and cooperative development at a time when many countries are seeking alternatives to traditional Western-dominated supply chains and institutions.

The SCO’s growing importance was highlighted at its most recent summit, the 25th Heads of State Council, held in Tianjin, China, on August 31–September 1, 2025. Leaders at the Tianjin summit emphasised the importance of building resilient supply chains, expanding development financing, and enhancing coordination among members in response to the turbulence of the global economy. The summit reaffirmed the role of the SCO as not just a security bloc but also a vital forum for economic coordination and regional development planning where the SCO could act as a platform for members to mitigate the risks of sanctions, trade restrictions, and disruptions in established maritime routes.

India’s economic relations with the SCO have strengthened considerably over the years. With China, India’s largest single-country trading partner, bilateral trade has expanded rapidly. With Russia, the relationship has been reshaped by a surge in discounted crude oil imports since 2022. With Iran, in May 2024, India signed a landmark 10-year agreement to operate the Chabahar port in Iran, which is expected to serve as a critical connectivity hub, providing India access to Afghanistan, Central Asia, and beyond.

Within the SCO, India stands out as the second-largest country by population and one of the principal anchors of economic dynamism. While China is the largest economy, India is currently the fastest-growing major economy within the bloc. According to the IMF’s July 2025 update, India is expected to grow by 6.4 percent this year, well above the global average. This rapid pace is underpinned by strong domestic investment, robust services exports, infrastructure expansion, and the scaling up of India’s digital economy. For the SCO, India’s role is vital not only as a demand driver but also as an investment destination, offering markets, talent, and technology that complement the manufacturing and energy strengths of other members.

India’s trade trajectory with SCO partners has been marked by three broad trends. First, energy-centric trade with Russia has become the centrepiece of the relationship, with Russian crude now accounting for nearly 36 percent of India’s crude oil imports in 2024–25. This has provided India with energy security and cost advantages. Second, India’s strong bilateral trade with China. Third, Central Asia and Iran are increasingly being viewed through the lens of connectivity. The Chabahar port agreement offers India a long-term strategic foothold to connect with Central Asian markets through the International North-South Transport Corridor, creating opportunities for expanding exports of pharmaceuticals, agricultural products, engineering goods, and project services.

India’s trade trajectory with the SCO has witnessed robust growth, with bilateral trade doubling from USD 100 billion in 2019-20 to USD 200 billion in 2024-25. This surge reflects deepening economic engagement across energy, technology, and manufacturing sectors, alongside enhanced connectivity and investment initiatives, positioning India as a key partner in the SCO’s regional trade ecosystem

India’s bilateral trade with SCO Countries (USD Million )

India’s investments within SCO countries also reveal growing diversification. In Russia, Indian refiners have deepened their energy engagements by purchasing discounted crude, while Indian IT services and pharmaceutical companies have increased their market presence. In Iran, India’s investments in Chabahar and the associated infrastructure promise to unlock trade routes that bypass Pakistan and directly link Indian exporters to Eurasia. In Central Asia, Indian companies are making steady inroads into pharmaceuticals, engineering, and telecom, sectors that align with local needs. With China, direct investment flows remain constrained by regulatory and political sensitivities, but indirect linkages via global value chains in electronics and auto components continue to sustain limited commercial interactions.

Looking ahead, the SCO’s significance in the new world economic order rests on several structural factors. The bloc’s scale, diversity, and resource endowments make it a natural hub for south–south cooperation, particularly as Western economies tighten their trade regimes. The geographical spread of the SCO also places it at the heart of Eurasian connectivity corridors, from China–Central Asia railways to India’s westward reach via Chabahar and the International North-South Transport Corridor. These corridors are expected to play an increasing role as global shipping lanes face higher risks and costs.

At the same time, members have been discussing local currency trade, cross-border digital payments, and development finance initiatives, which could gradually evolve into an SCO-branded financial framework. The Tianjin summit’s emphasis on new financing options highlighted this trajectory. Energy will also remain a defining theme, with SCO members simultaneously exploiting hydrocarbon resources and investing in renewable technologies. India, for instance, is pairing its gains from discounted crude imports with ambitious domestic programs in green hydrogen, solar power, and electric mobility, opening possibilities for new cross-border joint ventures in clean energy.

In conclusion, the SCO has transformed from a limited security forum into a continental economic platform that brings together some of the world’s largest and fastest-growing economies. India’s position as the second-largest country and its status as the fastest-growing economy within the SCO give it a particularly crucial role in shaping the bloc’s trajectory. By leveraging energy linkages with Russia, managing trade deficits with China, and building strategic connectivity with Iran and Central Asia, India has positioned itself as both a beneficiary and a contributor to the SCO’s economic dynamism.

As the block is institutionalising logistics, payments reforms, and development financing, while carefully managing geopolitical developments, it is well-placed to increase its share in global trade and investment flows. In the years ahead, the SCO’s economic weight, strategic geography, and cooperative structures could decisively reshape the contours of the emerging world economic order.