India as a Challenge to China’s BRI

Author: Gurpreet S Khurana*

Date:  30 April 2019

The  Belt  and  Road  Initiative  (BRI)  was  announced  by  President  Xi  Jinping  in  2013, comprising both the land-based Silk Road Economic Belt (launched in August 2013) and the 21st  Century  Maritime  Silk  Road  (introduced  in  September  2013).  The  initiative  was showcased in a manner that was too appealing to be ignored by the countries of the Indian Ocean region. Many Indians also viewed BRI as highly promising for their country.

As a virtual “island state” constrained by landward geophysical barriers in the north, India  is  in  dire  need  of  developing  its  economic  corridors  and  maritime  transportation infrastructure. Projections indicate that by 2050, India will be the second-largest economy (in   purchasing   power   parity   terms),   premised   inter   alia   on   the   growth   trends   of merchandise trade.1  However, leading Indian economists point out that a large part of the country’s  export  potential  remains  unrealized,  mostly  in  its  own  neighborhood.  The  key reason   for   this   loss   of   competitiveness   is   rising   “trade   costs,”   mainly   for   maritime transportation,  which  are  heightened  by  the  lack  of  connectivity  and  port  infrastructure.2 Therefore, even though the Indian government never endorsed BRI, a few Indian analysts (including this author) were of the view that the Chinese initiative was pregnant with geo- economic opportunities for India, and, premised on the ongoing India-China rivalry, it may not  be  prudent  for  New  Delhi  to  throw  the  baby  out  with  the  bathwater.3   Eventually, however, the official Indian position against BRI hardened to the extent that India was the only  key  country  in  the  IOR  and  among  the  major  powers   not  represented  at  the  major international Belt and Road Forum organized in Beijing in May 2017.4

This essay aims to examine some mainstream Indian perspectives on BRI and analyze the likely adverse ramifications of BRI on India. Based on these findings, the essay considers how India should (and is likely to) tailor its foreign policy and national security responses to this Chinese initiative.

Mainstream Indian Perspectives on BRI

 Owing largely to its geographic location and disposition, India’s national interests are closely intertwined with developments in the Indian Ocean region. In the regional context, BRI is seen in New Delhi as China’s endeavor to capitalize on the desires, vulnerabilities, and insecurities of regional countries.

Sri  Lanka,  for  instance,  sought  BRI  to  bolster  investment  in  its  port-led  economic development after the 2009 end to decades of internal conflict, but later became beset by debt. In December 2017, Sri Lanka was compelled to grant China a 99-year lease and 70% stake  in  the  deep-water  port  at  Hambantota.5   In  Maldives,  China  played  on  the  political fissures  and  local  fears  of  sea-level  rise  to  involve  Chinese  companies  in  reclamation projects.   Today,   the   country   owes   China   $1.5   billion—about   30%   of   its   GDP—in construction  costs.6    In  Malaysia,  China’s  exorbitantly  expensive  Melaka  Gateway  port project  was  premised  on  Kuala  Lumpur’s  geo-economic  rivalry  with  Singapore  to  host  a major hub port in the Asia-Pacific.7  Pakistan, for its part, was much too willing to cede to China  the  transit  corridor  from  Kashi  to  Gwadar  in  order  to  reduce  its  own  strategic vulnerability  vis-à-vis  militarily  superior  India  and  develop  the  Baluchistan  Province. Pakistan  owes  China  at  least  $10  billion  in  debt  for  the  construction  of  Gwadar  port  and other projects.8  Viewed  in New Delhi, China’s approach runs counter to India’s vision for collective  and  inclusive  economic  development  of  the  Indian  Ocean  region.  India  believes that cannot attain prosperity for its citizens in isolation of its regional neighbourhood.

BRI is also viewed in New Delhi as China’s attempt to outsource its low-end “sunset” industries  to  its  initiative  partners,  letting  them  worry  about  the  attendant  issues  of environmental  pollution.  To  redress  this  issue,  in  June  2017,  in  its  document  “Vision  for Maritime  Cooperation  under  the  Belt  and  Road  Initiative,”  China  attempted  to  link  BRI with blue economy and sustainable development concepts.9  However, repackaging does not change the product. Pakistan’s coal-based power plant project in Rahim Yar Khan, proposed to  be  built  by  China  as  part  of  the  China-Pakistan  Economic  Corridor  (CPEC),  is  a noteworthy  case  in  point.  The  project  was  eventually  shelved  in  January  2019  at  the insistence  of  the  new  Pakistani  government.10  This  reinforces  the  Indian  view  that  China looks at the Indian Ocean countries primarily as a source of natural resources, an ancillary for   its   expanding   industrial   complex,   and   an   export   destination   for   its   high-end manufactured   goods.   In   the   worst   case,   BRI   represents   a   new   avatar   of   economic colonization by China.

