India and BRI

This article is inscribed by Rishi Raj Singh.

India indicated on 21st March 2019 that it may not be taking part in China’s second forum for its ambitious $4 Trillion Belt and Road Initiative (BRI), stating that no country can participate in a project that has not adequately addressed its concerns.

Vikram Misri, India’s ambassador to China, said during an interview with the Chinese English daily Global Times that -“No country can take part in an initiative that ignores its core concerns on sovereignty and territorial integrity,

Although China introduced its ambitious mega-infrastructure initiative, called the Belt and Road Initiative (BRI), which can be called its dream project, before the world in 2013, it appears the same could turn out to be a dragon’s nightmare. BRI Forum’s First Conference was called in 2017. More than 100 countries took part, and it was thought that China received overwhelming support from the rest of the world for the initiative.

India boycotted that conference as projected as part of the BRI was the China-Pakistan Economic Corridor (CPEC) being built through Pakistan-occupied Kashmir (PoK). However, when the BRI Forum’s second conference was organized in the last week of April 2019, which India again boycotted, a lot of apprehensions were expressed and questions were raised about several aspects of this project. This time, China’s trust seemingly shaken. Experts around the world have begun to question the feasibility of this project.

Now for our basic understanding we first understand what is BRI?

So, BRI is a massive infrastructure project sponsored by China, aimed at creating a corridor for infrastructure, commerce, energy and telecommunications across 152 countries and international organizations in Europe, Asia, the Middle East, Latin America and Africa. 

Belt and Road Initiative aims to boost international trade by enhancing connectivity through road, rail and maritime routes between different countries. The proposal is linked to the historic ‘Silk Road’ which was first developed nearly 2,000 years ago by the Han dynasty, the Chinese claim. Besides this, BRI will pave the way for a number of corridors around the world. There is the Silk Road Economic Belt in this initiative, which would connect China with Central and South Asia, and subsequently Europe. A new maritime ‘Silk Road’ will be added, connecting China with South East Asia, the Gulf countries, East Africa and Europe. Six economic corridors are planned to connect with this belt and road into other countries. How far this initiative will bear fruit, and what form it will take, is still being discussed.

Salient Features of BRI:

Countries that are proposed to become BRI partners account for almost one-third of the world’s GDP and international trade, while two-thirds of the world’s population lives in these countries. In many of these countries, as much as 25 per cent of the population lives in poverty. Resources in these countries are not fully utilized in the absence of infrastructure and therefore their development is impacted. 

It is claimed that infrastructure development would reduce trade constraints, and hence the condition of people in those countries could improve. It is said that the project would not only improve inter-country road, rail and maritime connectivity, but also make goods transportation easier, cheaper and faster. It currently takes almost 30 days to take goods by sea route from China to central Europe. This time over the rail route would be reduced by half. When delivering goods from the factory to the destination takes longer, it obviously constitutes an obstacle to trade.

Significance with regard to Public International Law:

Something around 70 countries, including China, are expected to participate in the BRI according to the proposals. Since the project hasn’t fully taken shape, it’s hard to conclusively estimate how much investment it would need. A broad estimate, however, says BRI investments can total $1,000 billion to $8,000bn. In addition to this, there will be government investments in various countries as well as in the private sector. All told and done, the total investment is expected to be so large that no one is willing to say anything about the project’s financial part. However, it would not be easy to realize the benefits expected from BRI. Even if the transportation of goods is facilitated via road, rail and maritime routes, there is no guarantee that trade will automatically improve. World Bank research shows that trade may continue to be inhibited because of a host of reasons. Building so much infrastructure needs several trillion dollars of investment, which China cannot make on its own. In addition, the project is looking too risky to finance it for other countries.

Countries in which the infrastructure is to be built are economically so weak that they would be overly dependent on other countries, including China. The borrowing proposed for the projects could increase their debt burden. World Bank says poorer BRI countries’ debt / GDP ratio can impact their sovereignty. They’re scared of participating in BRI for this reason.

According to the World Bank, the legal systems are too weak to protect investor rights in most of these BRI countries. These countries may have to make structural changes to make this mega project take off, which isn’t going to be an easy task.

Relevance for India:

India has boycotted BRI from the outset, claiming it could take most BRI countries’ debt burden to unsustainable levels. However the main cause of India’s opposition, though, was the CPEC being built by China through Pakistan-occupied Kashmir (PoK). India said, “We firmly believe that connectivity initiatives must be based on international standards, good governance, Rule of law, openness, transparency and equality that are universally recognized. Connectivity initiatives must follow financial responsibility principles to avoid projects that would create unsustainable debt burdens for communities; balanced ecological and environmental protection and preservation standards; transparent cost assessment of projects; and skills and technology transfer to assist in the long-term running and maintenance of local communities’ created assets. Connectivity projects need to be pursued in a way that respects sovereignty and territorial integrity. “With much fanfare, this Belt and Road Initiative was introduced to the world. However, the cold response of most large and rich countries, particularly those from which great investment was expected, raises questions about the likelihood of this initiative’s success.

Critical Analysis on BRI:

The Asia Pacific region appears to be enthralled by China’s Belt and Road Initiative (BRI), which is essentially aimed at developing the participating countries’ infrastructures. According to Eric Brown, the Geopolitical Economic Risk, Belt and Road Initiative research analyst promises to connect China to neighboring and remote regions along its southern and western borders through a massive infrastructure investment project including roads, railways, ports, energy pipelines and digital networks. BRI promises to spend one trillion dollars, which is several times greater than the Marshall Plan for European Economic Rejuvenation undertaken. Overall, the BRI includes more than 60 countries (figures vary), affects almost 62 per cent of the world’s population and includes more than 30 per cent of global gross domestic product. Yet despite its impressive metrics, the project still only satisfies a fraction of the region’s larger demand for infrastructure. The Asian Development Bank (ADB) is estimating that between 2016 and 2030 the continent will require more than $26 trillion of investment.

Conclusion: 

China has reiterated that the absence of India from the BRI festivities will not have an impact on Indo-China relations. Chinese Foreign Minister Wang Yi stated at a BRF press conference that India-China ties have been isolated from differences due to BRI, as reported by The Hindu. Wang argued in an attempt to assuage Indian fears around CPEC, “One of our differences is how we look at the BRI. The Indian side has worries. We understand that, and that is why we have made it clear on many occasions that the BRI, including the CPEC, is merely an economic initiative and does not target any third country, and has nothing to do with the sovereign and territorial disputes between any two countries that have been left out of history.

Belt and Road Initiative (BRI) is often understood in simplistic terms as being opposed by India and backed by Pakistan. The reality is rather more complex on the ground. The emerging consensus in India seems to be that the BRI can be understood as a long-term strategic initiative that seeks to convert China’s current economic power into diplomatic influence, far from being exclusively an economic and infrastructure development programme. While attempts have been made by Beijing, a coherent discourse designed specifically to address Indian concerns has not yet met the reflexive Indian suspicion of Chinese international projection, including of China’s BRI. In Pakistan, by contrast, widespread acceptance of the importance and necessity of the China – Pakistan Economic Corridor is increasingly coupled with concerns within sectors of Pakistani society about the project’s fairness, transparency and eventual economic results. This paper is therefore divided into two parts: the first looks at how Indian analysts viewed and responded to the BRI ‘s Chinese discourse and arguments; the second looks at the debate on the China – Pakistan Economic Corridor in Pakistan.

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