Belt and Road Action Plan: Choices for India

During the Bo Ao Forum for Asia convened in Sanya, Hainan between 26^th and 29 March, China’s National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce on 28 March issued an action plan on President Xi Jinping’s pet project ‘One Belt and One Road’ or the Belt and Road initiative.

The concept was first proposed by Xi Jinping during a speech at Nazarbayev University, Kazakhstan on 7 September 2013 when he said that ‘To forge closer economic ties, deepen cooperation and expand development in the Euro-Asia region, we should take an innovative approach and jointly build an ’economic belt’ along the silk road. This will be a great undertaking benefitting the people of all countries along the route.’ Xi proposed that traffic connectivity need to be improved so as to open the strategic regional thoroughfare from the Pacific Ocean to the Baltic Sea, and gradually move toward the set-up of a network of transportation that connects Eastern, Western and Southern Asia. Chinese President also urged the regional members to promote local-currency settlement so as to improve their immunity to financial risks and their global competitiveness.’

The initiative of building MSR was proposed by Xi Jinping during his visit to Indonesia in October 2013 in order to deepen economic and maritime links. The MSR begins in Fuzhou in Southeast China’s Fuzhou province and heads south into the ASEAN nations, crosses Malacca Strait and turns west to countries along the Indian Ocean before meeting the land based Silk Road in Venice via the Red Sea and Mediterranean.  Under the ambit of MSR, China plans to build hard and soft infrastructure from Indo-Pacific to Africa, including transport, energy, water management, communication, earth monitoring, economic and social infrastructure.

China realises the importance of the geo-economic as well as geo strategic importance of the MSR, for there are 32 littoral countries including China that touches the ‘21^st Century MSR’. The combined population of these countries is around 4 billion people, and the GDP of around $16 trillion. These are the countries with huge potentials and have archived rapid economic growth recently. From 2007 to 2012, the lowest annual growth rate was 5.27% that of Sudan, and the highest average annual growth rate of 22.83% that of Myanmar. In the view of these figures, China believes that the ‘21^st Century MSR’ is going to be an important driver of regional as well as global economic growth. And given the over capacities and structural adjustments being carried out in China, also pronounced as ‘New Normals’, China sees an opportunity for sustaining its domestic economy on one hand while strengthening strategic partnership with various countries on the other. 

The document released on Saturday points out that economic connectivity is the heart of the matter for which Chinese President Xi Jinping also announced the establishment of a Silk Road Fund with 40 billion US dollars to support infrastructure investments in countries involved, and have also linked the establishment of Asia Infrastructure Investment Bank (AIIB) and BRICS New Development Bank to the initiative as well. The document talks about ‘Silk Road Spirit’ interpreted as “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit." It says that Initiative is in line with the purposes and principles of the UN Charter. The initiative is open and inclusive, Chinese ambassador to India, Amb. Le Yucheng does not subscribe it a Chinese solo but ‘a symphony performed by various countries.’ The document identifies five major goals of the initiative in terms of promoting policy coordination, facilitating connectivity, uninterrupted trade, financial integration and people-to-people exchanges. It is in the view of its massive scale that the strategic community has raised various questions including whether such initiatives are in sync with China’s foreign policy goals; or is the initiative an antidote to the US foreign policy goals like ‘pivot to Asia’ or ‘Trans Pacific Partnership’ (TPP)? Or, is China challenging the US hegemony and rewriting the rules of geopolitical architecture? 

India’s options

Why has India remained silent to China’s invitation even if the former has underscored the importance of India as far as the initiative is concerned? Should security analysts and sceptics see these initiatives as part of ‘strategic encirclement’ of India, and club it with China’s similar but smaller initiatives such as China-Pakistan Economic Corridor, the prospective Trans-Himalayan Economic Zone of Cooperation with Nepal and Bhutan, and the BCIM Economic Corridor that connects India’s northeast to China’s southwest, Bangladesh and Myanmar? Is it because of this ‘strategic encirclement’ of India that India is going slow on the BCIM-Economic Corridor even if it was officially signed during Premier Li Keqiang’s India visit in 2013 and falls in the ambit of ‘one belt’ initiative? The security establishment and strategic community have always maintained that India cannot give China access to its sensitive areas. But, can the new government in office think differently on the issue?