Rationale for India’s Rejection of BRI

 The objections to BRI that India has formally articulated include the fact that the proposed CPEC involves joint projects in Pakistan-occupied Kashmir (which is claimed by India), the lack of details regarding BRI projects, and the initiative’s unilateral character that is devoid of a consultative process. This lack of transparency bears the potential for smaller countries to be sucked into a crushing debt cycle, in addition to the potential for ecological destruction and  the  disruption  of  local  communities.11   That  BRI  overlooks  India’s  “core  concerns  on sovereignty and territorial integrity” is often stated as the key reason for India’s rejection of BRI.12  However, none of  these articulations—individually or collectively—fully account  for India’s wariness of BRI.

The most critical factor is China’s “Middle Kingdom” approach that is premised on its ancient notion of cultural superiority and seeks to subject the transactions among nation- states to a geopolitical hierarchy. Through such an approach, China  seeks to dominate its periphery  through  a  tributary  system,  thereby  potentially  challenging  India’s  traditional influence in the Indian Ocean region. As Yin Gang stated, “In China’s view, India must be reminded  that  areas  around  Gwadar,  Chittagong,  Hambantota,  and  Sittwe  are  not  within India’s traditional sphere of influence.”13  India views the Chinese approach as undermining the  regional  balance  of  power  and  therefore  challenging  its  geopolitical  and  national security interests. India does not want to become marginalized by a rival power in its own neighborhood.

It is thus important to understand the adverse security implications of BRI for India. For  instance,  the  China-Pakistan  strategic  partnership  already   limits  India’s  strategic options  to  respond  to  Pakistan’s  prevailing  strategy  of  supporting  cross-border  terrorism against  India.14   China’s  technological  assistance  to  Pakistan  to  help  it  develop  sea-based tactical nuclear weapons to offset India’s conventional military superiority against Pakistan exemplifies this.15

The   traditional   Chinese   military   threat   to   India’s   national   security   is   another important  consideration.  The  disputed  land  border  in  the  Himalayas  has  often  led  to military confrontations, with the most recent occurring in June 2017 on the Doklam Plateau and lasting for 73 days.16  The People’s Liberation Army Navy’s established presence in the Indian  Ocean  region  could  add  a  seaward  dimension  to  the  existential  continental  threat posed  by  China.  India’s  naval  power  might  no  longer  enjoy  a  favorable  asymmetry  in  the region, and therefore India’s conventional military deterrence against China to respond to a conflict across the disputed land border would be eroded substantially. For instance, given

the  naval  superiority  that  India  enjoys  in  the  Indian  Ocean  today  and  thus  its  ability  to interdict Chinese strategic shipments, China may think twice before resorting to a military escalation across the land border. However, for ensuring security of its BRI investments, as the  PLA  Navy  acquires  the  ability  for  sea-control  in  the  Indian  Ocean  against  opposing naval forces, India will lose the military leverage in terms of its current option for horizontal escalation  of  an  India-China  armed  conflict  to  the  sea.  Even  worse,  India  might  need  to prepare  for  the  possibility  of  a  two-front  war  scenario  involving  China-Pakistan  strategic collusion.17

India’s Response to BRI

 From the foregoing discussion, it is clear that India’s response to BRI is likely to be premised on the assumption that BRI’s comprehensive success, in terms of China meeting its envisaged objectives, is not in India’s interest. India’s approach will be to seek support of its strategic partners within and beyond the Indo-Pacific. However, even without any such support, New Delhi would likely need to do whatever may be required not to prevent India’s influence in the Indian Ocean region from being displaced by China and to prohibit its prevailing maritime military edge over China in the region from being blunted by China’s increasing naval footprint. It would likely adopt necessary geopolitical countermeasures across the entire spectrum ranging from geo-economics to military strategy.

