• May 11, 2023

Afghanistan Extension of CPEC

GS 2 Agreements Involving India &/or Affecting India’s Interests

In Context

• China and Pakistan agreed at a recent meeting in Islamabad to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan.
• The decision was made despite India’s opposition regarding sovereignty and territorial integrity.

China-Pakistan Economic Corridor (CPEC) :

About

• The CPEC is a collection of infrastructure projects that began construction in Pakistan in 2013;
• The initiative is expected to be completed by 2049.
• The China-Pakistan Economic Corridor (CPEC) is a component of China’s Belt and Road Initiative, which seeks to spread Chinese investments in trade and connectivity infrastructure to bring Central Asian and European markets closer together.

Details

• The CPEC is a 3,000 km route of infrastructure projects that aims to establish a succession of interconnected economic and trade hubs with road and rail infrastructure.
• It will connect the restive Xinjiang Uyghur Autonomous Region in western China to the new Gwadar port in Pakistan’s equally restive Balochistan state.

Funding

•  Initially estimated at $47 billion, the value of CPEC initiatives has increased to $62 billion by 2020.

Mutual Benefit for China and Pakistan:

For China

• For China, the project will circumvent the Strait of Malacca, a potential choke point in a conflict with the United States or other adversaries.
• On the other hand, Pakistan expects CPEC to be a lifeline for its deteriorating economy, resulting in a multiplier effect on production and employment generation as well as sustainable economic growth.
• The move is expected to pave the way for billions of dollars to be invested in infrastructure projects in the sanctioned and economically troubled nation.

Challenges for the Project

• The initiative is behind schedule, and only three of the fifteen announced projects have been completed to date.

China’s debt trap policy

• Critics also anticipate that Pakistan’s weak economic indicators could lead to the country defaulting on its debt obligations due to the high interest rates on Chinese loans.
• China has expressed concern to Pakistan regarding the safety and security of Chinese nationals working on CPEC initiatives.
• Beijing is concerned about the number of incidents targeting Chinese citizens in Pakistan.

India’s Concerns:

Violation of Indian Sovereignty:

• The project violates India’s sovereignty because it passes through Pakistan-occupied Kashmir (PoK), a disputed territory between India and Pakistan.
• According to well-established international conventions, no construction is permitted in disputed territories without the consent of the other country.

Exploitation of Natural Resources

• Under CPEC, China intends to construct the Bunji Dam and Bhasha Dam on the Indus River.This will significantly stress the Indus Water Basin.

Security Concerns for India:

 Increase in China’s Activities in IOR

• With Gwadar’s inclusion in CPEC, India suspects an increase in PLA Navy operations in the Indian Ocean Region (IOR).

Danger to Indian Trade and Connectivity

• The majority of India’s tangible imports pass through the Strait of Hormuz.
• In the event of a conflict, China could easily obstruct its access to the Middle East, jeopardizing India’s energy security.

 Enhanced threat from Pakistan

• With the reconstruction of the Karakoram Highway, Pakistan will have an advantage in mobilizing troops and heavy military equipment to PoK.
• At the same time, an increase in financial returns to Pakistan through CPEC may increase its capacity to fund military infrastructure and state-sponsored terrorism in Kashmir, thereby destabilizing the region.

Suggestions for India:

• Experts have recommended that India maintain communication and cordial relations with its neighbors.
• India has done well to continue to participate in forums such as the Shanghai Cooperation Organization in order to maintain communication with both Pakistan and China.
• International Collaboration: o It is well-established that India cannot compete with China in financing development initiatives such as CPEC in other developing nations.
• Therefore, it must collaborate with organizations such as the Japan International Cooperation Agency (JICA) to provide soft loans in order to prevent these nations from falling into the Chinese debt quagmire.

Maintaining Security

• Developing nations, particularly Southeast Asian nations, have placed their hopes in India to counter China’s regional hegemony.
• Here, India must rely on alliances such as Quad to maintain the power balance in the Indo-Pacific.

Way ahead

• While India’s position remains unchanged, China and Pakistan are eager to invite third parties into the CPEC, demonstrating China’s insensitivity to India’s concerns.
• Connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency, and equality, and must be pursued in a manner that respects sovereignty and territorial integrity.