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The China Pakistan Economic Corridor and India

Priyanka Singh is Associate Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • May 07, 2015

    The hype surrounding the China Pakistan Economic Corridor (CPEC), to be built through Gilgit Baltistan, resurfaced with the recent visit of Chinese President Xi Jinping to Pakistan. The visit yet again generated an animated discourse in the global media about the corridor’s future. The long-gestated CPEC project received initial traction during Nawaz Sharif’s visits to China in the year 2014. Subsequently, on his maiden visit to Pakistan in April 2015, the Chinese President reaffirmed the previously announced commitment, worth $46 billion, towards the CPEC. The CPEC is considered a significant project that seeks to cement Sino-Pakistan bilateral ties and further consolidate their strategic ties. The corridor will run through India’s periphery, more significantly, Gilgit Baltistan, claimed by India as part of the erstwhile princely state of Jammu and Kashmir (J&K). In due course, this geographical reality of the CPEC could potentially impinge upon India’s geopolitical calculations and pose a strategic challenge.

    China’s approach, India’s response

    In December 2014, the Chinese state-run Xinhua published a statement announcing the closure of the strategic Khunjerab Pass and in the process referred to Gilgit Baltistan as part of Pakistan.1 Until then, China had maintained that J&K was a bilateral problem/dispute between India and Pakistan. Whether terming Gilgit Baltistan as part of Pakistan reflected a possible shift in the Chinese position on the J&K— a change from its previously held neutral position – was debated in the Indian media for a while. A section believes that by taking up a long term project such as the CPEC, the arteries of which will originate in Gilgit Baltistan, China has yet again tacitly approved Pakistan’s claim and control over this region. There was no reaction from the Indian official sources to the Xinhua statement. In the past, a similar statement was withdrawn after India registered a protest to the Chinese news agency.

    Responding to a query in the Lok Sabha in December 2014, Minister for External Affairs Sushma Swaraj noted:
    “Government has seen reports with regard to China and Pakistan being involved in infrastructure building activities in Pakistan Occupied Kashmir (POK), including construction of China-Pakistan Economic Corridor. Government has conveyed its concerns to China about their activities in Pakistan Occupied Kashmir, and asked them to cease such activities.”2

    But somewhat contravening the above is a recent statement by India’s High Commissioner to Pakistan, who noted:

    “India has no worry over the construction of Pakistan-China Economic Corridor as an economically strong Pakistan would bring stability in the region.”3

    India is yet to comprehensively articulate its approach towards the CPEC despite the fact that the corridor bodes strategic implications for India. As stated, the corridor will pass through the Gilgit Baltistan region where China has invested in the past in infrastructure and hydropower projects. In the Gilgit Baltistan segment, the CPEC project design includes a major expansion of the Karakoram Highway, establishing industrial parks in special economic zones, constructing hydropower projects, railway line and road building. The project also entails building hydropower projects and motorways/highways in the so-called Azad Jammu and Kashmir (AJK). India has occasionally raised objections to Chinese infrastructure investment in the region.

    The origin of the CPEC could be traced to the Border Agreement of 1963, considered a milestone in China-Pakistan relations. The agreement ceded the 5000 plus square mile Trans Karakorum Tract to China and served as a precursor to the Karakoram Highway, conceived later as a strategic link defining China and Pakistan’s ‘all-weather friendship’. The then Defence Minister of India, Krishna Menon, elaborately enunciated India’s position on the issue at the UN, condemning the agreement as illegitimate. Besides, India lodged an “emphatic protest” to China and conveyed its concerns in a letter of protest.4 Decades down the line, while India’s policy orientation and broader claim on Gilgit Baltistan remains unchanged, its stance on Chinese investments in the Karakoram Highway, and Chinese efforts to leverage this territorial link to build a strategic corridor, is perceived to be weakening over time.

    India’s Dilemma

    Is it because of a realization that in a changed strategic landscape, the options for India vis-a-vis a project like CPEC are limited and complicated? Is India conflicted about whether to engage itself in the mega connectivity network project or stay out of it in accordance with its stated positon on Gilgit Baltistan and the so-called AJK? Participating in the project would require a major alteration in India’s policy. Overlooking the territorial dimension could be interpreted as a massive climb-down from its stated position. It may even be construed as acquiescing to the China-Pakistan alliance in the region and beyond. Thus, the CPEC poses a policy challenge to India on how best to strike a precarious balance between securing its strategic/territorial interests without at the same time being confrontational.

    Be that as it may, India would need to take a clear positon on the CPEC sooner or later. Domestically, there has been, till now, no serious political or public debate on how India should approach the issue. In the absence of a rational public discourse, India is yet to articulate a clear stand or position on the CPEC. This is also owing to the fact that public debates in India on issues concerning China and Pakistan are often emotive and devoid of a rational evaluation of policy options. Charting a policy course is essential since China has, of late, through stray remarks extended an invitation for India to participate in the Silk Route ‘one route one belt’ project. The onus now lies on India to respond to such overtures. India has to take a call on whether it would like to be a party to the CPEC, sit on the fence, or convey its concerns more emphatically in a bid to discourage China.

    CPEC may materialize despite scepticism

    Ironically, in Pakistan itself, there is growing cynicism about the CPEC’s prospects and feasibility because of security-related concerns and inter-provincial political discord on route preferences. Nevertheless, given the Chinese determination to find a route to oil-rich West Asia through Pakistan, and the Pakistani desperation to provide every possible assurance to China about safeguarding its investments, the project is likely to be implemented, even if its scope may be limited. The Chinese decision to strike deals worth US$ 22 billion out of a total of $28 billion with private players rather than the Pakistan government has been touted as an indication of Chinese seriousness in investing in Pakistan. One has to remember that China and Pakistan have weathered geographical and logistical extremes in the past to build the highest metalled road on one of the toughest terrain, i.e. the Karakoram Highway. Moreover, the Pakistani decision to raise a special security division to protect Chinese workers and interests in Pakistan, consisting of 10,000 security personnel, including 5,000 from the elite special services group (SSG) of the Pakistan Army who are specially trained for counter-terrorism and security, indicates its resolve to implement the project in all earnestness.

    While India’s overall stance on PoK remains understated, the commencement of the CPEC warrants more serious attention than what has been accorded so far. There is a need to carefully weigh the situation and devise a suitable and sustainable approach that could serve India’s long-term interests. It is imperative that some of the explicit strategic concerns regarding the CPEC figure in the bilateral round of talks during the Indian Prime Minister’s forthcoming visit to China.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India