At the foreign-policy level, India may seek to ramp up its relevance and influence in the  Indian  Ocean  region,  and  even  beyond  into  the  eastern  parts  of  the  Indo-Pacific,  as enunciated in Prime Minster Narendra Modi’s 2015 vision of SAGAR (Security and Growth for All in the Region) in 2015.18  The vision stands for the dictum that “all boats rise with the rising tide” and, therefore, provides an optimized approach to encourage regional solidarity and contrasts positively with the “extractive” model proposed by BRI. However, the dictum that holds for China also holds for India: the package is not the product. Policymakers in New Delhi will need to flesh out SAGAR in terms of its functional strategy – which has not yet  been  done  –  and  pursue  its  implementation.  For  instance,  India  and  its  partners  will need to offer the regional countries alternative models for enhancing economic connectivity in  the  Indo-Pacific  that  are  more  attractive  than  BRI.  The  Asia-Africa  Growth  Corridor proposed by India and Japan was conceptualized with such an aim under the rubric of the contemporary  Indo-Pacific  concept,  but  it  needs  to  be  pursued  more  seriously  by  all potential partners.19  The AAGC is still at a nascent phase, though with enormous potential to challenge the BRI. The author’s discussion with the officials  – who prefer anonymity  – indicates that the Japanese are disappointed with the slow pace of AAGC’s implementation on  part  of  the  Indians.  This  is  leading  to  Tokyo  reconsidering  India’s  partnership  in  the

AAGC.   Such   reappraisal   contradicts   the   very   rationale   of   the   Indo-Pacific   concept articulated  by  the  Japanese  Prime  Minister  Shinzo  Abe  in  the  Indian  Parliament  August 2007, which sought India’s partnership for security of its maritime interests and Sea Lines of  Communication  in  the  Indian  Ocean.20    While  India  itself  lacks  infrastructure,  and financial and technological capacities, and therefore, looks upon Japan for these to fructify the  AAGC,  the  Indian  government  needs  to  do  more  to  quell  the perception  that  it  is  not serious about the AAGC.

As  an  instrument  of  the  nation’s  foreign  policy,  the  Indian  Navy  bears  a  major responsibility  to  shape  a  geopolitical  environment  in  the  Indian  Ocean  region  that  is favorable to India. The recent reorientation of its operational philosophy to mission-based (forward)   deployments   is   meant,   inter   alia,   to   address   the   changing   operational environment brought about by BRI. This includes the need to keep watch on the maritime chokepoints  that  all  vessels—commercial,  warships,  and  submarines—must  traverse  for entry  into  the  Indian  Ocean.  The  intelligence  collected  by  the  naval  deployments  is  fed into the Indian Maritime  Operations  Centre  and shared with friendly  countries through the Information Management and Analysis Centre.21

While India has been making concerted efforts to enhance the sustained reach of its naval forces through basing arrangements with regional countries such as Mauritius and Seychelles, the prevailing geopolitical environment and local sensitivities will continue to be major impediments. The sustenance of forward-deployed naval units will, therefore, need to be enhanced through alternative measures that combine sea-based logistics with the existing logistics exchange agreements with major resident powers including the United States and France.

The  Indian  Navy  will  also  need  to  be  well-prepared  to  discharge  its  role  as  a mechanism for insurance in a possible conflict scenario involving China. The navy will need to  be  capable  of  this  both  independently  and  in  conjunction  with  India’s  major  partners, such  as  members  of  the  Quadrilateral  Security  Dialogue  and  from  Europe,  but  without necessarily according undue visibility to the process. Such plans already exist—both for the Indian Ocean and the western Pacific—and capacity accretions are adding more options to the  latter  operational  area.  Indian  government  approval  in  2015  to  build  six  indigenous nuclear attack submarines capable of distant power projection is notable in this regard.22  It is  also  high  time  for  the  Indian  Navy  to  revisit  its  rules  of  engagement  in  its  maritime zones.23    Its   current   rules,   for   instance,   do   not   cater   for   the   contingencies   involving intelligence-gathering  by  Chinese  warships  –  particularly  submarines  –  in  the  maritime

zones  of  India.  Notwithstanding  these  new  developments,  the  navy  needs  to  shape  the environment so as to avoid a conflict scenario.24

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*The author, Captain (Dr) Gurpreet S Khurana, Indian Navy, is PhD in Defence Studies and the Executive Director of the National Maritime Foundation (NMF), New Delhi. The views expressed are his own and do not reflect the official policy or position of the NMF, the Indian Navy, or the Government of India. He may be contacted at gurpreet.bulbul@gmail.com This issue-brief was first published in Asia Policy, Volume 14,

Number 2 (April 2019), pp. 27-33, available at

https://www.nbr.org/wp-content/uploads/pdfs/publications/asiapolicy14- 2_where_the_belt_meets_the_road_rt_apr2019.pdf

 Notes and References

1  “The Long View: How Will the Global Economic Order Change by 2050?” PricewaterhouseCoopers, February

2017, https://www.pwc.com/gx/en/world-2050/assets/pwc-world-in-2050-summary-report-feb-2017.pdf.

