Pakistan recently entered a new phase with China in the development of the multibillion-dollar China-Pakistan Economic Corridor (CPEC). The second phase aims to create Special Economic Zones (SEZs) and promote industrialisation, further strengthening the partnership between Pakistan and China. CPEC is a critical component of the Belt and Road Initiative (BRI), linking Southeast Asia, Central Asia, Africa, Europe, and the Gulf region through an extensive network of land and sea routes. The ever-evolving geopolitics surrounding CPEC has garnered attention globally and stirred up concerns for India.
Understanding the China-Pakistan Economic Corridor (CPEC)
At the heart of the project is a 3,000-km pathway of infrastructural developments connecting China’s northwest Xinjiang Uygur Autonomous Region and Gwadar Port in Balochistan, Pakistan. The bilateral agreement between Pakistan and China aims to enhance connectivity throughout Pakistan, building highways, railways, pipelines, energy projects, industrial developments, and more. The corridor will provide a route for China to access the Middle East and Africa via the Gwadar Port, facilitating access to the Indian Ocean. China, in turn, supports development projects within Pakistan, aiding in addressing energy crises and economic destabilisation.
India’s Stance on CPEC
CPEC has faced strong opposition from India because it involves Pakistan-occupied Kashmir (PoK), a territory contested by India and Pakistan. India has lodged protests to China over the corridor’s establishment through PoK. On the other hand, India is part of the Quad (comprising India, the US, Australia, and Japan), which offers alternative infrastructure solutions for countries, presenting potential alternatives to China, such as the Blue Dot Network (BDN) and Build Back Better World (B3W) initiative.
Implications of CPEC for India
The development and success of CPEC present significant consequences for India. Key implications include potential infringements on India’s sovereignty, altering international shipping trade routes, an increase in China’s presence in the Indian Ocean, the emergence of Pakistan as a significant player in regional exports, and the strengthening of China’s trade leadership via the BRI project. CPEC’s effects are far-reaching, shaping the way global trade is conducted and having potential geopolitical implications for countries like India.
The Sovereignty Issue
India has expressed consistent opposition to CPEC due to its course through PoK, a region claimed by both India and Pakistan. This project could potentially affect India’s claim over Kashmir. While local business and political leaders from both sides of the Line of Control (LoC) have expressed positive views about the project, it could lead to the international acceptance of Gilgit-Baltistan as Pakistani territory if successful.
Chinese Control Over Sea Trade
Significant East Coast US ports rely on the Panama Canal for trade with China. The operationalisation of CPEC will offer a shorter, more economical trade route bypassing the entire Western Hemisphere, presenting China with leverage over international cargo movements between the Atlantic and Pacific oceans.
China’s String of Pearls Strategy
The “String of Pearls” strategy refers to China’s plan of surrounding India with a network of airfields and ports, an ambition that raises security concerns for India. The Gwadar port’s control solidifies China’s dominance over the Indian Ocean.
Pakistan’s Emergence as an Outsourcing Destination
CPEC could fast-track Pakistan’s economic growth, particularly in industries where it competes directly with India in major markets like the US and UAE. Easy access to raw materials from China could position Pakistan as a leader in these sectors, potentially hindering India’s export volumes.
Stronger BRI and Chinese Dominance in Trade Leadership
CPEC marks a significant step towards the BRI project, raising concerns about China’s political domination in the region. If China can integrate more seamlessly with the global economy, it could wield greater influence in the United Nations and individual nations, which might be problematic for India’s aspirations to acquire a permanent seat at the UN Security Council.
Way Forward
India’s strategic approach to CPEC should involve a reassessment of both potential benefits and disadvantages. Increasing the pace of work on its own strategic projects like the Bangladesh, China, India and Myanmar Economic Corridor (BCIM) and Chabahar Port might be beneficial. Meanwhile, the Asia-Africa Growth Corridor, an India-Japan economic cooperation agreement, could offer valuable strategic advantages and serve as an effective counter to China.
