Thursday, 10 September 2015

India and the CPEC project: to oppose or not to oppose?

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By Sudha Ramachandran (09/02/2015 issue of the CACI Analyst)

By linking Kashgar with Gwadar port through a network of roads and railway lines, the China-Pakistan Economic Corridor (CPEC) project has the potential to inject new life into the region’s economies. While India has expressed strong objections to the CPEC for economic as well as strategic reasons, it could also benefit from the project by opening up an overland route to new markets in Central Asia. 

BACKGROUND: Pakistan and China have set out on a grand collaborative venture: the China-Pakistan Economic Corridor (CPEC) project. A 3,000-kilometer network of roads, railway lines, energy pipelines and fiber optic cables linking Kashgar in China’s Xinjiang province with Gwadar, a deep-sea port in Pakistan’s Baluchistan province, CPEC is an important part of China’s One-Belt, One Road (OBOR) initiative. It promises economic and geo-strategic benefits to Pakistan and China as well as the region. Yet, it has triggered apprehension in neighboring India.

China’s role in CPEC is enormous. It funded and constructed Gwadar port, which is the gateway of the corridor. In 2013, Pakistan handed over management of this strategic port to a Chinese company, China Overseas Port Holdings for a 40-year period. A few months later, Chinese Premier Li Kegiang outlined plans for the economic corridor while on a visit to Islamabad. And in April this year, Chinese President Xi Jinping announced plans to invest US$ 46 billion in the CPEC project. Dozens of deals worth billions of dollars have been signed for construction and upgrades along the corridor’s route.

CPEC has been described as a “game-changer” in Pakistan. Besides bringing in funds to Pakistan’s investment-starved economy, the project will improve the country’s ramshackle transport and energy infrastructure. Business at Gwadar port, which has been lackluster so far, is likely to increase, boosting Pakistan’s chances of emerging a regional transshipment hub.

As for China, CPEC will provide its landlocked Xinjiang province with access to the sea. This will boost the economy of this restive and economically underdeveloped province. Importantly, CPEC provides Chinese trade with West Asia with a shorter route. It provides Beijing with an alternate route for importing oil and other goods from West Asia and Africa, thus reducing its dependence on the present route via the Straits of Malacca. CPEC thus eases China’s “Malaccan dilemma” i.e. its apprehension that a possible takeover of the Straits of Malacca by forces hostile to China would paralyze the Chinese economy. Thus CPEC enhances China’s energy and economic security.

During his visit to China in May, India’s Prime Minister Narendra Modi is reported to have raised “very strongly” India’s reservations regarding CPEC. He is said to have told the Chinese leadership that the project is “unacceptable” to India. So what are India’s objections to CPEC? Is it as many Pakistanis seem to believe just a matter of envy over a project that is touted to bring riches to rival Pakistan? What are CPEC’s implications for India?

IMPLICATIONS: Pakistan and China enjoy a warm relationship that goes back over five decades. Economic and defense co-operation is robust, including in the nuclear field. Co-operation over CPEC is expected to further cement the Sino-Pakistan bond, triggering concern in India.

India has raised objections to the corridor’s route, which runs through Gilgit-Baltistan, territory which India lays claim to. Part of the Indian state of Jammu and Kashmir (which, in turn, is claimed by Pakistan), Gilgit Baltistan has been under Pakistani control since 1947. India has objected to Pakistan’s moves to assert ownership or consolidate control over what it considers Indian territory under its occupation. Thus it objected to Pakistan offering the Shaksgam Valley to China in 1963 and to China’s construction of Karakoram Highway and its investment in “development” projects here.

India also has strategic concerns. For over a decade now, analysts have been drawing attention to China’s “String of Pearls,” a network of ports extending from its eastern coast to West Asia. They have argued that China’s funding and construction/upgrading of these ports aims at gaining access to naval facilities, perhaps even permission to set up bases here in the future. The strategy would give China permanent access to the Indian Ocean, through which vital shipping routes for China’s oil imports from the Persian Gulf run. India fears that China’s String of Pearls is aimed at encircling and containing India. It views the Maritime Silk Route project as a benign reinvention of the String of Pearls strategy.

Gwadar port is said to be the western-most “pearl” in this “string.” Its strategic location near the mouth of the Straits of Hormuz is of concern to India as 63 percent of India’s oil imports are transported via this waterway. A Pakistan-China presence here, especially with Beijing gaining management control of this port for 40 years has deepened India’s anxieties as it has the potential to undermine India’s energy and economic security.

CPEC heightens the threat China poses to India’s defense. In the event of a military confrontation with India or if China decides to come to Islamabad’s aid in an India-Pakistan war, CPEC’s infrastructure will facilitate Chinese deployment of troops rapidly to India’s western front, as well.

While the arguments underlying the opposition of India’s more hardline security analysts to China’s CPEC and OBOR initiatives may have some validity, India would benefit from a more flexible approach to these initiatives.

As Jabin Jacob, Assistant Director of the Delhi-based Institute for Chinese Studies told this writer, while “India must continue to officially make the point that the CPEC passes through disputed territory, something even the Chinese acknowledge via their 1963 treaty with Pakistan, it is pointless to stress this beyond a point.”

“India could also benefit from CPEC if it were to be extended to connect with Indian markets,” Jacob pointed out. India has been eyeing an overland route to Central Asian markets, which CPEC’s infrastructure would provide. By staying out of the project, India stands to “lose heavily,” warns former Indian Ambassador Melkulangara Bhadrakumar, pointing out that with the rest of South Asia keen to get on to the Chinese OBOR initiative, India could end up isolated.

India needs to be “magnanimous” and support CPEC for what it can do for Pakistan’s economy, Jacob said, drawing attention to the employment it can generate and the stability it could bring. “Ultimately,” he pointed out, “a stable Pakistan that can be weaned away from religious extremism is in both Chinese and Indian interests.”   

CONCLUSIONS: The CPEC project promises rich rewards not just to Pakistan and China but to India and other countries in South and Central Asia as well. It is in the economic interest of Islamabad and Beijing to draw India into the project. India’s markets are the big prize that they should be eyeing and work to connect with. This will require them to allay Indian misgivings about the project.

Given Pakistan’s reluctance to provide India with overland access to Afghanistan and Central Asia, as it fears Delhi’s rising influence in that region, Islamabad is likely to oppose India’s involvement in CPEC. It is China that will have to convince Pakistan. How keen it is to get India on board the CPEC project will depend on whether China’s goals regarding CPEC are economic or aimed at encircling India.

AUTHOR’S BIO: Dr. Sudha Ramachandran is an independent researcher / journalist based in India. She writes on South Asian political and security issues. Her articles have appeared in Asia Times Online, The Diplomat, China Brief, etc. She can be contacted at  This email address is being protected from spambots. You need JavaScript enabled to view it. .

Image Attribution: Wikimedia Commons 

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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