2   This  is  based  on  an  analysis  by  Dr  Prabir  De,  a  professor  at  the  Research  and  Information  System  for Developing  Countries  (RIS),  New  Delhi,  presented  at  the  ASEAN  India  Connectivity  Summit  (AICS)  on  the theme: Powering Digital and Physical Linkages for Asia in the 21st Century, held on 11-12 December 2017 at New Delhi.

See Gurpreet S. Khurana, “Multilateral Structures in the Indian Ocean: Review and Way Ahead,” Maritime Affairs 14, no. 1 (2018): 11–23.

3  Gurpreet S. Khurana, “India’s Approach to China’s Maritime Silk Road: An Alternative View,” National Maritime Foundation, February 17, 2015, http://www.maritimeindia.org/CommentryView.aspx?NMFCID=8390.

4  “It’s Official Now, India to Stay Away from China’s ‘Belt and Road Forum,’” Wire, May 14, 2017, https://thewire.in/diplomacy/india-china-obor-belt-summit. See also “Official Spokesperson’s Response to a Query on Participation of India in OBOR/BRI Forum,” Ministry of External Affairs (India), Press Release, May 13, 2017. 7

5  Kiran Stacey, “China Signs 99-Year Lease on Sri Lanka’s Hambantota Port,” Financial Times, December 11, 2017, https://www.ft.com/content/e150ef0c-de37-11e7-a8a4-0a1e63a52f9c; and Dipanjan Roy Chaudhury, “New Chinese Loan May Further Plunge Sri Lanka into Debt Trap,” Times of India, Economic Times web log, September 3, 2018, https://economictimes.indiatimes.com/news/international/world-news/new-chinese- loan-may-further-plunge-sri-lanka-into-debt-trap/articleshow/65659719.cms.

6  Sanjeev Miglani and Mohamed Junayd, “After Building Spree, Just How Much Does the Maldives Owe China?” Reuters, November 27, 2018, https://www.reuters.com/article/us-maldives-politics-china/after- building-spree-just-how-much-does-the-maldives-owe-china-idUSKCN1NS1J2.

7  Anjelina Patrick, “Melaka Gateway Port: An Analysis,” National Maritime Foundation, October 11, 2017, http://www.maritimeindia.org/View%20Profile/636432951858173081.pdf. See also, “‘We Cannot Afford This’: Malaysia Pushes Back on China’s Big Projects,” Business Times, August 21, 2018, https://www.businesstimes.com.sg/government-economy/%E2%80%98we-cannot-afford-this%E2%80%99- malaysia-pushes-back-on-china%E2%80%99s-big-projects.

8  “Pakistan Owes USD 10 Billion Debt to China for Gwadar Port, Other Projects: Top U.S. General,” Times of India, Economic Times web log, March 15, 2018, https://economictimes.indiatimes.com/news/international/business/pakistan-owes-usd-10-billion-debt-to- china-for-gwadar-port-other-projects-top-us-general/articleshow/68432415.cms.

9  “Full Text: Vision for Maritime Cooperation under the Belt and Road Initiative,” Xinhua, June 20, 2017,

http://www.xinhuanet.com//english/2017-06/20/c_136380414.htm.

10  “Pakistan Finally Shelves Coal-Power Project under CPEC,” Daily Pakistan, January 14, 2019, https://en.dailypakistan.com.pk/headline/pakistan-finally-shelves-coal-power-project-under-cpec.

11  Suhasini Haidar, “Why Did India Boycott China’s Road Summit?” Hindu, May 20, 2017, https://www.thehindu.com/news/national/why-did-india-boycott-chinas-road-summit/article18516163.ece.

12  “Official Spokesperson’s Response to a Query on Media Reports Regarding Possible Cooperation with China on OBOR/BRI,” Ministry of External Affairs (India), Press Release, April 5, 2018.

