India and the China-Pakistan Economic Corridor Project (CPEC): What are the implications?

The Chinese designed One Belt- One Road (OBOR) project will surely be a mega changer for the economic and political future of the entire Eurasian region. OBOR aims to connect the Chinese mainland with Europe and Asia through a network of roads, rail and sea routes. An important part of the OBOR is the South Asia bound land route connecting Kazhgar in Xinjiang (Chinese autonomous region) with the Pakistan’s Persian Gulf port of Gwadar. The Kazhgar- Gwadar connectivity is bilaterally implemented as a part of the China Pakistan Economic Corridor Project (CEPC).

The 3000 km long route comprising of rail and road networks and development of the Gwadar port by the Chinese has a project cost of $46 bn. Of the US $46bn, between $35bn to $38bn were allocated for the energy sector, the rest for constructing rail and road networks. Despite the secrecy and confusion surrounding the project hope about the project is sky high in Pakistan.

Following are the implications of the project for the two participants – China and Pakistan and the neighboring India.

What China gets from the Project?

On the economic front, China is the biggest beneficiary as the project gives it a shortcut to Indian Ocean, bypassing the Strait of Malacca. It can access the Western part of the Indian Ocean in the most politically easiest way because of its friendly and strategic relationship with Pakistan.

At present, China transports 80% of its oil through the strait of Malacca. This can be deviated through the Pak route.

On the political front, a decisive advantage for China is that Pakistan historically shows willingness to play the role of satellite state to major powers including the US.

Because of the India factor, Pakistan will remain an ally of China even by surrendering several rights to Chinese economic and strategic interests. This means that among all the OROB associate country, Pakistan offers more strategic value to China.

There is a future option for Beijing to retain a significant army in Pakistan in the pretext of providing security to the CPEC.

What the project means for Pakistan?

The project is described as a ‘game changer’ for Pakistan’s economic future, which otherwise has only meagre prospects to develop its economy. Pakistan’s economy can get a rejuvenation due to Chinese investment. If Pakistan is able to overcome its security problems, the CPEC can be a game changer. At the same time, the benefit it can get from being a transit country for Chinese goods depends upon its ability to change itself by achieve industrial progress.

The word game changer is to be carefully read along with the past great game played between US, Pakistan and Saudi Arabia on the one side and Russia, Iran and India on the other side to establish a land route to Central Asia. Pakistan’s effort to be the entry point into Central Asia foiled because the opposite side tried hard to retain their control over Afghanistan. Now, with Chinese help, Pakistan can get a chance to become at least one of the transit points.

Pakistan can get an opportunity to develop its infrastructure – especially energy. Bulk of the CPEC is aimed to develop Pakistan’s energy sector including the construction of the largest solar energy plant in the world. China will help Pakistan to develop its resource based industries so that they can be exported to China.

Another advantage of the project is that with the potential economic decline of the Gulf States, Pakistan as a natural resource exporter can sell its commodities to the lucrative Chinese markets through the CPEC transit route.

What the project means for India?

India is the third party on which the CPEC impacts a lot of intangible and indirect effects. Given the political synergy between China and Pakistan, the CPEC will be a disguised political disturbance for India. Its strategic content is high and capable of restricting New Delhi’s maneuverability in the region. In an extreme scenario, Pakistan may act as a ‘rented house’ for Chinese Military.

The project goes through the disputed Pak occupied Kashmir (Gilgit- Baltistan) is a nuisance for India.

Already, CPEC is getting lot of attention because of the direct involvement of the Pakistani military at the insistence of the Chinese leadership.

So far, the quick progress in Gwadar Kazhgar project has compelled an otherwise slow New Delhi to get an agreement with Iran to construct a port at Chabahar. In future also, the India-Iran alliance for a geographic connectivity with Central Asia partnering Afghanistan will continue; but without hurting both Beijing and Islamabad.

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