India's recent growth strategies have been around: international partnerships, stable and condusive periphery multipolar Asia, an end to cross border terrorism and a sufficient role in global governance. But, each of these of these objectives relates in some way to India's relations with China. One Belt, One Road (OBOR) is one such example. India skipped the OBOR meeting due to its sovereignty concern over its $50 billion China-Pakistan Economic Corridor (CPEC) project. India's major concern is that the project passed through Pakistan-occupied Kashmir (PoK).
The Belt and Road Initiative
- It is a development strategy proposed by Xi Jinping.
- Focus on connectivity and cooperation between countries primarily between China and the rest of Eurasia consisting of land based 'Silk Road Economic Belt' and ocean going 'Maritime Silk Road'.
- It is geographically structured along six corridors and the maritime Silk Road.
Highlights of the Summit
- The summit commenced on 14th May, showcased its plans to build a network of trade routes under One Belt, One Road initiative.
- As of now, 68 countries and international organisations have signed belt and road agreement with China.
- China has made a point that the Belt and Road initiative is an open and inclusive platfom to explore and co-develop the China-led blueprint of reviving the Silk Road.
- India chose to boycott the summit. Six of India's neighbours: Pakistan, Sri Lanka, Nepal, Bangladesh, Myanmar and Afghanistan attended the summit and signed 20 infrastructure deals with China.
Outcomes of the Summit
- The two day OBOR summit identified and agreed on 270 deliverable goals of Belt and Road initiative.
- The signatories of the joint communique also pledged their support for promoting a rules-based, open and multilateral trading system with the World Trade Organisation at its core.
- The Forum concluded with only promises of joint action by participating countries and did not result in establishment of an institutional framework for implementing a planned construction program.
- The 30 head of states promised to implement plans for cooperation in trade and infrastructure program across Asia, Europe and Africa.
- China has assured that it will not attempt to push its country's political ideologies and systems onto other countries.
India's Objections
- Main three concerns related to sovereignty, procedures and leadership.
- The China-Pakistan Economic Corridor (CPEC) passes through PoK and this is a strong objection for India as it violates India's territorial integrity.
The Positives for India
- India has snubbed organisers of China's OBOR for trying to encircle us with ports surveillance posts and naval bases. This is known as the string of pearls. China engages in hostile activity and India is safeguarding its interests by not aligning with OBOR.
- Challenging Beijing on OBOR and its continued support to China-Pak economic corridor passing through PoK is in line with India safeguarding its sovereignty.
- With ISIS migrating to Pakistan and Balochistan on fire, foreign investors, barring China, are wary of committing large funds to Pakistan.
- The project is not very transparent. It connects all countries to China, but no countries to each other beyond a certain point.
The Negatives for India
- Economic growth will expand as a result for those countries which align with OBOR.
- India needs far more investment to create more jobs so that young working class individuals have the ability to be gainfully employed
- Boycotting OBOR has also ensured that India's industrial production does not get the fillip it needs to encourage savings, improve connectivity and enhance the rudiments of the welfare state.
- India will lose out on the infrastructure boost that would have come from joining OBOR.
- Manufacturing capacity with other countries as a result of OBOR will improve their communication, foster P2P exchanges, G2G contacts, enhanced investment and greater trade and technology
Does it really affect India so much?
- Around $800 million of Chinese FDI came to India in just 17 months after April 2014, more than double of all Chinese FDI to India.
- This is of a similar scale to estimates of Chinese FDI to CPEC in Pakistan and simply indicative of the immense factor push of excess Chinese capital.
- If the capital is invested in India that meets the stated criteria, it would be mutually beneficial.
- In fact, drawing lines upon a map in a unilateral fashion, not just in India, but across Asia and Indian Ocean region, is a far more sinister matter.
Conclusion
- The Project would succeed only if it is pursued in a more transparent, status-quo oriented, market driven and responsible manner.
- It must reflect environmental considerations, be based on transparent assessment of costs and involve the transfer of skill and techonology to ensure long term maintenence by local communities.