As far as ‘Belt and Road’ initiative of China is concerned, India has been part of the initiative with the signing of the BCIM – EC. The work is in progress. As India’s Look East Policy has been widening in scope, the BCIM-EC is another area where the policy could be integrated, especially when we are thinking of developing landlocked and underdeveloped northeast region of India. We certainly need to take a leaf out of China’s experience as to how it has developed and connected its south-western and southern states to ASEAN. Is New Delhi ready to forgo its sensitivities in Northeast in turn of economic development of the region? Needless to say, the Chinese arms supply to the insurgents need to be tackled sternly and China need to do much more in this front. Can the massive trade between China-ASEAN and India-ASEAN percolate to the northeast India and northwest China? The answer to all these questions is yes provided we start looking at boundaries as gateways but not barriers.

However, as regards the 21^st Century Maritime Silk Route (MSR) India has been tight lipped so far, neither has it declined the Chinese proposal, nor has it shown eagerness to join the bandwagon. Notwithstanding its silence, India has been responding by its own strategy. It has been expanding and strengthening its maritime partnerships with the United States, Japan, Vietnam, Australia etc. countries on one hand and engaging ASEAN in various domains on the other. Besides there are new initiative such as ‘Project Mausam’ initiated by the Ministry of Culture in tandem with Archaeological Society of India (ASI), New Delhi as the nodal agency and Indira Gandhi National Centre for the Arts (IGNCA), New Delhi as its Research Unit. Since area covered under the project extends from East Africa, the Arabian Peninsula, the Indian subcontinent and Sri Lanka to the Southeast Asia, and has been termed as Indian Ocean “world”, analysts and media has termed it India’s response to China’s MSR. Knowing that it is a pure cultural construct many in China has termed it as a "threatening and competing" initiative which will pose a major challenge for China's belt and road plans.”

Even if we may have soaring ambitions, the kind of economic muscle which is required to materialise such projects simply does not exist. However, the official Chinese policy is keen to rope in India and says that the “Belt and Road initiatives can also be linked with India’s ‘Spice Route’ and ‘Mausam’ projects, thus forming a new starting point and a new bright spot in China-India cooperation.” The noises about turning Indian Ocean into a Zone of Peace is perhaps irrelevant as we may not find may voices supporting the idea.

What should be India’s options? China has considered India as an important country and crucial for economic integration in the region. Initiatives such as ‘Make in India’ and ‘Act East’ policies have been seen in alignment with the Chinese initiative. China  is already a partner in India’s development; there is cooperation in railway sector as regards enhancing the speed and heavy haul of the trains, China is also assisting India in the training of railway personnel, design of the stations and in building up a railway university in India. The feasibility study of Delhi-Chennai high speed railway has been going on and will bring down the travel time to 7 hours from present 28. India is also the founder member of BRICS Bank and AIIB linked to the Belt and Road initiative by China.  

It would be unfortunate if India remains outside the value chain of such an initiative; however, it may decide for itself what kind of project it could carry out with China on case to case basis. These could be in realm of a variety of infrastructure related projects including energy, transport, power, e-commerce, and projects integrating investment and trade. China will also perhaps frame its own responses and priorities towards countries along the Belt and Road. For example it will have differentiated strategy while dealing with smaller and medium size countries, with conflicting parties in South China Sea, ‘pivot’ countries like Pakistan and big and large countries like India.   Secondly, as India faces uncertainties as well as opportunities, it must capitalise on the invaluable geopolitical strategic space it has in the Indo-Pacific. If the US is attempting to offset China’s geopolitical pull by way of India confronting China or in tandem with the US and its allies in the seas and land it would be disastrous for all the stakeholders. From an Indian point of view, if the US is looking for a strong economic partnership with India, so is the case of India’s economic engagement with China and the US alike. It would be naïve to say that the US will dump its interests in China for India. Imagine the $521 billion trade volume between China and the US and compare it with our trade with China and the US combine! Therefore,  if at all India would like to be a so called ‘swing power’ between China and the US, we need to be a swing power as far as cooperation and healthy competition and India’s national interests are concerned not the confrontation and conflict, which is neither in India’s interest nor in the interest of China and the US.  Finally, since the maritime ambitions of both India and China are soaring, the interests are overlapping too. There is an urgent need for initiating more comprehensive mechanisms, one in the offing could be a substantive maritime security dialogue which has remained a non starter since 2012.