India has a large part to play in the development and rollout of Belt and Road in South Asia. As the only other country in the world with over a billion people, and an economic growth rate larger than China it has the ability to pose a real challenge to the spread of influence in the region, in a way unlike powers in the Middle East or the former Soviet Union.
It’s often speculated that China and India will be the next two big superpowers of the world, and for China, Belt and Road is a vehicle of that status. And what of India? How is India reacting to these moves? What are the wider implications of these policies on the Indian Subcontinent?
India is seeing its zone of influence contested by the Chinese. In neighbouring states, China has offer of infrastructure and finance have been warmly received, and as a result, influence is swaying away from India. The recent 2017 Nepalese election resulted in the Communist alliance coming to power, replacing the Indian backed Nepalese Congress. The Communist alliance have sympathies in China and it is a strong indicator of growing leverage of China in Nepalese affairs.
We should expect more Chinese friendly governments coming to power in regions where Belt and Road is going because of the opportunities it is affording to them.
Bangladesh for example is looking to get China to finance its deep-water port at Payra to increase its port capacity and to connect it to a wider world trade web. Again, in differing circumstances to Russia, Bangladesh is seeing an economic growth rate of upwards of 7% as its economy matures. Thus, Bangladesh too is looking to build a stronger relation with China and political parties are potentially going to align with a more pro-China outlook, because of the agreement of their goals.
Belt and Road, for many rapidly developing countries is an attractive way to gain investment. China, for all its investment, gets new places to sell its products, and becomes less reliant on the West. And for India, she is experiencing a rapid shift of its neighbours economic ties towards China, it is stoking reaction.
But by far and away the biggest problem for India is Pakistan.
Pakistan is already receiving funds from Belt and Road, which goes through the Pakistani owned, but Indian claimed Kashmir province. This is often sighted as a reason why India is not ‘getting with the Belt and Road programme’
Why would China allow this? If this is a driving factor in India’s reluctance, then surely it is better to divert Belt and Road around such a controversial area, despite having to go round an existing and convenient border. Furthermore, the region is prone to insurgency and war as recently as 1999, something which has been flagged by multiple organisations.
Perhaps it is possible that China doesn’t want India to engage with the project, as the rival among the billions club, and a rising economic power? In a way, Pakistan and China both want to limit the power of India, and by establishing an economic aspect of there already fruitful diplomatic ties, both states strengthen their position in the region.
For China as a new power, and for Pakistan, more able to contend with its existential rival India.
What is India’s reaction to this encroachment and encirclement by passive Chinese influence? This is yet to be seen. India is emerging from a period of stagnation due to some monetary reform, but its growth rate seems to be strengthening again, boasting a 7.2% growth rate in the last quarter of 2017, larger than China.
There has been some suggestions of an infrastructure project between the US, Australia, India and Japan that aims to compete with Belt and Road, although policy makers do not think its far enough advanced to even be announced yet. India will inevitably act to extend its own influence, but not within Belt and Road.
And so, in the Indian subcontinent, Belt and Road is backing India into isolation and time will tell how it will react. For China, the subcontinent is a rare opportunity to integrate a growing consumer and exporting market onto the web that Belt and Road is trying to form. But for both, it is creating a new playground for geo-politics to play out, and policy is very much fresh on the issue, but by no means unimportant.