Can India afford to ignore OBOR

Can India afford to ignore OBOR

Subir Bhaumik,

India’s decision to not join the One Belt One Road (OBOR) or Belt and Road Initiative (BRI) Summit in Beijing (May 14-16) is not just about the sovereignty issues, as has been made out by Delhi. It is not just about the China-Pakistan Economic Corridor entering through a part of Kashmir in Pakistan’s control but one that India claims as its own. Asone Indian commentator rightly said, the decision to skip the OBOR summit is a strategic call with the mega connectivity initiative as it is unfolding in its current form in various parts of South Asia but specifically the China Pakistan Economic Corridor (CPEC). It stems from India’s current strategic mindset that harps on China encircling India by a ‘string of pearls’ — ports in Myanmar, Sri Lanka and Pakistan. India’s former deputy naval chief P K Chatterjee told a recent seminar in Calcutta that China was not trying to encircle India but it needed these land-to-sea access to sustain its massive economy because it had a limited eastern coast. Chaterjee said these land to sea access is crucial to China through these countries and it is paranoia about any threat to these routes. That is a sensible way of understanding Chinese intentions and what might provoke it.

OBOR in its current form encompasses all of South Asia sans India and Bhutan and enhances China’s strategic heft in the same countries where India also has huge stakes including connectivity initiatives and infrastructure projects launched during past three years. Indian officials contend that Beijing did not take Delhi in confidence when it unilaterally decided to introduce and implement projects in many of the South Asian countries. Such projects in their current form not only have the potential to push the countries into financial crisis having direct bearing on India but also have strategic implications for Delhi during times of conflict. But does India take Beijing into confidence when it takes a position on oil exploration with Vietnam in South China sea! China will surely look primarily at promotion of Chinese interests when it pushes for OBOR — to expect anything different will be naive. But it is for other countries, especially neighbours to examine how it stood to gain from these initiatives.

India is implementing several connectivity initiatives both through bilateral format as well as sub-regional groups — BBIN and BIMSTEC — across the region. These initiatives complement connectivity projects in Southeast Asia under the Modi government’s Act East Policy. Simultaneously Chabahar Port and International North South Transportation Corridor are expected to enhance India’s footprints in Russia, Central Asia, Iran, Afghanistan and Europe.

So, India’s opposition is not limited to the CPEC – it is upset with the scale of OBOR and specially the way it is unfolding in South Asia. MEA spokesperson Gopal Baglay said recently that India is of firm belief that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality.

But China has argued with some justification that it organized the OBOR summit precisely to take all nations impacted by the mega connectivity initiative into confidence and to give them a chance to put forward their views on the issue.  Chinese consul in Calcutta Ma Jhanwu argued during a press conference that OBOR was to create win-win for all nations through which it would pass – and it was not about Cold War style geo-political maneuvering.

So, India might have made it clear in no uncertain terms that it is unhappy with the OBOR/BRI by skipping the BRI Forum. But it missed an opportunity to put it objections upfront before all those assembled by skipping the Summit. India cannot ignore the project and its diplomats and economists needs to study it in greater detail if it wants to confront China with facts. After all the Chinese will continue with OBOR and not stop because India objects. India’s leading Sinologist Jabin Jacob told me during a recent chat that OBOR is a great opportunity to see how some of China’s internal mechanisms - political, economic and military -  will stand up to stress tests abroad. “Sure, the projects might not have much economic rationale but they certainly are a great learning opportunity for China in multiple ways - ‘no pain, no gain’ as they say, on the way to being a superpower. We in India should also not close ourselves to the learning opportunities that are coming up.”

I would go with Jacob that there is much to learn from China and the way it goes about OBOR for India which has similar initiatives, albeit on a smaller scale, unfolding as part of its new diplomatic outreach.

Meanwhile, where OBOR projects will succeed, India should figure out how it can gain from them – and not just  in economic terms. In short, Delhi will make a huge mistake if it closes its door on OBOR and just goes ahead with its own initiatives. The ‘success’ for the Chinese might also mean getting equities in return for loans outstanding or unpaid – and that might cause heartburns among these countries by raising the spectre of Chinese colonization. India also needs independent lines of  communication with OBOR countries, including Pakistan. Delhi will do well to get out of the boycott mode – it just cannot say we will not deal with countries who went with China on OBOR. That will be suicidal. The US and Japan learnt the hard way on the Asian Infrastructure Investment Bank (AIIB) that such an approach would not work – even their closest allies joined up AIIB. So both US and Japan decided to go for the OBOR summit and India’s decision to stay away makes it look somewhat isolated. Trump needs China to handle North Korea- his reluctances to play the globocop has pushed Japan to explore ways to normalise relations with China. India has been hit hard by Trump on H1B visas that is adversely impacting India’s IT industry. Trump’s push for UN and US mediation on Kashmir has upset Delhi — on the contrary, China’s push for India and Pakistan to settle its disputes bilaterally and offering Chinese mediation only if both side found it agreeable, seems mild.

India and China will have to find a way out of the tangle but the onus for the moment is on the Chinese. They know it and they are making much of an effort to get India into the OBOR/BRI process. In the longer run, India will have to ponder whether it can afford to lose Chinese investments crucial for generating jobs and for the government’s flagship ‘Make in India’ and ‘Skill India’ campaigns. I agree with Jabin Jacob when he observes that the Chinese are better placed than any other country with scale, experience and monies to help India make a success of these flagship campaigns crucial to the country’s future economic growth.

But this would involve not just some sort of agreement on OBOR but also a whole raft of legal and other technical agreements between the two countries to make it possible. So, India would need to take up China’s offer of an ‘early harvest’ on the border dispute – seriously consider whether we can begin to ink agreements sector-by-sector. At the end of the day, India needs Chinese investments and the Chinese need Indian markets – that is a cold reality.

Subir Bhaumik is a former BBC Correspondent and author.