Competing Powers Collide – India and the BRI

India is witnessing a historical retransformation over its regional primacy in South Asia. Sustained Chinese investment across Eurasia has roped countries to all sides of India into China’s economic and, consequently, political orbit. The Belt and Road Initiative (BRI), serving as both a strategic branding initiative and purveyor of Chinese influence, initially emerged in late 2013. It illustrated a markedly ambitious vision, integrating various economic routes originating from China through dozens of countries and several continents.

Contrastingly, India risks becoming a second-tier economic partner within its immediate neighborhood as it could be geopolitically drowned out by a resurgent China. With heightened emphasis on bilateral commitments to investment, cultivation of regional security ties, and dedication to forward strategic thinking, India can counterbalance the BRI, however imperfectly.

The most prominent component of the BRI is the land-based belt, which unites the Middle East, Europe, and East Asia along common avenues. Cultural and political capitals can be found across the sprawling branches of the belt, including Moscow, Tehran, Islamabad, and Rotterdam. Provisions may travel via any direction, bringing to China an assortment of foreign goods. China has augmented trade by land with a robust maritime network. The network stretches from Singapore to Italy – the globe spanning distance being a clear indication of China’s enduring commitment for reaching distant markets. China has even begun developing a Polar Silk Road framework to streamline trade amid the melting Arctic. This latest installment of the BRI employs trade across the North-west Passage and the Northern Sea Route, running along Canada and Russia respectively. Beyond trading, the Polar Silk Road also offers China the prospects for extracting natural resources and promoting tourism.

China’s BRI is made complete with robust financial backing procured by Chinese supranational organizations, namely the Asian Infrastructure Investment Bank (AIIB). The AIIB sprung into existence in late 2014 to equip the continent, under a China-centric domain, with the financial tools to recreate the Eurasian landmass. Countries across the world, from India to Canada, jumped at the prospect of membership, which confers allocated shares of the bank’s capital to members based on the size of their economies and geographic location, among other factors. Today, the AIIB boasts 97 fully-fledged members worldwide.

Combined with international buy-in, the sheer scale of the BRI is astronomical. China has pledged investment totaling $1 trillion over the BRI’s lifetime, with its scheduled conclusion arriving in 2049. While its magnitude is seemingly unfathomable, analysis compiled by Morgan Stanley suggests Chinese BRI spending could surpass $1.2 trillion by the year 2027, implying that the final dollar amount could be far in excess of initial figures.

Presently, China has expended just $200 billion toward the BRI – though a far claim from the finally tally – already dwarfs the Marshall Plan’s contemporary dollar amount today, approximated at $130 billion. Put succinctly, China’s grandiose BRI is an endeavor of unparalleled proportion throughout human history, and it is just emerging. As India rises, it must contend with the BRI’s metastasizing influence in its own backyard.

Altogether, the BRI is comprehensive across several domains as China has diligently expanded its signature project far and wide. India, however, is the recipient of nearly no connectivity with the BRI writ large. Save for a single stop in Kolkata along the Maritime Silk Road, the entire country is excluded. The China-Pakistan Economic Corridor does pass through disputed Kashmir, but only to continue through the belly of Pakistan en route to the Gwadar Port.

This seclusion is caused and reinforced by India’s instinctual rejection to joining the BRI. Prime Minister Modi has refused to dignify BRI summits with his presence, instead opting to issue public condemnation delivered through government statements. In these remarks, specific attention is paid to the perceptual economic coercion applied by China upon smaller BRI partners. Projects financed by sizable loans and high interest rates have neutralized some countries financial capacity to recompense. Sri Lanka, a comparatively minute country to China, capitulated at the hands of Chinese investment, surrendering a strategic port for 99 years.

Further, India has objected to the BRI out of concern for its sovereignty. As a principal Chinese ambition, funded by Chinese money and ideology, India would necessarily play second fiddle in South Asia and within its own borders. Befitting a country of intense skepticism with China, India prefers not playing an inferior fiddle at all. In truth, India has contrived neither a regional economic plan of its own, let alone a holistic approach to countering the BRI. This is particularly worrisome for India because it stands increasingly isolated amid Chinese-supported investment.

Recent developments suggest an evolving narrative is emerging as India aspires to insert itself into the regional order. In partnership with Japan, India has launched the Asia-Africa Growth Corridor (AAGC), seeking to enhance trade, interconnectivity, and prosperity across continents. Giving priority to Africa-centric issues, such as development, health care, and infrastructure, the AAGC serves as a counterweight, albeit much lighter, to the BRI.

The AAGC has generated a steady stream of loans with low interest rates and sensible principal amounts to targeted areas of need in Africa. Directly competing against the BRI would be a losing strategy; thus, the India-Japan partnership has offered up its business for the purpose of diversification, serving as a complementary option. While the AAGC is financially dwarfed by the BRI, India and Japan have demonstrated devotion for creating inroads, both physical and metaphoric, into the geopolitical arena alongside China.  

The duo has also staged investment in Sri Lanka’s Colombo Port. In purposeful contrast to previous Chinese debt-trap diplomacy in the country, Sri Lanka obtained majority stake in the Terminal Operations Company, an organization created to implement the deal. Additionally, the island country’s Ports Authority retains full, unmitigated ownership. By portraying itself as the Chinese mercantilist foil, India is building both goodwill and tangible economic influence.

After securing reelection, PM Modi invited many South Asian leaders to his second inaugural ceremony as proof of his commitment to engaging with the region. PM Modi moved quickly beyond optics and into realpolitik by visiting the Maldives last week. There, Prime Ministers Modi and Wickremesinghe initiated a counterterrorism working group and extended bilateral security ties in the Indian Ocean. India’s “neighborhood first” policy, despite slow progression under Modi’s first term, is gaining momentum. Maintaining this trajectory is imperative for India because it functions as an added dimension for hedging against the BRI.

India has achieved relative improvement vis-á-via the Belt and Road Initiative, but the latter’s overarching scope and unabashed ambition requires a complete, multidimensional, and lasting approach from India. When discussing the BRI, China does not speak in contained language – it speaks as if everything is unbounded opportunity. India’s vision must be stated in comparable terms. Everything – diplomatic, economic, and military power – is fair game in the strategic struggle which is enveloping Asia. To remain competitive, India must unambiguously adopt the mindset of a tactician, with the world to gain and nothing to lose. For India to truly compete with China’s Belt and Road Initiative, it must first think big – then think bigger.