CPEC IMPACTS ON INDIA

THE CHINA PAKISTAN ECONOMIC CORRIDOR & CPEC IMPACTS ON INDIA

The China-Pakistan Economic Corridor (CPEC) is a strategic partnership between both the nations for mutual benefits. The CPEC impacts on India (The Third Party of CPEC) are politically significant but not economically. China became the world’s largest trader in terms of exports and imports. CPEC will build an alternate way for China to reach out in Africa, Middle East, and Europe and reduce the dependency on South China Sea and Strait of Malacca. Eventually, CPEC is an international highway of China to the Indian Ocean. At the same time, to combat with the jaded growth, Pakistan opens the door for China to build class infrastructure throughout the Pakistan. The rapid development of infrastructure especially in the energy sector will eventually boost the economy of Pakistan and in exchange of that China will get a shorter route to reach their trading partners.

cpec impacts on india
Mutual benefits of CPEC to China and Pakistan

CHINA PAKISTAN ECONOMIC CORRIDOR MAP

Chinese are building a maritime presence on Gwadar port of Pakistan. The core aim of CPEC is to connect the China with Middle East, Africa and European countries. The reach of China now stretches out to the Arabian Sea. The CPEC connects Kashgar in Xinjiang Province in the north-western region of China with Gwadar port of Pakistan on Arabian sea via road, railway and pipelines. The project is going over the Pakistan occupied disputed territory of Kashmir (Gilgit-Baltistan).

As a part of roadways projects, CPEC has identified three corridors for cargo transportation.

  1. cpec impacts on India
    CPEC passing through disputed region of Kashmir

    The Karakoram Highway along with Chinese section which is of 1300 kilometer which connects the Haripur of Pakistan with Kashgar of China. It will further link with the Gwadar port via railway and western alignment of road projects.

  2. The Eastern Alignment consists of M5 motorway and M9 six-lane highway, which located in Sindh and Punjab region of Pakistan. It will connect Karachi and Lahore two largest cities of Pakistan with an express highway.
  3. The Western Alignment connects the Gwadar to rest of the Pakistan via Hoshab region which is of 1150 kilometers. The larger part of the Western Alignment projects is taken place alone by Balochistan.

There are certain railway projects which included in CPEC. The reconstruction of Karachi-Peshawar railway line will strengthen the railway network within the Pakistan. It includes major cities of Pakistan. It will reduce traveling time by 70%. Kotri-Attock railway line will connect the Gwadar with other regions. There is another project proposed to connect the Afghanistan. The Khunjerab railway proposed under the long-term CPEC projects which will direct connects the Chinese railway to Pakistan railway lines.

China is going to set up 711 kilometers of liquid natural gas pipeline from Gwadar to Nawabshah. It will connect the gas pipeline of Iran-Pakistan. It will be very convenient for China to import the natural gas from direct Iran to China.

CPEC BENEFITS TO PAKISTAN

The China-Pakistan economic corridor implications provide immense benefits to Pakistan in many ways especially economically. It will undoubtedly prove a game changer for Pakistan.

  • Jobs are the foundation to drive growth for any economy while CPEC will create a 7,00,000 new jobs for Pakistanis at the end of 2030.
  • China is going to invest $54 billion in Pakistan to improve infrastructure. The multiplier effect of such a whopping amount of cash inflow will transform the Pakistan economy
  • Pakistan is facing an acute energy shortage. About $34 billion of funds are allocated to power project, and 10,400 MW of electricity will produce by the end of the next year.
  • The major portion of the corridor passing through the underdeveloped region of Pakistan. The people of these regions are struggling with the core infrastructure while CPEC will provide the same to these people.
  • The CPEC will enhance the inter-connectivity of the states of Pakistan via class highway and high-speed railway lines.
  • Pakistan government has proposed 29 special economic zones under the CPEC to promote export-oriented businesses within the Pakistan. In a case of requirement, China also pays attention to shift their businesses to Pakistan. Industrial zones will further boost the economy.
  • The CPEC is not only limited to China and Pakistan, but it will offer the neighboring countries to utilize infrastructure for exports and imports trade. Many countries including Russia showing a keen interest in CPEC.
  • Pakistan deliberately supports China through CPEC. Because of brittle relationship with India, if any crisis arises on a border, Pakistan will get a military support from China at very ease.