13  Yin Gang, televised interview, New Horizon, Yunnan TV, November 16, 2014, cited in You Ji, “China’s

Emerging Indo-Pacific Naval Strategy,” Asia Policy, no. 22 (2016): 18

14  “‘Pakistan Wants to Bleed India with Thousand Cuts,’ Says Army Chief General Bipin Rawat,” Outlook, September 24, 2018, https://www.outlookindia.com/website/story/pakistan-wants-to-bleed-india-with- thousand-cuts-says-army-chief-general-bipin-rawat/317041.

15  C. Uday Bhaskar, “The Indian Ocean Waters Will Get Roiled by Babur 3,” Times of India, Economic Times web log, January 11, 2017, https://economictimes.indiatimes.com/blogs/et-commentary/the-indian-ocean- waters-will-get-roiled-by-babur-3.

16  Debanish Achom, “Doklam Belongs to China, India Should Have ‘Learnt Lessons,’ Says Beijing,” NDTV, March 27, 2018, https://www.ndtv.com/india-news/doklam-belongs-to-china-india-should-have-learnt- lessons-says-beijing-1828803.

17  Rajat Pandit, “Two-Front War Is a Real Scenario, Says General Bipin Rawat,” Times of India, Economic Times web blog, July 13, 2018, https://economictimes.indiatimes.com/news/defence/two-front-war-is-a-real- scenario-says-general-bipin-rawat/articleshow/56324336.cms?from=mdr.

18  Articulated as an acronym, SAGAR means “ocean” in Hindi and thus signifies the emerging focus of the Indian political establishment on maritime matters and re-establishing their link with India’s destiny. See “Mr. Modi’s Ocean View,” Hindu, March 17, 2015, https://www.thehindu.com/opinion/editorial/mr-modis- ocean-view/article7000182.ece.

19  Jagannath Panda, “The Asia-Africa Growth Corridor: An India-Japan Arch in the Making?” Institute for Security and Development Policy, Focus Asia, no. 21 (August 2017); and Gurpreet S. Khurana, “What Is the Indo-Pacific: The New Geopolitics of the Asia-Centred Rim Land,” in Geopolitics by Other Means: The Indo- Pacific Reality, ed. Axel Berkofsky and Sergio Miracola (Milan: Istituto per gli Studi di Politica Internazionale, 2019), 13–32.

20  Confluence of the Two Seas”, Speech by H.E. Mr. Shinzo Abe, Prime Minister of Japan at the Parliament of

the Republic of India, August 22, 2007, Japan Ministry of Foreign Affairs (MOFA) website,

at http://www.mofa.go.jp/region/asia-paci/pmv0708/speech-2.html The speech was preceded by discussions between Indian and Japanese think-tanks in 2006,  involving the author and leading to his paper which carries the first mention of ‘indo-Pacific’ in the contemporary context. See, Gurpreet S Khurana, “Security of Sea Lines: Prospects for India–Japan Cooperation”, Strategic Analysis, Vol. 31(1), January/ February 2007 Issue, pp.139 and 144, at https://www.tandfonline.com/doi/abs/10.1080/09700160701355485

21  Sujan Dutta, “Indian Navy Informs Government about the Fleet’s Reoriented Mission Pattern,” New Indian Express, April 1, 2018, http://www.newindianexpress.com/nation/2018/apr/01/indian-navy-informs- government-about-the-fleets-reoriented-mission-pattern-1795404.html.

22  “India to Build 6 Nuclear-Powered Submarines— Navy Chief,” Sputnik, December 4, 2015, https://sputniknews.com/military/201512041031242059-india-submarine-nuclear-fleet; and “India Kickstarts Process to Build 6 Nuclear-Powered Attack Submarines,” Times of India, Economic Times web log, July 14, 2018, https://economictimes.indiatimes.com/news/defence/india-kickstarts-process-to-build-6- nuclear-powered-attack-submarines/articleshow/61880118.cms?from=mdr.

23  Rules of engagement are based on international law and political directives and are meant to authorize and guide operational commanders with regard to the freedom to initiate or continue combat and the extent of use of military force in a specified scenario. See Gurpreet S. Khurana, Porthole: Geopolitical, Strategic and Maritime Terms and Concepts (New Delhi: Pentagon Press, 2016), 169.

24  In this direction, serious efforts are underway by the National Maritime Foundation in New Delhi to develop a mechanism of maritime confidence-building, including, in particular, formulating proposals for a bilateral mechanism for de-conflicting unintended naval encounters at sea and efforts to institute such a mechanism at a multilateral level under the aegis of the Indian Ocean Naval Symposium among the