India may have reasons for not participating in China’s One Belt One Road project, but if it wants to promote its regional heft, it must get the internal fundamentals right
More than two millennia ago, in his ingenious political treatise called the Arthashastra, Kautilya detailed the notion of Raja-mandala or the ‘Circle of states’. An approach to foreign policy that still holds relevance, it classified kingdoms among four different categories. A kingdom that wished to expand its empire was called Vijigishu. The state neighboring Vijigishu, and most likely its enemy, was called Ari. Adjoining the territory of these two states and stronger than both of them was called Madhyama while the neutral kingdom lying outside the immediate region, yet holding a strong influence on all three, was called the Udasina. The theory was based on the premise that in order for Vijigishu to expand its kingdom, it needed to partner with its neighbour’s neighbour.
The circle of states finds much resonance in the current geo-political relationships between India, China, Pakistan and other entities such as the US, Japan, the EU and Russia. These relationships (the four categories being interchangeable depending upon which country is Vijigishu) are bound to become starker in the context of China’s Belt and Road Initiative. India (Vijigishu), finds itself trapped in the circle of states — Pakistan (Ari) and China (Madhyama) as it raises concerns about the credibility of China’s ambitious One Belt One Road (OBOR) project, especially in the context of the China Pakistan Economic Corridor (CPEC).
Interestingly, in the same treatise, Kautilya also elucidated the key principles a state could employ when trapped within this circle of states. India’s strategy towards the CPEC and OBOR when viewed from the Chanakya lens, is actually quite sound — but it can definitely be improved. Where does India’s argument against the validity of CPEC standIJ
Many in the Indian establishment view the OBOR as a unilateral national initiative by China — itsraison d’être being geo-political hegemony rather than Asian economic development. The China Pakistan Economic Corridor, a part of the OBOR, runs from Xinjiang in western China to the Gwadar port in Balochistan via Gilgit-Baltistan and other parts of Pakistan-occupied Kashmir. The Government of India’s argument can perhaps be best represented by the recent statement from Union Minister Arun Jaitley: “I have no hesitation in saying we have some serious reservations about it, because of sovereignty issues.” The remarks reveal almost a hint of confidence.
The CPEC comprises multiple projects which are financed partly by the China-led multilateral financial institution, the Asian Infrastructure Investment Bank (AIIB) and partly by other entities. In the affairs of the bank, India holds a voting share of 8.0294 per cent, second only to China’s 27.845 per cent. India also holds a seat among the vice presidents of the AIIB. Additionally, the report on the Articles of Agreement of the AIIB clearly states, “A policy on operations in disputed areas would provide that, for financing in a disputed area, member consent is obtained in accordance with paragraph 3, and the Bank does not take a position on territorial claims.” This is echoed in section IV of the bank’s Operational Policy on International Relations.
The particular CPEC project in contention here is the Thakot-Havelian section of the Karakoram Highway connecting China and Pakistan. The official website of CPEC mentions the project’s funding as “possibly through GCl”. Even though the particular project in question is not being directly funded by the AIIB, it is part of the larger One Belt One Road corridor in question which receives funds from the lending agency. India’s potential argument against the OBOR would be that it includes projects that pass through a disputed area, and if the AIIB were to fund projects in OBOR, which includes those passing through a disputed territory, it would imply the bank taking a ‘position on territorial claims’ and hence against the bank’s official stand.
Though quite strong, it is likely that India’s clout in AIIB may not be sufficient to stop the CPEC from taking shape. Taking a cue from Kautilya, India must continue to extend its influence in the ‘circle of states’ and build trading ports and routes that foster India’s geo-political sovereignty. India’s $500 million investment in the Chabahar port of Iran, approximately 75km away from the Gwadar port, has seen repeated delays.
India’s decision to not participate in the Belt and Road Initiative Summit, being hosted in Beijing, has been read as a sign of its disapproval with the OBOR. In the coming of the ‘Asian Economic Order’, as many pundits like to call the times ahead, India must be a part of the larger shaping exercises and not allow petulance to drive its policy.
Before New Delhi can counter China with trade and energy corridors of its own, it needs to build the necessary supporting infrastructure internally. Chanakya niti dictates that before a ruler can take on a neighboring state, it must augment itself by exploiting its own resources. If one looks at the projects proposed by India to the AIIB, they reflect a similar stand. By the same premise, in order for the Bangladesh, China, India and Myanmar (BCIM) Economic Corridor to bear fruit, India must first build the necessary complementing infrastructure in its eastern and northeastern regions.
Chinese Ambassador lui Zhaohui has been courting India to join the OBOR, and he recently came up with a four-point agenda for India. What is missing is a similar sharing of agenda from the Indian side. Though India is justified in proceeding cautiously, it needs to come up with an alternative.
One possible way forward for India to play a greater role in the Chinese initiative is to first ask the Xi Jinping Government to drop the CPEC projects in Pakistan-occupied Kashmir from OBOR and re-route them as a separate China-Pakistan initiative. Alternatively, India could also ask China to walk the talk and allow India to expand trade with Tibet. China has repeatedly claimed that the One Belt One Road Initiative is aimed strictly to promote economic growth in Asia and not establish the Chinese hegemony. If that were the case, India and China could work out an arrangement to expand border trade through the Nathu la pass into ‘trade across the border’ in the form of an established Kolkata-Siliguri-Gangtok-lhasa corridor. As the situation stands today, India has repeatedly requested permission for opening an official trade office in the Tibetan capital of lhasa but, as expected, it has been repeatedly denied the same.
India’s response strategy must also include stepping up its foreign diplomacy and engaging with its neighbours to highlight the kind of debt trap some of the projects in OBOR could pose. The Governor of Pakistan’s own national bank has expressed doubts on Pakistan’s ability to pay back the debt to China. In Sri lanka, Chinese investments are showing poor returns and the Sri lankan Government has fallen into a debt trap with China already. It is not surprising that Sri lanka’s debt-to-GDP ratio is approximately 75 per cent and almost 95 per cent of its Government’s revenue is slated to be used for repaying debts. Here, another Chanakya lesson is in order: “There is some self-interest behind every friendship. There is no friendship without self-interest. This is the bitter truth.”
Before we throw the towel, India must tread carefully and devise ways to respond to Chinese proposals without alienating itself from the grand initiative.
(The writer is a Yenching Scholar at Peking University, China, and is presently working as a policy and strategy consultant)