CPEC BENEFITS TO CHINA

cpec impacts on India
Strait of Malacca

The CPEC is a lucrative deal for Pakistan and  China both. There are plenty of advantages accrue for the China in the core of the CPEC. China completely depends on the Strait of Malacca and South China sea for its trade mainly import of Oil. Many countries like Malaysia, Indonesia, Vietnam, Taiwan, and Brunei are claiming their stake ion the South China Sea. At the time of emergency, if any of these countries blocks Chinese cargo in South China sea then China may have to face adverse impact of the same. So China agreed to build provisional highway via Pakistan to Middle East countries.

  • The Coastal areas of China are well developed while western provinces did not get many benefits of flourishing growth yet. The CPEC deal will certainly boost the economy of western provinces.
  • In order to reduce the dependency on the sea of Malacca and South China, China agreed for Corridor with Pakistan. This is a shorter route to import the oil and natural gas from the middle east.
  • The CPEC grants the access to China on Gwadar Port for 43 years. So fruits of CPEC would remain sweet for a long for China. It will save a billions buck of China.
  • The Chinese have consistently been demonstrating themselves as a next generation super power. CPEC is not only an economic arrangement, but it will doubtlessly increase the presence of China on the Arabian sea. It will eventually create the pressure for India.
  • The relationship between India and US is gradually evolving while both the nations are the major competitor of China regarding trade and military. China deploys its naval ships on Gwadar in the name of protection of Port.

CPEC IMPACTS ON INDIA

India could not find any adverse CPEC impacts on India. China has been promoting it’s highly ambitious ‘One Belt, One Road’ initiative to connect many Asian countries to boost trade and economic ties. Because of the vital role of Pakistan in this initiatives, India is reluctant to join such projects.

The reconstruction of Karakoram highway which is a part of the corridor is passing through the Pakistan occupied Kashmir (Gilgit-Baltistan). India is never hostile regarding CPEC except this because it is an annoyance for India. India has raised obligations for the same.

Pakistan has surrender several rights to China regarding the Gwadar port, so the access of Gwadar Port by Chinese encircle the India and it would put pressures from Arabian sea. In the case of any crisis with India, China can quickly mobilize defense support to Pakistan.

India is going to strengthen the relationship with Afghanistan and Iran. Through CPEC, China wants to connect Beijing with Iran and Afghanistan. So India is not in a good state of presence with the CPEC deals.

cpec impacts on india
The PM Narendra Modi (left), The President of Iran, Mr. Hassan Rouhani (middle) and The President of Afghanistan, Dr. Mohammad Ashraf Ghani (right), during the Trilateral meeting, in Iran on 23rd May 2016.

Why should India not join CPEC?

China invites India to Join CPEC, but India could not find any substantial reason to join CPEC. The trade between India and China is going through Sea routes which more convenient for both the nations. Sea routes are more secure and cheap than the routes of CPEC. As far as concern of trade between India and Pakistan, it is going on without major serious issues expects tense environment on a border. At last, India will never put trust on Pakistan regarding anything. To bypassing the Pakistan, India had announced the deal with Iran to build the Chabahar Port in Iran. It will provide land access to Afghanistan to reach central Asia. Chabahar port will prove a rival of Gwadar port.

From the trade point of view, the multi-billion dollars China-Pakistan Economic Corridor projects depicted a new form of globalization on the world economy. It is not only a consequence of trade relations between two countries. It is deeper than that. At present China is a manufacturing hub and it has an ability to drive the world. Fall of US economy in last decade encourage China to demonstrates their strength as a next superpower of the World.

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