BRI will change rules of engagement, fears India

In the new order, India finds itself in a losing bargain

india-china Representative image

Is the China Pakistan Economic Corridor (CPEC) the only reason why India is opposed to China's Belt and Road Initiative (BRI)? The CPEC passes through Pakistan Occupied Kashmir, which India has seen as a violation to its sovereignty. 

The CPEC, however, is only one reason for India to be wary of the BRI. The bigger issue is that China is rewriting the rules of engagement, and in this new order, India finds itself in a losing bargain. As one official put it, India has spent the last 70 years of its existence matching up with international standards for trade and development projects. Now, just when it had aced the game, and was ready to compete for contracts for international projects, China had changed the rules of the game. 

China, a no-stickler for rules set by other countries, offers terms in other countries which India simply cannot match upto. “We are not concerned with the sovereign debt of those countries. Our concern is that in countries where there are weak rules (regarding environment standards, obeying international codes of conduct), we will not be able to bid for projects,'' said the official. This is why India is continuously flagging that the BRI should observe a rules-based approach. 

Of course, India is also wary that beneath the veneer of economic development, there are strategic interests, too, in these Chinese projects. Whether it is the Gwadar port development, which can be of dual use, or the laying of fiber optic cables, Chinese intent is rather obvious. 

The BRI will be a big factor to negotiate in 2019, with China planning the second BRI summit in the spring. 

It will remain a big challenge in continuing with the reinvigorated relationship the two countries developed over 2018, a year in which India and China upped their engagements with each other to an unprecedented level. Apart from the Wuhan summit, Narendra Modia and Xi Jingping met three times on the sidelines of multilateral meetings. This apart, both external affairs minister Sushma Swaraj and defence minister Nirmala Sitharaman visited China, while three senior ministers, who are state councillors—China's ministers for foreign affairs, defence and home— visited India. 

The two countries also resumes defence contacts, which had got suspended last year following the Doklam standoff. Hand to hand, a defene exercise that the two countries have, was held this year, as were defence dialogues and high level military exchanges. And while the border issues may not have been resolved, at least the mechanism to address them—flag meetings and joint secretary level meetings—went smoothly. 

Another vexing issue will be the balance of trade. China has indicated that it will create space for Indian services and products in its market. India is hopeful for exporting basmati and non-basmati varieties of rice, even soya bean and rape seed oil. All these will depend on the quotas that China finally allots for Indian products. Apart from agricultural produce, India is keen to export pharmaceutical products, too.